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REE financed its purchase of the Dunn property and its
construction of the building thereon with a 1-year construction
loan from SouthTrust Bank of Alabama, N.A. (SouthTrust Bank) in
the amount of $450,000. The mortgage note required REE to make
monthly payments of interest, but not principal, computed at a
rate of 3\4 percent above SouthTrust Bank's "base rate". The
principal balance was due and payable on October 23, 1992. REE's
closing costs of the mortgage note included a loan commitment fee
in the amount of $4,500.
REE and SouthTrust Bank also executed a construction loan
agreement on October 23, 1991, which provided for the loan
proceeds to be advanced in two installments. Under the
agreement, the first installment was to be advanced for the
purchase of the Dunn property, and the second installment was to
be advanced upon the completion of the improvements.
REE's mortgage note was secured under a mortgage and
security agreement by the Dunn property and its improvements and
REE's interest in the Blockbuster lease. Hollis Wilson Crenshaw,
Inc., an independent appraiser, submitted an appraisal to
SouthTrust Bank that valued the Dunn property with the
Blockbuster lease at $870,000. The mortgage and security
agreement also provided that REE was ultimately responsible for
the costs of any remedial action required to correct
environmental problems. Although he was not a direct borrower,
Eli personally guaranteed the mortgage note.
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Last modified: May 25, 2011