Document:

Exhibit 10.17

 

CREDIT LINE DEED OF TRUST NOTE

 

	
  U.S. 
  $4,500,000.00

  	
   

  	
  Richmond, Virginia

  
	
   

  	
   

  	
  May 29, 1998

  

 

1.             BORROWER’S PROMISE TO PAY.

 

FOR VALUE RECEIVED, Parker & Lancaster
Corporation, a Virginia corporation, (hereinafter, whether one or more, the
“Borrower”) hereby promises to pay to SouthTrust Bank, N.A., a National Banking
Association, or its order, (hereinafter referred to as the “Noteholder”), at
Attn: McCraken Loan Servicing, P.O. Box 830776, Birmingham, Alabama 35283-0776
such other address as the Noteholder shall specify to the Borrower in writing,
in lawful money of the United States of America, the principal sum of FOUR
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($4,500,000.00), or so much
thereof as shall have been advanced and/or re-advanced by Noteholder, pursuant
to the provisions of the Loan Commitment hereinafter defined between Borrower
and Noteholder including sums advanced contemporaneously herewith and in the
future, which may include re-advances of sums previously repaid under this
Note, together with interest on the unpaid principal balance in accordance with
the term and conditions set forth in this Note.  Provided, however, if not sooner paid the entire indebtedness
evidenced hereby shall be fully due and payable on October 31, 1998, (the
“Maturity Date”).

 

2.             INTEREST.

 

Borrower shall pay interest on all principal
outstanding under this Note in monthly installments at the annual rate of one
percent (1.0%) above the Base Rate. 
Base Rate shall mean the per annum rate of simple interest designated by
Noteholder periodically as its Base Rate. 
The Base Rate is not necessarily the lowest rate charged by
Noteholder.  While the outstanding
principal balance bears interest at a rate calculated using the Base Rate as a
reference, the rate of interest payable under this Note will change to reflect
ally change in the Base Rate, as and when the Base Rate changes.  Interest for each month shall be due and
payable on the tenth day of the next calendar month.

 

3.             BORROWER’S FAILURE TO PAY AS REQUIRED/DEFAULT.

 

(a)           If the Noteholder has not received the full
amount of any of Borrower’s monthly payments by the end of ten (10) calendar
days after the date it is due, Borrower will pay a late charge to the
Noteholder.  The amount of the charge
will be five percent (5%) of Borrower’s overdue payment of principal and
interest.  Borrower will pay the late
charge promptly but only once on any late payment.  Collection of the late charge shall not be deemed a waiver by the
Noteholder of any of its rights under this Note.  Interest payments shall be due and payable on the tenth day of
each month.  Principal shall be payable
on Maturity Date or as determined by the Lot Release provision of the Deed of
Trust (paragraph 31) of even Date herewith.

 

 

(b)           If any installment due under this Note is
not paid within ten (10) days following the mailing of notice by Noteholder to
Borrower of nonpayment thereof when due, or if Borrower fails to comply with
any term, covenant, condition or provision of (1) the Deed of Trust securing
this Note, or (2) any other Loan Document (hereinafter defined) within thirty
(30) days after the mailing of notice by Noteholder to Borrower of
noncompliance therewith then, in any of such events, the Noteholder may declare
this Note to be in default and the entire principal amount outstanding under
this Note, and all accrued interest thereon shall at once become due and
payable at the option of the Noteholder. 
The Noteholder may exercise the aforesaid option to accelerate during
any default by Borrower regardless of any prior forbearance.

 

(c)           In the event Borrower violates any term,
covenant or condition of this Note, the Deed of Trust (hereinafter defined), or
any other of the Loan Documents (hereinafter defined), whether or not Noteholder
declares, a default, then Borrower shall be liable to Noteholder for all of
Noteholder’s costs and expense occasioned by such event including, without
limitation, Noteholder’s reasonable attorney’s fees.  All of such costs and expenses shall be owed to Noteholder by
Borrower under this Note and shall be secured by the Deed of Trust securing
this Note.  In the event suit is brought
to collect this Note, Borrower shall pay Noteholder’s reasonable attorney’s
fees and costs in connection with such suit.

 

4.             GENERAL PAYMENT TERMS.

 

Interest shall be calculated using a 360-day
year and applied to actual days elapsed. Receipt of a check shall not
constitute final payment hereunder until such check is fully and finally
honored by the Bank upon which it is drawn, and any wire transfer of funds
shall not constitute payment until actually credited to such bank account of
the Noteholder as the Noteholder may from time to time designate.

 

5.             LOAN DOCUMENTS.

 

This Note, the Deed of Trust (hereinafter
defined), the Loan Commitment between Borrower and Noteholder dated April 22,
1998 (the “Loan Commitment”), the Loan Agreement between Borrower and
Noteholder of even date herewith, the Guaranty Agreement (hereinafter defined),
and all other documents evidencing and securing the indebtedness evidenced
hereby are sometimes herein referred to collectively as the Loan Documents.

 

6.             PREPAYMENT.

 

This Note may be prepaid in whole or in part
at any time by Borrower without penalty.

 

7.             SECURITY.

 

This Note is secured by a Deed of Trust of
even date herewith the (the “Deed of Trust”) granting a lien on certain real
and personal property owned by Borrower, located in Counties of Chesterfield,
Hanover and/or Henrico, Virginia and more particularly described in the Deed of
Trust, and this Note is guaranteed by a Guaranty Agreement (the “Guaranty
Agreement”) made by: J. Russell Parker, III and Barbara H. Parker (collectively
the Guarantors ).

 

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8.             WAIVER; EXTENSIONS.

 

(a)           Presentment, demand, notice of dishonor,
protest and the benefits of the homestead and all other exemptions provided the
Borrower are hereby waived.  To the
extent permitted by applicable law, the Borrower hereby further waives and
renounces for itself, its 1egal representatives, successors and assigns, all
rights to any moratorium, reinstatement, marshalling, forbearance, valuation,
stay, extension, redemption, appraisement, exemption and homestead now
provided, or which may hereafter be provided, by the laws of the Commonwealth
of Virginia or of the United Sates of America or of any other State thereof,
both as to itself and in and to all of its property, real and personal, against
the enforcement and collection of the indebtedness evidenced hereby.  The Borrower agrees that it shall remain
liable for the payment hereof notwithstanding any agreement for the extension
of the due date of any amount payable hereunder made by the Noteholder after
the maturity thereof.  The Noteholder
shall not be deemed to have waived any of the Noteholder’s rights or remedies
hereunder unless such waiver is express and in a writing signed by the
Noteholder, and no delay or omission by the Noteholder in exercising, or
failure by the Noteholder on any one or more occasions to exercise any of the
Noteholder’s rights hereunder or under the other Loan Documents, or at law or
in equity, including, without limitation, the Noteholder’s right, after any
default hereunder or event of default under any of the other Loan Documents, to
declare the entire indebtedness evidenced hereby immediately due and payable,
shall be construed as a novation of this Note or shall operate as a waiver or
prevent the subsequent exercise of any or all of such rights.  Acceptance by the Noteholder of any portion
or all of any sum payable hereunder whether before, on, or after the due date
of such payment, shall not be a waiver of the Noteholder’s right either to
require prompt payment when due of all other sums payable hereunder or to
exercise any of the Noteholder’s rights, powers and remedies hereunder or under
the other Loan Documents.  A waiver of
any right in writing on one occasion shall not be construed as a waiver of the
Noteholder’s right to insist thereafter upon strict compliance with the terms
hereof without previous notice of such intention being given to the Borrower,
and no exercise of any right by the Noteholder shall constitute or be deemed to
constitute an election of remedies by the Noteholder precluding the subsequent
exercise by the Noteholder of any or all of the rights, powers and remedies
available to it hereunder, under any of the other Loan Documents, or at law or
in equity.  The Borrower expressly
waives the benefit of any statute or rule of law or equity now provided, or
which may hereafter be provided, which would produce a result contrary to, or
in conflict with, the foregoing.  The
Borrower consents to any and all renewals and extensions in the time of payment
hereof without in any way affecting the liability of the Borrower or any person
liable or to become liable with respect to any indebtedness evidenced
hereby.  No extension of the time for
the payment of this Note or any installment due hereunder, made by agreement
with any person now or hereafter liable for the payment of this Note, shall
operate to release, discharge, modify, change or affect the original liability
of the undersigned under this Note, either in whole or in part, unless the
Noteholder agrees otherwise in writing.

 

(b)           The borrower agrees that in the event
Borrower or any Guarantor of this Note shall: (a) file with any bankruptcy
court of competent jurisdiction or be the subject of any petition under Title
11 of the U.S. Code, as amended (with such petition not being released within
forty-five [45] days); (b) be the subject of any order for relief issued under
Title 11 of the U.S. Code, as amended; (c) file or be the subject of any
petition (with such petition not being released within forty-five [45] days)
seeking any reorganization, arrangement, composition,

 

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readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency or other relief for debtors; (d) seek or consent to or acquiesce in
the appointment of any trustee, receiver, conservator, or liquidator; (e) be
the subject of any order, judgment or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state law
or law relating to bankruptcy, insolvency, or relief for debtors, the
Noteholder immediately shall be entitled to relief from any automatic stay imposed
by Section 362 of Title 11 of the U.S. Code, as amended, or otherwise, on or
against the exercise of the rights and remedies available to it under the Loan
Documents.

 

(c)           The Borrower consents to and agrees that the
appropriate venue for any action brought under this Note will be in the Circuit
Court of the City of Richmond, Virginia.

 

(d)           By executing this Note, the Borrower
irrevocably waives any right to trial by jury in any action, proceeding or
counterclaim arising out of or related to this Note or any of the Loan
Documents or the transactions contemplated herein or in the Loan Documents.

 

(e)           The Borrower represents and warrants that it
was represented by counsel of its choice, and it has reviewed this Note and has
advised each of them of its content and meaning and that it has reviewed the
waivers and provisions contained in this section eight and has freely,
voluntarily and without duress agreed to execute this Note.

 

9.             OBLIGATIONS OF PERSONS UNDER THIS NOTE.  If more
than one person signs this note, then each such person is fully and personally
obligated to keep and perform all of the promises, covenants and provisions set
forth in this note, including, without limitation, the promise to pay the full
amount secured.  All guarantors,
sureties or endorsers of this note and any person, firm or entity who takes
over these obligations, including the obligations of a guarantor, surety or
endorser of this note are also obligated to keep all of the promises, covenants
and provisions made in this note, including, without limitation the promise to
pay the full amount secured.  The
obligations of Borrower and other persons liable hereunder are joint and
several.

 

10.           LIMITS.

 

(a)           If a law which applies to this Loan and
which sets maximum loan charges is finally interpreted so that he interest or
other loan charges collected or to be collected in connection with this Loan
exceed the permitted limits, and so that Borrower is entitled to plead such law
affirmatively or as a defense to the collection of much interest or other loan
changes, then:  (i) any such loan charge
shall be reduced by the amount necessary to reduce the charge to the permitted
limits; and (ii) any sums already collected from Borrower which exceed permitted
limits will be refunded to Borrower. 
The Noteholder may choose to make this refund by reducing the principal
Borrower owes under this Note or by making direct payment to Borrower.  If a refund reduces principal, the reduction
will be treated as a partial prepayment.

 

(b)           Should any term, covenant, provision or
condition of this Note be held by a court of competent jurisdiction to be void
or invalid, the same shall not affect any other term,

 

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covenant, provision or condition of this Note and the remainder shall
be effective as though such term, covenant, provision or condition had not been
contained herein.

 

11.           NOTICE.

 

Any notice provided for in this Note shall be
given in the following manner:

 

(a)           if to Borrower: to the President in person,
or by mailing such notice to Borrower by certified mail-return receipt
requested, postage prepaid to the following address or to such other address as
Borrower may designate by notice to Noteholder as provided herein:

 

PARKER &
LANCASTER CORPORATION

711 MOOREFIELD PARK DRIVE 

RICHMOND, VIRGINIA 23236 

ATTN:  J. RUSSELL PARKER, III, PRESIDENT

 

with a copy by first class mail to the
Borrower’s follows attorney as follows:

 

GEORGE W.
ROWE, ESQUIRE

CAWTHORN, PICARD & ROWE

8310 MIDLOTHIAN TURNPIKE

RICHMOND, VIRGINIA 23235

 

(b)           to Noteholder, by certified mail return
receipt requested and by first class mall, both postage prepaid to the
following address or to such other address as Noteholder may designate to
Borrower from time to time:

 

SOUTHTRUST
BANK, N.A. 

420 N. 20TH STREET, 11th Floor

BIRMINGHAM, ALABAMA 35203

ATTN: COMMERCIAL REAL ESTATE DEPT.

 

with a copy by first class mail to
Noteholder’s attorney as follows:

 

RICHARD S.
ROTHENBERG, ESQUIRE

ROTHENBERG, HENLEY & ROBERTSON, P.C.

3412 CUTSHAW AVENUE

RICHMOND, VIRGINIA 23230

 

(c)           any notice given pursuant to the terms of
this Note shall specifically reference this Note and shall be effective and
shall be deemed to have been given upon the date of mailing, or of personal
delivery, as the case may be.

 

12.           CROSS-DEFAULT/CROSS COLLATERAL.  The Loan
is cross-defaulted with the Other Loan(s). 
A Borrower default under either the Loan or the other Loan(s) shall
likewise be deemed to be a default under the terms of the other and shall
entitle the Lender to pursue any and all remedies available to it.  The “Mortgaged Property” (“Real Property”)
as defined in the

 

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Deeds of Trust shall also secure
the obligations of the Borrower to Lender under the Other Loan(s).

 

13.           AMENDMENT ONLY IN WRITING.

 

The provisions hereof may not be waived,
changed, modified or discharged orally, but only by an agreement in writing
signed by the Borrower and the Noteholder.

 

IN WITNESS WHEREOF, the Borrower, Parker
& Lancaster Corporation, a Virginia corporation has caused this Note to be
executed by J. Russell Parker, III its duly authorized President.

 

	
  Borrower:

  	
   

  	
  Parker & Lancaster Corporation,

  
	
   

  	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  J. Russell Parker, III

  	
  [SEAL]

  
	
   

  	
   

  	
   

  	
  J. Russell Parker, III,

  
	
   

  	
   

  	
   

  	
  Title: President

  

 

6Exhibit 10.18

 

LOAN AGREEMENT

($20,000,000.00  Revolving Line of
Credit - Master)

 

THIS LOAN
AGREEMENT (“Agreement”), entered into this 29th day of May, 1998 , between
SOUTHTRUST BANK, N.A., a national banking association, (the “Lender”) and
PARKER & LANCASTER CORPORATION, a Virginia corporation, (the “Borrower”)
provides:

 

1.             RECITALS.  The Borrower plans to acquire and improve
various parcels of real property located in North Carolina and Virginia. To
facilitate the financing for the acquisition of the various parcels and
construction of the improvements, if any, on those parcels, Borrower has
received a loan commitment dated April 22, 1998, (the “Loan Commitment”) from
the Lender for a revolving line of credit in the maximum principal amount of
Twenty Million Dollars ($20,000,000.00). 
The Lender and the Borrower agree that the advances under the Revolving
Line shall be made by the Lender on the following terms and conditions:

 

2.             DEFINITIONS.  As used in this Agreement the terms listed
below shall have the following meanings unless otherwise required by the
context:

 

2.1.          Balancing Equity:  For a particular Project, the amount equal
to the negative difference between: (i) the maximum principal amount which
could be advanced under the Project Loan; and (ii) the unpaid Construction
Costs necessary (in the opinion of Lender and/or Inspector) to complete the
Project in accordance with the Plans, plus all unpaid advances under the
Project Loan.

 

2.2.          Construction Costs:  All construction costs and non-construction
costs of every sort for a Project, including the cost of the parcel of Property
(if paid out of the Project Loan proceeds), as approved by Lender.

 

2.3.          Deed(s) of Trust:  Collectively the Master Deed of Trust, the
Supplemental Deed(s) of Trust, and any other deeds of trust as contemplated
under Section 5.2.

 

2.4.          Guarantors:  J. Russell Parker, III and Barbara H.
Parker.

 

2.5.          Guaranty:  Guaranty agreement whereby the Guarantors
unconditionally guarantee the payment and performance by the Borrower of all
obligations incurred under the Revolving Line, this Agreement, and/or Loan
Documents. The Guaranty shall be in the form approved by Lender.

 

2.6.          Improvements:  The buildings and other improvements to be
constructed on a particular parcel of the Property, including amenities,
paving, parking, landscaping, grading and utility installations as specified in
the Plans.

 

2.7.          Inspector:  The party named by the Lender for inspecting
the progress of development of a Project. The Inspector shall review and approve
the Plans, the Construction

 

 

Costs, and all subcontracts for a Project, shall inspect the Project
for requested advances, and shall approve advances, if appropriate.

 

2.8.          Loan Documents:  The Loan Commitment, Project Loan
Commitment(s), Note, Master Deed of Trust, Supplemental Deed(s) of Trust,
Guaranty, this Agreement, and all other documents required by the Lender to be
executed and/or delivered by Borrower in connection with the Revolving Line.

 

2.9.          Master Deed of Trust:  Together, the master form deeds of trust
executed by Borrower in favor of Lender which will be supplemented from time to
time by the Supplemental Deed(s) of Trust. Borrower shall execute two (2) or
more separate master deeds of trust - one for each county in which a Project is
to be located. The Master Deed of Trust shall be in the form approved by
Lender.

 

2.10.        Note: 
Together, the promissory notes executed by Borrower in favor of the
Lender which reflect the money to be advanced under the Revolving Line.  Borrower shall execute two (2) separate
promissory notes - one for $15,500,000.00 for advances to be made for Projects
in North Carolina (the “NC Note”) and one for $4,500,000.00 for advances to be
made for Projects in Virginia (the “Virginia Note’). The Note shall be in the form
approved by Lender.

 

2.11.        Other Loan(s):  Any and all other loans made from time to time by Lender to
Borrower, including, but not limited to, the $350,000.00 credit line loan made
by Lender to Borrower contemporaneously with this Revolving Line.

 

2.12.        Plans: 
The plans and specifications for the construction of the Improvements
for a Project.

 

2.13.        Project:  The parcel of Property and Improvements, if any, for each
individual real estate project to be acquired and/or improved by Borrower.

 

2.14.        Project Loan:  The advances to be made by Lender to Borrower under the Revolving
Line for a Project pursuant to the applicable Project Loan Commitment.

 

2.15.        Project Loan Commitment:  The Lender’s approval form authorizing the
advance of funds under the Revolving Line for the acquisition and/or
development of a Project.

 

2.16.        Property:  The various parcels of real estate in North Carolina and Virginia
to be acquired by Borrower from time to time which are to be security for the
Revolving Line.

 

2.17.        Revolving Line:  The loan defined in Section 3.1.

 

2.18.        Supplemental Deed(s) of Trust:  The deed(s) of trust supplementing the
Master Deed of Trust executed by Borrower in favor of Lender conveying a
security interest in a Project as security for the Note.

 

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3.             THE REVOLVING LINE.

 

3.1.          The Lender agrees to lend to the Borrower the
maximum aggregate principal sum of Twenty Million Dollars ($20,000,000.00 )
upon the terms and conditions of this Agreement and the other Loan Documents.
$15,500,000.00 of the Revolving Line shall be made available for Projects
located in North Carolina and the remaining $4,500,000.00 of the Revolving Line
shall be made available for Projects located in Virginia. The Borrower agrees to
take the Revolving Line and expressly covenants to comply with and perform all
of the terms and conditions of this Agreement and all other Loan Documents.
Advances under the Revolving Line shall be made only pursuant and subject to
the terms of the Loan Commitment and the Project Loan Commitments.

 

3.2.          Upon execution of this Agreement, the
Borrower shall also execute and/or deliver to the Lender:  (a) the North Carolina Note and the Virginia
Note; (b) a Master Deed of Trust for each county in which a Project is to be
located; (c) a Guaranty Agreement (if required by the Commitment); (d) a
Borrower’s Affidavit; (e) copies of documents evidencing the Borrower’s
formation and good standing, if a partnership, limited liability company, or
corporation; and (f) an opinion of Borrower’s attorneys (in form and substance
satisfactory to Lender and its attorneys). The Borrower shall also execute and
deliver to the Lender any other documents reasonably required by the Lender or
its attorneys.

 

3.3.          A Project Commitment Letter shall be issued
upon the identification by Borrower and approval by Lender of a parcel of the
Property to be acquired and the Plans to be used by Borrower in development of
and/or construction of Improvements on that parcel. Upon such approval, Lender
shall issue a Project Commitment Letter describing the aggregate amount to be
advanced under the Revolving Line for that Project.

 

4.             CONSTRUCTION OF THE IMPROVEMENTS.  The
Borrower agrees that the Improvements shall be erected on the applicable parcel
of the Property fully complete and ready for occupancy by the date described in
the Project Loan Commitment (the “Construction Period”), and will be erected in
accordance with the Plans. A master set of Plans shall be delivered to the
Lender and each page will have been initialed or otherwise identified and
approved by the Lender and the Borrower. These Plans shall govern all questions
that may arise with respect to the construction of the Improvements. No changes
in or deviation from the Plans shall be permitted unless Borrower requests, in
writing, a change or deviation and it is approved, in writing, by the Lender.

 

5.             CONDITIONS TO FIRST ADVANCE.  The
Borrower agrees that the conditions listed below must be satisfied prior to the
first advance under each respective Project Loan Commitment:

 

5.1.          The Borrower shall deliver to the Lender:

 

(a)           a written application for the Lender’s
approval of a Project, which application shall be on a form approved by the
Lender;

 

(b)           a title insurance binder on current ALTA
Form 70 applicable to the Project insuring the Lender’s security subject only
to exceptions approved by the Lender. This

 

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binder shall be issued by a title insurance company approved by Lender,
in the name of the Lender, and be in an amount equal to the principal amount of
the Project Loan;

 

(c)           if not previously delivered, a copy of the
plans and specifications for the model of the Improvements being constructed
for the Project;

 

(d)           if not previously delivered, a copy of the
recorded plat for the subdivision in which the Project is being constructed;

 

(e)           evidence of public liability insurance
required by the Deed of Trust during the Construction Period;

 

(f)            a copy of the proposed Settlement Statement
for the acquisition of the Property for the Project;

 

(g)           a construction budget trade cost breakdown,
fixed cost contract, and such other and reasonable detailed information
concerning the components of the Construction Costs for each Project as may be
required by the Lender for its approval;

 

(h)           if the Project involves a pre-sale, a copy
of the sales agreement for the sale of the Project;

 

(i)            evidence satisfactory to Lender that the
Improvements are not located within a HUD-identified flood hazard area;

 

(j)            if requested by the Lender and not
previously provided, an appraisal for type of model to be included in the
Improvements; and

 

(k)           such other documents and deliverables as
reasonably required by the Lender, including, but not limited to those specified
in the Loan Commitment and the applicable Project Loan Commitment.

 

5.2.          The Supplemental Deed of Trust and all other
documents reasonably required by the Lender shall be duly authorized, executed,
acknowledged, recorded (when appropriate), and delivered to the Lender. If a
Project is located in a North Carolina county that does not permit the use of a
master deed of trust, the Borrower agrees to execute a separate deed of trust
in favor of Lender (in a form approved by the Lender), in lieu of the Supplemental
Deed of Trust, to secure the Note with respect to that Project.

 

5.3.          In the event the Inspector and/or Lender
determine that a Balancing Equity exists, the Borrower shall be required to
invest such amount in the Project or deposit such amount with Lender in a
non-interest bearing account. Such investment or deposit shall be disbursed to
pay Construction Costs prior to the disbursement of any Project Loan proceeds.

 

6.             SUBSEQUENT ADVANCES.

 

6.1.          Advances under each Project Loan shall be
made on a percentage or percentage of completion basis in accordance with the
terms of the Loan Commitment and/or Project Loan

 

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Commitment. Not more than one advance on each Project Loan shall be
made during any calendar month. No advance shall be due unless, in the judgment
of the Lender and Inspector, all work done in the construction and equipping of
the Improvements to the date of the advance has been done in a good and
workmanlike manner.

 

6.2.          The Borrower agrees that the conditions
listed below must be satisfied before the lender will be required to make any
advances, other than the first advance, (the “Subsequent Advances”) for that
Project:

 

(a)           any of the conditions of Article 5 which
have not been satisfied or have not remained satisfied shall nevertheless
remain conditions precedent to Subsequent Advances; and (b) the Borrower shall
deliver to the Lender: (i) a copy of the executed Settlement Statement for the
acquisition of the property for the Project; and (ii) the title insurance
policy issued in strict conformance with the title insurance binder previously
delivered to the Lender for the Project.

 

6.3.          At least three (3) business days prior to
each Subsequent Advance, the Borrower shall supply the Lender with the
following completed documents: (a)  a
Contractor’s application for payment in form approved by the Lender; (b) if
requested by the Lender, a waiver of mechanic’s and materialmen’s liens
executed by the contractor and each sub-contractor, in form and substance
satisfactory to the Lender; (c) evidence of the builders’ risk insurance
required by the Deed of Trust;  (d) a
foundation survey for the Project showing that Improvements are within lot
lines and showing building lines, easements, setback lines, etc.; and (e) such
other documents and assurances that Lender may reasonably request.

 

7.             PAYMENT OF ADVANCES.

 

7.1.          Each advance shall be deemed to be an advance
under the Project Loan, as well as an advance under the Revolving Line. Each
advance shall be made, in whole or in part, by either: (i) paying the Borrower,
or (ii) after an Event of Default, at the Lender’s discretion, paying the
contractor or any subcontractor or laborer or materialmen performing work on
the Improvements, or (iii) in such other manner as shall be mutually agreed
upon by the Borrower and the Lender. Notwithstanding anything in the Agreement
or the Loan Documents to the contrary, no advance or approval given by the
Lender, whether or not before or after an inspection of the Improvements by the
Inspector or otherwise, shall be deemed to be an approval or acceptance by the
Lender of any work or materials done or furnished with respect to any
Improvements or a representation by the Lender as to the fitness of that work
or materials.

 

7.2.          The Lender shall not be required to make any
advance under the Revolving Line or any Project Loan if, in its opinion: (i)
the amount of the advance shall, when added to all amounts previously advanced
for the Project, be greater than Construction Costs incurred by the Borrower
for that Project as of the date of the requested advance; or (ii) an unfunded
Balancing Equity exists for the Project.

 

7.3.          Notwithstanding anything in this Agreement or
any other Loan Documents to the contrary, if the Lender does not make an
advance because any condition to the making of the advance shall not have been
satisfied by the Borrower within thirty (30) days after the Borrower

 

5

 

has been notified in writing of any unsatisfied condition, then
Borrower’s failure to satisfy the condition shall be deemed an event of default
under Section 9 of this Agreement .

 

7.4.          If the Lender makes advances before they are
due because the Lender believes it advisable so to do, those advances shall be
deemed to be made pursuant to and not in modification of this Agreement.
However, the making of any such advance, in whole or in part, shall not be
deemed a waiver of any unsatisfied condition or an acceptance or approval of
any act or failure to act by the Borrower .

 

7.5.          The Borrower shall receive the advances to be
made under this Agreement and shall hold the right to receive such advances as
a trust fund. Borrower will first apply the advances to the payment of the
Construction/Development Costs for the Improvements before using any part of
the advance for any other purpose.

 

8.             CERTIFICATE OF OCCUPANCY. When the Improvements for a Project have been
completed, the Borrower agrees to supply the Lender, upon its request, a copy
of a certificate of occupancy to be issued by the appropriate governmental
official.

 

9.             DEFAULTS/REMEDIES.

 

9.1.          The following shall constitute events of
default under this Agreement (the “Events of Default”):

 

(a)           If at any time title to any of the parcels
of the Property or the priority of the Deed of Trust are not satisfactory to
Lender’s attorneys, in the exercise of their reasonable discretion, regardless
of whether the lien, encumbrance or other question existed at the time of any
prior advance; or

 

(b)           If the Borrower assigns this Agreement or
any interest therein, or if (except under the circumstances, if any permitted
in the Deed of Trust) the Property is conveyed without the written consent of
the Lender; or

 

(c)           If any of the Improvements encroaches upon
any street, easement, or upon adjoining property, or violates any setback
restrictions, however created, or the requirements of any governmental
authority having jurisdiction, or any adjoining structure encroaches upon the
Property or on any easement appurtenant thereto to an extent deemed material by
Lender’s attorneys and the encroachment or violation is not removed or insured
over by the title insurance company insuring the lien of the Deed of Trust; or

 

(d)           If, in the judgment of the Lender, any of
the Improvements are materially damaged by fire or otherwise and the insurance
proceeds plus the unadvanced portion of the applicable Project Loan are
insufficient to complete the Improvements and the Borrower fails to fund the
deficit, if any, or fails to restore the Improvements in a timely manner; or

 

(e)           If any material portion of the Project be
taken by eminent domain; or

 

(f)            If the Borrower or any Guarantor shall be
involved in financial difficulty as evidenced, (i) by making an assignment for
the benefit of its creditors; (ii) by filing a petition

 

6

 

in bankruptcy for reorganization or for the adoption of an arrangement
under the Bankruptcy Act (as now or in the future amended); (iii) by consenting
to the appointment of a receiver or trustee for all or a substantial part of
its property or to the filing of a petition against it under said Bankruptcy
Act; (iv) by the entry of a court order appointing a receiver or trustee for
all or a substantial part of its property or approving as filed in good faith a
petition filed under said Bankruptcy Act (in both cases without the consent of
the Borrower or such Guarantor), which order shall not be vacated, set aside or
stayed within sixty (60) days from the date of entry; or

 

(g)           If the Borrower makes any changes in the
approved Plans without the Lender’s prior written consent or otherwise fails
within the Construction Period to construct the Improvements in accordance with
the applicable Plans and in accordance with all laws, rules, regulations and
requirements of all governmental authorities having or claiming jurisdiction,
now existing or subsequently enacted; or

 

(h)           Abandons the Project or fails to prosecute
the construction of the Improvements with diligence and dispatch for a period
time as Lender in its reasonable judgment shall determine is appropriate; or

 

(i)            If the Borrower does not permit the Lender,
or its agents, after reasonable notice to enter upon and inspect a Project; or

 

(j)            If the Borrower fails to comply with any
requirement of any governmental authority having jurisdiction over the
Property; or

 

(k)           If the Borrower executes any security
agreement (other than as provided in the Deed of Trust) on any materials or
fixtures used in the construction or operation of or placed upon the Project;
or if any such materials or fixtures are purchased in conditional sale
transactions or otherwise so that the ownership thereof will not vest
unconditionally, in the Borrower, free from encumbrance, on delivery at the
Project; or if the Borrower does not furnish to Lender any requested contracts,
bills of sale, statements, receipted vouchers and agreements, or any of them,
under which the Borrower claims title to such materials, fixtures and articles;
or

 

(l)            If the Borrower or any of the Guarantors
fail to furnish the Lender with financial statements, such as balance sheets
and profit and loss statements, and such other statements as the Lender may
reasonably require to determine the financial condition of the Borrower or the
Guarantors. (All such statements shall be prepared at the expense of the
Borrower and shall be acceptable to the Lender in both form and substance.); or

 

(m)          If the Borrower shall fail to make the
investment in the Project as required by Section 5.3 of this Agreement; or

 

(n)           If the Borrower or Guarantor breaches or
fails to perform any of the conditions, stipulations, agreements or covenants
contained in this Agreement or the other Loan Documents; or

 

(o)           If the Borrower or Guarantor defaults under
any other loans made to either of them by Lender.

 

7

 

9.2.          If an Event of Default occurs, Lender, at its
option, may exercise one or more of the following remedies:

 

(a)           take possession of one or more of the
Projects and complete construction of the Improvements pursuant to Section 10;

 

(b)           suspend and/or terminate any obligation to
make any further advances under a Project Loan and/or the Revolving Line;

 

(c)           declare the Note, in whole or in part,
immediately due and payable;

 

(d)           recover from Borrower any and all
commercially reasonable expenses (including reasonable attorneys fees) incurred
by Lender in exercising its remedies or otherwise enforcing the terms of this
Agreement or the other Loan Documents; and

 

(e)           exercise any other remedies provided to
Lender under the Loan Documents (an Event of Default being deemed a default
under each of the other Loan Documents).

 

9.3.          The exercise by the Lender of any one or more
of the remedies provided in this Agreement or other Loan Documents shall not
prevent the subsequent exercise by the Lender of any one or more of the other
remedies provided to it. All remedies provided for in this Agreement or the
other Loan Documents are cumulative and may, at Lender’s election, be exercised
alternatively, successively or in any other manner and are in addition to any
other rights provided by law.

 

9.4.          Notwithstanding anything contained in this
document to the contrary, Lender agrees that prior to the exercise of any of the
remedies provided under this Agreement, Lender shall give Borrower written
notice of default and thereupon Borrower shall have ten (10) days (in case of a
monetary default) or thirty (30) days (in case of a non-monetary default) after
the date of the notice to cure or cause to be cured the default complained of.
In addition, in cases of non-monetary default if complete remedy is impossible
within the thirty (30) days, Borrower shall have an additional period (to be
determined by the Lender in its sole discretion but in any event not to exceed
six (6) months) in which to cure the default, provided Borrower shall not
otherwise be in default during the additional period.

 

10.           COMPLETION OF CONSTRUCTION. If at any time prior to the completion of the
Improvements for a Project, an Event of Default occurs, then the Lender, at its
option, may enter into possession of the Project and perform any and all work
and labor necessary to complete the Project substantially in accordance with
the Plans and take whatever other action which may be necessary or desirable in
the opinion of the Lender to complete the Project. For this purpose, the
Borrower appoints the Lender its true and lawful attorney in fact with full
power of substitution to complete the Project in the name of the Borrower, and
empowers the Lender: to use any funds of the Borrower for the purpose of
completing the Project in accordance with the Plans; to make such additions and
changes and corrections in the Plans which shall be necessary or desirable to
complete the Project in substantially the manner contemplated by the Plans; to
employ such contractors, subcontractors, agents, architects, and inspectors as
shall be required for these purposes; to pay, settle or compromise all existing
bills and claims which are

 

8

 

or may be liens against the Project, or may
be necessary or desirable for the completion of the work, or to clear title; to
execute all applications, certificates and other documents in the name of the
Borrower which may be required under any agreement of the Borrower; and to do
any and every act which the Borrower might do in its own behalf in completing
the Improvements. It is agreed that this power of attorney shall be deemed to
be a power coupled with an interest which cannot be revoked. The Lender shall
also have power to prosecute and defend all actions or proceedings in
connection with the Project or the construction of the Improvements and to take
such action and require such performance as it deems necessary.

 

11.           EXPENSES. The Borrower shall pay all fees and charges incurred in the procuring
and making of the Revolving Line and Project Loans, including, without
limitation, charges for mortgagee title insurance, the examination of title to
the Property, expenses of surveys, mortgage recording tax, fees of the
Inspector, and the fees of the attorneys for the Lender. The Borrower shall pay
any and all insurance premiums, taxes, assessments, water rates, sewer rates
and other charges, liens and encumbrances upon the Property and any other
amounts necessary for the construction of the Improvements . These amounts,
unless sooner paid, shall be paid from time to time when due either to the
person to whom the payments are due or to the Lender if the Lender has paid it.
The Lender may, at its option, deduct from any advance to be made under this
Agreement any amounts necessary for the payment of these items when due, and
apply such amounts in making those payments. All sums applied in this manner
shall be deemed advances under the Note and applicable Project Loan, if any,
and secured by the Deed of Trust.

 

12.           BORROWER REPRESENTATIONS. The Borrower represents and warrants that it
shall comply with all terms and conditions of the Loan Documents, including,
but not limited to the Loan Commitment and the Project Loan Commitments. This
representation and warranty shall be deemed to be continuing and repeated by
the Borrower upon the acceptance of each advance under the Revolving Line.

 

13.           CROSS-DEFAULT/CROSS COLLATERAL.  The Loan
is cross-defaulted with the Other Loan(s). 
A Borrower default under either the Loan or the Other Loan(s) shall
likewise be deemed to be a default under the terms of the other and shall
entitle the Lender to pursue any and all remedies available to it.  The “Mortgaged Property” as defined in the
Deeds of Trust shall also secure the obligations of the Borrower to Lender
under the Other Loan(s).

 

14.           COMMITMENT FEE.   No commitment/loan fee is being
charged in connection with this transaction. 
The Borrower shall pay a Thirty Dollar ($30.00) fee to the Lender for
each inspection of that Project conducted by the Inspector and/or the
Lender.  These fees shall be due and
payable as inspections are made.

 

15.           LIMITATION ON PROJECTS. Notwithstanding anything in this Agreement to
the contrary, the Lender’s obligation to make additional advances or issue
Project Loan Commitments shall be subject to the restrictions relative to the
number of unsold or incomplete Projects or similar restrictions set out in the
Loan Commitment.

 

9

 

16.           MISCELLANEOUS.

 

16.1.        Entire Agreement. This instrument
(together with any exhibits attached and incorporated documents) constitutes
the entire agreement between the parties, and supersedes any and all prior
agreements, arrangements and understandings, whether oral or written, between
the parties.

 

16.2.        Assignment. This Agreement may not be
assigned by Borrower without the written consent of Lender, which may be
arbitrarily withheld.

 

16.3.        Modification. No modification of this
Agreement shall be binding unless in writing and signed by the party against
whom or which it is sought to be enforced.

 

16.4.        Waiver. No delay or failure to exercise
any right or remedy under this Agreement will impair any such right or remedy,
nor shall it be construed to be a waiver of any breach or default, or an
acquiescence in any similar breach or default subsequently occurring. No waiver
of any term or provisions of or of any breach or default under this Agreement
shall be valid unless it is in writing and signed by the party against which it
is sought to be enforced. The written waiver will be effective only to the
extent specifically set forth in such writing. The party for whose benefit a condition
is included shall have the unilateral right to waive such condition.

 

16.5.        Headings. The captions and headings
contained in this document are solely for convenience and reference and do not
constitute a part of this Agreement.

 

16.6.        Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the respective heirs, legal
representatives, successors and permitted assigns of the parties (including,
without limitation, in the case of Lender, any third parties now or hereafter
acquiring any interest in the Note or any part thereof, whether by virtue of
assignment, participation or otherwise).

 

16.7.        Construction. This Agreement and each
and every related document is to be governed by, and construed in accordance
with, the internal laws of the State of North Carolina without giving effect to
its conflict of laws principles. Whenever the context so requires, the neuter
gender shall include the masculine and feminine, and the singular number shall
include the plural.

 

16.8.        Exhibits. All exhibits and schedules, if
any, are attached and incorporated by this reference and made a part of this
document. The term “Agreement” shall be deemed to include all such exhibits and
schedule.

 

16.9.        Notices. All notices and written
consents required under this Agreement shall be in writing and shall either be:
a) personally served; b) delivered by a nationally recognized overnight express
delivery service (deemed received the next business day); or                c) posted by certified United States
mail, postage prepaid, return receipt requested (deemed received three (3) days
after posting). Such shall be addressed as follows or at such other address as
may be from time to time designated in writing in accordance with this section:

 

10

 

	
   

  	
   

  	
   

  	
   

  	
  Courtesy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To Borrower:

  	
   

  	
  Parker & Lancaster
  Corporation

  	
   

  	
  Copy to:  George W. Rowe

  
	
   

  	
   

  	
  711 Moorefield Park Drive

  	
   

  	
  Cawthorne, Picard & Rowe

  
	
   

  	
   

  	
  Richmond, VA 23236

  	
   

  	
  8310 Midlothian Turnpike

  
	
   

  	
   

  	
  Attn: J. Russell Parker, III,
  President

  	
   

  	
  Richmond, VA 23235

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Courtesy

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  To Lender:

  	
   

  	
  SouthTrust Bank , N.A.

  	
   

  	
  Copy to: James M. Day

  
	
   

  	
   

  	
  420 N. 20th St., Suite 1100

  	
   

  	
  Burns, Day & Presnell,
  P.A.

  
	
   

  	
   

  	
  Birmingham, Ala. 35203

  	
   

  	
  2626 Glenwood Ave./Suite 560

  
	
   

  	
   

  	
  Attn:  Commercial Real Estate Dept.

  	
   

  	
  Raleigh, NC 27608

  

 

All notices to a party may be executed and
sent by the other party’s legal counsel. 
Failure to send the courtesy copy shall not invalidate a notice
otherwise properly given.

 

16.10.      Counterparts. This Agreement has simultaneously
been executed in a number of identical counterparts, each of which, for all
purposes, shall be deemed an original.

 

16.11.      Additional Acts. Each party, at Borrower’s
sole expense, will execute and deliver all additional documents and do all such
acts as may be reasonably necessary to carry out the provisions and intent of
this Agreement.

 

16.12.      Relationship of Parties. Nothing in this
Agreement shall be deemed or construed to constitute or create a partnership,
association, joint venture, or agency between the parties.

 

16.13.      Liability. When a party to this Agreement
consists of more than one individual or entity, that party’s liabilities and
obligations under this Agreement shall be joint and several.

 

16.14.      Third Parties. Except as specifically set
forth, nothing expressed or implied in this document is intended or shall be
construed to confer any rights or remedies upon any person other than the named
parties and their successors or permitted assigns.

 

16.15.      Indemnity. The Borrower agrees to indemnify
and hold the Lender harmless from and against all liabilities, claims, damages,
costs and expenses (including but not limited to reasonable legal fees and
disbursements) arising out of or resulting from any defective workmanship or
materials occurring in the construction of the Improvements. Upon demand by the
Lender, the Borrower will defend any action or proceeding brought against the
Lender alleging any defective workmanship or materials, or the Lender may elect
to conduct its own defense at the expense of the Borrower. The provisions of
this paragraph will survive the termination of this Agreement and the repayment
of the Loan.

 

16.16.      Conflicts. In the event of any conflict
between the provisions of this Agreement and the provisions of the other Loan
Documents, the provisions of this Agreement shall control. Nothing in this
document shall, however, diminish the Lender’s right to require, as condition
to any advance, the satisfaction of each and every condition of its Loan
Commitment and/or applicable Project Loan Commitment, which has not been
waived.

 

11

 

16.17.      Incorporation. Any default by Borrower in
the performance of any obligation, covenant or agreement contained in this
document shall constitute and be deemed to be a default under the terms of the
Note and the other Loan Documents, entitling Beneficiary to exercise any and
all rights and remedies contained in those documents, including, without
limitation, the right to declare the Note immediately due and payable.

 

16.18.      Severability. Whenever possible, each
provision of this Agreement and every other Loan Document shall be interpreted
in such manner as to be valid under applicable law. If any term or provision is
illegal, or unenforceable, for any reason whatsoever, such shall not affect the
validity of the remainder. In lieu of the illegal or unenforceable provision,
there shall be automatically added as a part of this Agreement a provision as
similar in terms as necessary to render the provision legal and enforceable.

 

16.19.      Form of Documents. All of the documents,
instruments, certificates or other items required to be delivered to Lender
shall be in form and substance satisfactory to the Lender and its attorneys.

 

IN WITNESS WHEREOF, the undersigned have
executed and delivered this Agreement as of the date first above written.

 

	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  SOUTHTRUST BANK, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  David P. Adams

  	
   

  
	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  PARKER & LANCASTER
  CORPORATION,

  
	
   

  	
  a Virginia Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  J. Phillip Harris

  	
   

  
	
   

  	
  Vice President

  

 

12

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