EXHIBIT 10.4
FIRST AMENDMENT
TO
CONSTRUCTION LOAN AGREEMENT, DEED OF TRUST
AND
OTHER LOAN DOCUMENTS
This FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT, DEED OF TRUST AND
OTHER LOAN DOCUMENTS (this "Amendment") is entered into as of April 25, 2002
("Amendment Effective Date") by and among FERRY BUILDING INVESTORS, LLC, a
California limited liability company ("Borrower"), FERRY BUILDING ASSOCIATES,
LLC, a California limited liability company ("Associates"), WEO-FERRY BUILDING,
LLC, a Delaware limited liability company ("Project Entity"), and RIVERSIDE
FINANCE COMPANY, L.L.C., a Delaware limited liability company ("Lender").
RECITALS:
A. Reference is made to that certain Construction Loan Agreement made by
and between Lender and Borrower dated as of December 31, 2001 (the "Original
Loan Agreement"). All capitalized and undefined terms used in this Amendment
shall have the meanings given to them in the Loan Agreement.
B. Reference is made to the Deed of Trust, which was recorded in the
Official Records of the City and County of San Francisco (the "Official
Records") on December 31, 2001 as Instrument No. 2001H081159.
C. By this Amendment, Lender, Associates, the Project Entity and Borrower
amend the Original Loan Agreement and the other Loan Documents, effective as of
the Amendment Effective Date, on the terms and subject to the conditions of this
Amendment.
NOW, THEREFORE, the parties hereto hereby agree to amend the Loan
Documents as follows:
1. Definitions. The following definitions are hereby deleted in their
entirety from the Original Loan Agreement and replaced with the following.
"Development and Management Agreements" - means, collectively, (i) the
Development Co-Management Agreement between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, dba The
Jefferson Company, and Borrower dated as of September 15, 1999, (ii) the
Development Co-Management Agreement between ▇▇▇▇▇▇/▇▇▇▇▇, LLC and Borrower,
dated as of August 1, 1999, as amended, (iii) the Development Management
Agreement between WEO and Borrower dated June 20, 2000, or any other substitute
or additional contract for
development management, property management and/or brokerage services for the
Property, and any amendment thereof, in each case, that has been approved by
Lender.
"Disbursement Budget" - means the design and construction budget for the
Improvements, as approved by Lender from time to time.
"EOP Project Investor" - means EOP - Ferry Building Investor, L.L.C., a
Delaware limited liability company.
"Loan" - means the principal sum that Lender agrees to lend and Borrower
agrees to borrow pursuant to the terms and conditions of this Agreement: SIXTY
MILLION, EIGHT HUNDRED EIGHTY-TWO THOUSAND, EIGHT HUNDRED NINETY-SIX AND
NO/100THS DOLLARS ($60,882,896).
"Maturity Date" - means the earliest to occur of (i) February 27, 2004,
(ii) the date that is one hundred eighty days (180) days after the date that
either of the "B Unit" or the "C Unit" (with each of such quoted terms defined
as provided in the Operating Agreement of Project Entity) is transferred to the
EOP Project Investor or any person or entity controlling, controlled by or under
common control with the EOP Project Investor; and (iii) the date on which all
interests of WEO in the Project Entity are sold or otherwise transferred to any
person or entity that does not control, is not controlled by or is not under
common control with either the EOP Project Investor or WEO.
"Required Equity Contribution" - means THIRTY-TWO MILLION, SEVEN HUNDRED
EIGHTY-THREE THOUSAND, NINETY-EIGHT AND NO/100THS DOLLARS ($32,783,098).
2. Amendment of Maximum Amount of Loan Throughout Loan Documents. In each
place in each of the Loan Documents where the amount of the Loan is set forth as
being FIFTY-FIVE MILLION, NINE HUNDRED THOUSAND AND NO/100THS DOLLARS
($55,900,000), such amount is here by stricken and replaced with the following:
SIXTY MILLION, EIGHT HUNDRED EIGHTY-TWO THOUSAND, EIGHT HUNDRED NINETY-SIX AND
NO/100THS DOLLARS ($60,882,896).
3. Required Equity Contribution as Condition to Disbursement. The parties
acknowledge that Borrower has not yet invested the full amount of the Required
Equity Contribution into the acquisition and development of the Property and
Improvements because "Investor" (as defined in the Operating Agreement of
Borrower) has not yet contributed a certain portion (the "Future Investor
Contribution") of the total equity that Investor is required to contribute under
such Operating Agreement. Notwithstanding the foregoing and the provisions of
Section 3.1(e) of the Original Loan Agreement to the contrary, Borrower will be
deemed to have invested the Future Investor Contribution for purposes of
satisfying the condition set forth in such Section 3.1(e) and Lender shall make
disbursements of the Loan as though Borrower has made the full Required Equity
Contribution; provided, however, that Lender shall not be obligated to make
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disbursements under the Loan to the extent that the ratio of (a) disbursed
proceeds of the Loan to (b) equity invested by Borrower in the acquisition and
development of the Property and Improvements (disregarding any portion of the
Future Investor Contribution that remains uncontributed as of the date of such
determination), in each case, as of the date of determination, exceeds
1.85714:1.0 (i.e., for every $1.00 in equity actually invested by Borrower, the
Lender shall only be obligated to advance $1.85714 in Loan proceeds). If, at any
time, the Investor fails to remain obligated and reasonably likely, in the
reasonable discretion of Lender, to make some or all of the then-remaining
Future Investor Contribution (the "Failed Investor Contribution"), then for
purposes of such Section 3.1(e) Borrower no longer shall be deemed to have
invested that portion of the Future Investor Contribution equal to the Failed
Investor Contribution, and Lender shall not be obligated to make further
disbursements under the Loan until Borrower has invested an amount equal to the
Failed Investor Contribution.
4. Pre-Closing Loan Disbursements. Attached to this Amendment as Exhibit B
and incorporated into the Agreement by this reference is a schedule of advances
that were made by Lender to Borrower prior to the date of the closing of the
Loan. Notwithstanding the fact that such advances occurred prior to the date of
the closing of the Loan, Lender and Borrower hereby agree that each of such
advances shall be treated as if it were a disbursement of proceeds of the Loan
under and subject to the provisions of the Loan Documents, in each case, as of
the date of each such advance. In addition, the first sentence of the Section 1
of the Note is hereby deleted in its entirety and replaced with the following:
"As used in this Note, each interest period (each an "INTEREST PERIOD") shall be
the period of one month commencing on the date of this Note, or if earlier, the
date of the initial advance of funds evidenced by this Note, as shown in Exhibit
B of the first amendment to the Loan Agreement (provided, however, that the
first Interest Period shall commence on such date and shall end on the last day
of the next following calendar month), and each one month period thereafter,
commencing, in each case, on the first day following the expiration of the
immediately preceding Interest Period."
5. Exhibits C and D. Exhibits C and D to the Original Loan Agreement are
hereby deleted in their entirety and replaced with Exhibits C and D to this
Amendment, which are incorporated into the Agreement by this reference.
6. Confirmation of Guaranties. Each of Associates and the Project Entity
hereby reconfirms its repayment guaranty in favor of Lender, as well as the
other Loan Documents related thereto, notwithstanding the effect of this
Amendment upon any of the Loan Documents.
7. Errata. In Section 4.2 of each of the Deed of Trust and the deed of
trust made by Associates securing Associates' repayment guaranty, "7.11" is
hereby deleted and replaced with "7.12". In addition, the following is hereby
added to the end of Section 11.1(b) of the Original Loan Agreement: "; or a
default by Borrower (following any applicable notice and cure period) under any
of the Other Related Documents".
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Section 1.2 of the Original Loan Agreement is hereby deleted in its entirety and
replaced with the following:
1.2 EXHIBITS A, B, C, D, E and F, all attached hereto, are hereby
incorporated into this Agreement.
8. Miscellaneous. This Amendment is effective as of the Amendment
Effective Date. Each of the Loan Documents, as originally executed by the
applicable parties (including, without limitation, the Original Loan Agreement)
shall remain in full force and effect, except as expressly otherwise provided in
this Amendment. As used in this Amendment and in the Original Loan Agreement,
the term "Agreement" shall mean the Original Loan Agreement, as modified by this
Amendment, and each reference to each of the other Loan Documents shall
hereafter refer to the applicable Loan Document, as amended by this Amendment.
This Amendment may be executed in two or more counterparts, each of which shall
be an original, and all of which together shall constitute one original of this
Amendment. A memorandum of this Amendment shall be recorded in the Official
Records promptly following the execution and delivery hereof in the form
attached to this Amendment as Exhibit A.
IN WITNESS WHEREOF, the parties to this Amendment do hereby execute and
deliver this Amendment as of the date first written above, but effective as of
the Amendment Effective Date.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
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"Lender"
Riverside Finance Company, L.L.C.,
a Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership,
its sole member
By: Equity Office Properties Trust,
a Maryland real estate investment trust,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------------------
Title: Senior Vice President - Development
Investments
-----------------------------------------
"Borrower"
Ferry Building Investors, LLC,
a California limited liability company
By: WEO - Ferry Building, LLC,
a Delaware limited liability company,
its Manager and Class A Member
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Its: Manager
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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"Associates"
Ferry Building ASSOCIATEs, LLC,
a California limited liability company
By: WEO - Ferry Building, LLC,
a Delaware limited liability company,
its Manager and Class A Member
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Manager
"Project Entity"
WEO - FERRY BUILDING, LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Manager
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EXHIBIT A
FORM OF MEMORANDUM
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
================================================================================
MEMORANDUM OF FIRST AMENDMENT TO CONSTRUCTION LOAN
AGREEMENT, DEED OF TRUST AND OTHER LOAN DOCUMENTS
THIS MEMORANDUM OF FIRST AMENDMENT TO CONSTRUCTION LOAN AGREEMENT,
DEED OF TRUST AND OTHER LOAN DOCUMENTS ("Memorandum") is made as of April 25,
2002, by and among FERRY BUILDING INVESTORS, LLC, a California limited liability
company ("Borrower"), FERRY BUILDING ASSOCIATES, LLC, a California limited
liability company ("Associates"), WEO-FERRY BUILDING, LLC, a Delaware limited
liability company ("Project Entity"), and RIVERSIDE FINANCE COMPANY, L.L.C., a
Delaware limited liability company ("Lender").
RECITALS
A. Reference is made to that certain Construction Loan Agreement
made by and between Lender and Borrower dated as of December 31, 2001 (the
"Original Loan Agreement"). All capitalized and undefined terms used in this
Amendment shall have the meanings given to them in the Loan Agreement.
B. Reference is made to the Deed of Trust, which was recorded in the
Official Records of the City and County of San Francisco (the "Official
Records") on December 31, 2001 as Instrument No. 2001H081159.
C. Reference is made to that certain Deed of Trust with Absolute
Assignment of Leases and Rents, Security Agreement and Fixture Filing of even
date herewith executed by Associates, as Trustor, to ▇▇▇▇▇▇▇ Title Guaranty
Company, as Trustee, for the benefit of Lender, as Beneficiary (the "Associates
Deed of Trust"), which was recorded in the Official Records on December 31, 2002
as Instrument No. 2001H081160, the lien of which secures the obligations of
Associates under a repayment guaranty in favor of Lender.
D. Reference is made to that certain off record First Amendment to
Construction Loan Agreement, Deed Of Trust and Other Loan Documents dated as of
the date of this Memorandum by and among the parties to this Memorandum (the
"First Amendment").
NOW, THEREFORE, the parties agree as follows:
1. Each of Borrower, Associates, Project Entity and Lender hereby
agrees to the amendment of, and hereby so amends, each of the Loan Documents,
including, without limitation, each of the Deed of Trust and the Associates Deed
of Trust, on the terms and subject to the conditions set forth in the First
Amendment.
2. This Memorandum shall be binding on and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors and
assigns.
3. This Memorandum may be executed in any number of counterparts,
each of which when executed and delivered will be deemed to be an original and
all of which, taken together, will be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum
as of the date first above written.
"Lender"
Riverside Finance Company, L.L.C.,
a Delaware limited liability company
By: EOP Operating Limited Partnership,
a Delaware limited partnership,
its sole member
By: Equity Office Properties Trust,
a Maryland real estate investment trust,
its general partner
By:______________________
Name:____________________
Title:_____________________
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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"Borrower"
Investors, LLC,
a California limited liability company
By: WEO - Ferry Building, LLC,
a Delaware limited liability company,
its Manager and Class A Member
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By: ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Manager
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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"Associates"
ASSOCIATEs, LLC,
a California limited liability company
By: WEO - Ferry Building, LLC,
a Delaware limited liability company,
its Manager and Class A Member
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By: ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: Manager
"Project Entity"
WEO - FERRY BUILDING, LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇/Equity Office, LLC,
a Delaware limited liability company,
its Manager
By: ▇▇▇▇▇▇ Investors - California, LLC,
a Delaware limited liability company,
its Manager
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Manager
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State of California
County of San Francisco
On _______________, before me, __________________________,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies) and that
by his/her/their signature(s) on the instrument, the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------
Notary's Signature
State of California
County of San Francisco
On _______________, before me, __________________________,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies) and that
by his/her/their signature(s) on the instrument, the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------
Notary's Signature
State of California
County of San Francisco
On _______________, before me, __________________________,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies) and that
by his/her/their signature(s) on the instrument, the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------
Notary's Signature
State of California
County of San Francisco
On _______________, before me, __________________________,
personally appeared ________________________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies) and that
by his/her/their signature(s) on the instrument, the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------
Notary's Signature
EXHIBIT B
PRE-CLOSING LOAN DISBURSEMENTS
DATE OF ADVANCE AMOUNT OF ADVANCE
--------------- -----------------
02/28/01 2,047,325.07
03/22/01 1,039,469.83
04/06/01 620,189.89
04/10/01 1,750,000.00
04/10/01 695,691.32
04/25/01 1,482,239.66
04/27/01 (2,560.00)
05/25/01 1,993,663.40
06/25/01 1,748,243.27
07/25/01 1,685,129.47
08/27/01 2,014,180.85
09/25/01 2,426,770.01
10/25/01 1,926,546.10
11/28/01 1,878,613.91
=================
$ 21,305,502.77
EXHIBIT C
FINANCIAL REQUIREMENT ANALYSIS
The Financial Requirement Analysis set forth herein represents an analysis
of the total costs necessary in Borrower's estimation to perform Borrower's
obligations under the Loan Documents.
FERRY BUILDING - CONSTRUCTION LOAN FORECASTED COSTS
Amounts Advanced Additional Amounts
Equity Contributed Additional Equity Under Construction To Be Advanced
By Borrower Through To Be Contributed Loan Through Under Construction
Total Forecasted Costs(1) 11/30/01(2) By Borrower(2) 11/30/01 Loan
------------------------- ------------------- ----------------- ------------------ ------------------
$93,665,994 $11,472,194 $21,310,904 $21,305,503 $39,577,393
(1) The Total Forecasted Costs shall be updated monthly by Borrower and
submitted with the following month's disbursement request, provided that the
Total Cash amount in the Total Forecasted Costs column shall not change, except
as expressly permitted in this Agreement.
(2) Borrower's Required Equity Contribution in the amount of $32,783,098
is reflected in these two columns.
EXHIBIT D
DISBURSEMENT PLAN
A. Timing of Disbursement. Unless another provision of this Agreement
specifies otherwise, on or before the fifteenth (15th) day of each month,
Borrower shall submit to:
Equity Office Properties Trust
c/o ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
PNC Real Estate Finance
c/o ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Stop : P1-▇▇▇▇-18-3
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
a written itemized statement, signed by Borrower ("Application for Payment")
setting forth:
1. A description of the work performed, material supplied and/or costs
incurred or due for which disbursement is requested with respect to any line
item ("Item") shown in the Disbursement Budget. Notwithstanding the amount of
any line item shown in the Disbursement Budget, Borrower may reallocate amounts
among the line items by allocating cost savings in any line item to Contingency,
and amounts from the Contingency to any line item with a cost overrun; provided,
however, that the sum of (i) the Required Equity Contribution plus (ii) the
aggregate amount of all disbursements under the Loan shall not exceed Total
Forecasted Costs; and
2. The total amount incurred, expended and/or due for each requested Item
less prior disbursements.
Each Application for Payment by Borrower shall constitute a representation and
warranty by Borrower that Borrower is in compliance with all the conditions
precedent to a
disbursement specified in this Agreement. With respect to Borrower's remaking of
the representations and warranties set forth in Article 6 of this Agreement on
the date of submission of each Application for Payment, to the extent
circumstances have changed for reasons beyond the reasonable control of Borrower
such that Borrower must qualify such representations and warranties as of the
date of delivery of any such Application for Payment, such qualification, to the
extent it renders the applicable representation materially untrue or breaches
the applicable warranty, shall merely be a failure of condition to Lender's
obligation to disburse funds under the provisions of this EXHIBIT D, as opposed
to constituting an Event of Default.
B. Lender's Right to Condition Disbursements. Lender shall have the right
to condition any disbursement upon Lender's receipt in the appropriate form of
the following submissions and Lender's reasonable determination that such
submissions comply with the requirements set forth below:
1. The Application for Payment and an itemized requisition for payment;
2. Bills, invoices, documents of title, vouchers, statements, receipts and
any other documents evidencing the total amount expended, incurred or due for
any requested Items;
3. Evidence of Borrower's use of a lien release, joint check and voucher
system acceptable to Lender for payments or disbursements to any contractor,
subcontractor, materialman, supplier or lien claimant;
4. Architect's, inspector's and/or engineer's periodic certifications of
the percentage and/or stage of construction that has been completed and its
conformance to the Plans and Specifications and governmental requirements based
upon any such architect's, inspector's and/or engineer's periodic physical
inspections of the Property and Improvements;
5. Waivers and releases of any mechanics' lien, stop notice claim,
equitable lien claim or other lien claim rights (conditional for costs to be
paid from the current Application for Payment, and unconditional for all prior
costs which have been disbursed by Lender by the twenty-fifth (25th) day of the
immediately preceding month or were to have been paid from Borrower's own funds
under the Disbursement Budget);
6. Reasonable evidence of Borrower's compliance with the provisions of the
Sections of this Agreement entitled CONSTRUCTION and AUTHORITY/ENFORCEABILITY.
Where this Agreement calls for the delivery of a certificate as evidence of any
action, such certificate, if factually accurate, shall constitute such
reasonable evidence;
7. A written release executed by any surety to whom Lender has issued or
will issue a set-aside letter and/or any public entity or agency which is a
beneficiary under any
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instrument of credit, set-aside letter or standby letter of credit which Lender
has issued or will issue with respect to the Loan;
8. For final payment only with respect all or any separate, independent
portion of the Improvements, valid, recorded Notice(s) of Completion for the
Improvements or any portions of the Improvements for which Notice(s) of
Completion may be recorded under applicable law, and final payment lien release
waivers (conditional with respect to costs to be paid from such final payment,
and unconditional for all other costs);
9. Certificate of Substantial Completion from the Architect and Engineer,
if any, prior to the final retention disbursement;
10. Any other document, requirement, evidence or information that Lender
may have reasonably requested under any provision of the Loan Documents at least
thirty (30) days prior to the Application for Payment in question; and
11. Except with respect to items covered under #12 and #13 below, evidence
that any goods, materials, supplies, fixtures or other work in process for which
disbursement is requested have been incorporated into the Improvements.
12. In the event any Application for Payment includes the cost of
materials stored at a location other than the Property ("Offsite Materials"),
each of the following: (a) evidence that the Offsite Materials have been
purchased by Borrower, have been segregated from other materials in the facility
and have been appropriately marked to indicate Borrower's ownership thereof and
Lender's security interest therein; and (b) evidence that the Offsite Materials
are insured as required by this Agreement.
13. In the event that any Application for Payment includes the cost of
materials stored on the Property ("Onsite Materials"), each of the following:
(a) evidence that the Onsite Materials have been purchased for or by Borrower;
(b) evidence that the Onsite Materials are insured as required hereunder; and
(c) evidence that the Onsite Materials are stored in an area on the Property for
which adequate security is provided against theft and vandalism.
Borrower acknowledges that this approval process may result in disbursement
delays and Borrower hereby consents to all such delays; provided, however, that
Lender shall use commercially reasonable efforts to respond to all requests for
approval within the time periods designated in this Agreement.
C. Periodic Disbursement of Construction Costs, Site Work Costs and
Offsite Costs. As construction progresses, the amount of the retention as
provided under any construction contract to which Borrower is a party (the
"Retention") shall be disbursed into the Account or to or for the benefit or
account of the Borrower, Property or Improvements upon Borrower's delivery to
Lender of (1) the applicable lien releases
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specified above in Paragraph B.8 of this EXHIBIT D, (2) the applicable
certificate specified above in Paragraph B.9 of this EXHIBIT D and (3) solely
with respect to the Construction Contract, a duly issued temporary certificate
of occupancy for the Improvements and completion of the Improvements in
accordance with the Plans and Specifications.
D. Partial Disbursements. No disbursement shall be made for a particular
Application for Payment unless all required supporting materials are included
for Items totaling at least sixty-five percent (65%) of the total amount of
funds requested thereunder. Subject to the foregoing, to the extent that an
unconditional lien release and waiver for an Item that was included in a prior
disbursement is not delivered to Lender prior to the date that Lender approves
the subsequent disbursement, Lender may withhold from the then current approved
disbursement an amount equal to one hundred fifty percent (150%) of the amount
for the Item(s) which had been previously funded. Thereafter, such withheld
amount shall be disbursed as part of the next ensuing disbursement upon Lender's
receipt of the missing unconditional lien release and waiver.
E. Timing of Disbursements. Lender shall exercise diligent and good faith
efforts to disburse funds for all approved Items in any Application for Payment
within the applicable Lender Payment Turnaround Period.
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