EXHIBIT 10.19
BUILDING LOAN AGREEMENT
Dated as of May 25, 2001
between
KEYBANK NATIONAL ASSOCIATION,
a national banking association having its principal
office at 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000
("Lender")
and
XXXXXX'X TRADING COMPANY, INC.,
an Indiana corporation, having its principal office at
0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000
("Borrower")
Article I
Particular Terms and Definitions
1.1 The following terms, as used herein, shall have the following
meanings:
"Aggregate Change Order Amount" -- Twenty Five Thousand Dollars
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($25,000.00).
"Borrower's Architects" -- The architects and/or engineers approved by
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Lender who are responsible for preparing the Plans and supervising construction
of the Improvements, and any successor engaged with Lender's consent.
"Change Orders" -- Any amendments or modifications to the Plans,
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General Contract or Subcontracts.
"Commitment Fee" -- Thirty Thousand Dollars ($30,000.00).
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"Completion Date" -- The date which is the earlier of (i) the date
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required under the terms of the Ground Lease or (ii) May 1, 2002.
"Construction Completion" -- Completion of construction of the Project,
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including, without limitation, all fixturing and all interior finish work
necessary for operation, maintenance and use of the Project, pursuant to the
Plans and in compliance with the requirements of the Loan Documents, the Ground
Lease and all applicable building and zoning codes, laws, ordinances and
approvals and shall be evidenced by (i) the issuance of a Certificate of
Occupancy for the Project from the appropriate Governmental Authorities, (ii)
the receipt of all required permits and licenses for the operation, use and
enjoyment of the Project, (iii) the issuance of a Certificate of Substantial
Completion on A.I.A. Document G704 by Borrower's Architect, (iv) the approval of
construction by Lender's inspecting architect, (v) full disbursement of the
Loan, or in the alternative, Borrower shall have waived in writing the right to
any further advances of the Loan, (vi) completion of construction of all
interior finishes of the Project and satisfaction of the Equity Requirement, and
(vii) commencement by Borrower of the operation of its business within the
Project.
"Construction Loan Checking Account" -- A separate non-interest bearing
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checking account with Lender which shall not be drawn upon except to pay Hard
Costs and Soft Costs approved by Lender.
"Debt" -- All of Borrower's liabilities.
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"Draw Request" -- A statement by Borrower on AIA Form G702/703 or other
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form acceptable to Lender and executed by Borrower's Requisition Agent setting
forth the amount of the Loan advance requested in each instance and including:
(a) lien waivers (in the form of Exhibit "C" attached hereto and
incorporated herein) from the General Contractor for all work
performed through the date of the Draw Request ("Lien Waivers");
(b) Lien Waivers from all Subcontractors for all work performed
through the date of the immediately preceding Draw Request;
(c) proof of payment of all Soft Costs covered by the immediately
preceding Draw Request; and
(d) bills or invoices for all Soft Costs covered by the Draw
Request.
"Equity Requirement" -- The requirement set forth in Section 7.1 of
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this Agreement that Borrower contribute equity to the Project in an amount
sufficient to cause Construction Completion.
"Financial Statements" -- Statements of the assets, liabilities (direct
----------------------
or contingent), income, expenses and cash flow of Borrower, as required by the
Mortgage.
"General Contractor"; "General Contract" -- Any general contractor
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engaged by Borrower and approved by Lender under any General Contract; any
contract (together with all riders, addenda and other instruments referred to
therein as "Contract Documents") between Borrower and the General Contractor
which requires the General Contractor to provide, or supervise or manage the
procurement of, substantially all labor and materials needed for completion of
the Improvements.
"Governmental Authorities" -- The United States, the state in which the
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Premises are located and any political subdivision, agency, department,
commission, board, bureau or instrumentality of either of them, including any
local authorities, which exercises jurisdiction over the Premises or the
Improvements.
"Ground Lease" -- That certain Lease dated August 30, 2000, by and
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between Ground Lessor and Borrower which is evidenced by that certain Memorandum
of Shopping Center Lease Agreement recorded on November 17, 2000, in Liber 9389
of Deeds at Page 0044, with the Monroe County, New York, Clerk's Office.
"Ground Lessor" - The Marketplace, a New York limited partnership, and
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its successors and assigns with respect to the Ground Lease.
"Hard Costs" -- The aggregate costs of all labor, materials, equipment,
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fixtures and furnishings necessary for completion of the Improvements.
"Improvements"; "Project" -- The improvements to be constructed by
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Borrower on the Premises pursuant to the terms and conditions of this Agreement,
which improvements shall consist of the construction of a 84,000 square foot
Xxxxxx'x Trading Company Store, including, without limitation, all fixturing and
finish work necessary for full operation and use of the same.
"Initial Advance" -- The first advance of Loan proceeds to be made
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hereunder.
"Leases" -- Any leases for space of the rentable area of the
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Improvements.
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"Loan" -- The loan to be advanced by Lender to Borrower pursuant to the
------
terms and conditions of this Agreement.
"Loan Amount" -- Six Million Dollars ($6,000,000.00).
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"Loan Budget Amounts" -- The portion of the Loan Amount set forth in
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the Project Budget to be advanced for each line item and category of Hard Costs
and Soft Costs.
"Mortgage" -- That certain Mortgage, Assignment of Rents and Security
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Agreement to be made by Borrower to Lender to secure the Note and any sums in
addition to the Loan Amount advanced by Lender for completion of the
Improvements.
"Mortgaged Property" -- The Premises and other property constituting
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the "Mortgaged Property," as said quoted term is defined in the Mortgage.
"Note" -- That certain Mortgage Note for a principal sum equal to the
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Loan Amount to be made by Borrower to Lender to evidence the Loan.
"Plans" -- All final drawings, plans and specifications prepared by
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Borrower, Borrower's Architects, the General Contractor or Subcontractors, and
approved by Lender, which describe and show the labor, materials, equipment,
fixtures and furnishings necessary for the construction of the Improvements,
including all amendments and modifications thereof made by Change Orders which
have been approved by Lender, or, if not approved by Lender, which are to be
paid for with funds other than proceeds of the Loan and which do not materially
change the character of the Improvements (and also showing minimum grade of
finishes and furnishings for all areas of the Improvements to be leased or sold
in ready-for-occupancy conditions).
"Prime Leases" - Collectively: (i) that certain Lease dated May 7,
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1968, by and between Hylan Enterprises, Inc., as successor to Hylan Flying
Services, Inc., as lessor, and Ground Lessor, as successor to Miracle Mile
Associates, as lessee, a Memorandum of which was recorded in the Monroe County
Clerk's Office in Liber 4130 of Deeds at Page 225, and modified in Liber 4733 of
Deeds, at Page 181, and in Liber 5951 of Deeds, at Page 30; and (ii) that
certain Lease dated October 2, 1974 by and between Xxxxxx Xxx Rueckwald and
Chase Manhattan Bank, formerly known as Chase Lincoln First Bank, N.A.,
Co-Trustees for the benefit of the University of Rochester, The Allendale
Columbia School, Inc. and the Rochester Institute of Technology under Paragraph
Eighth of the Will of Xxxxxxx X. Xxxxx, as successors to Xxxx Xxxxxx and Xxx
Xxxxx, as lessor, and Ground Lessor, as successor to Miracle Mile Associates, as
tenant, a Memorandum of which is recorded in the Monroe County Clerk's Office in
Liber 4733 of Deeds at Page 174.
"Prime Lessors"- Collectively, Hylan Enterprises, Inc., and Xxxxxx Xxx
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Rueckwald and Chase Manhattan Bank, formerly known as Chase Lincoln First Bank,
N.A., Co-Trustees for the benefit of the University of Rochester, The Allendale
Columbia School, Inc. and the Rochester
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Institute of Technology under Paragraph Eighth of the Will of Xxxxxxx X. Xxxxx,
and their successors and assigns with respect to the Prime Leases.
"Premises" -- The real property described on Exhibit "A" to the
----------
Mortgage and Exhibit "E" attached hereto, upon all or part of which the
Improvements are to be constructed.
"Project Budget" -- The statement attached hereto as Exhibit "A",
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setting forth, by line item and category, the Hard Costs and Soft Costs of
completion of the Improvements.
"Requisition Agent" -- Xxxxxx X. Xxxxx who is hereby authorized by
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Borrower to execute and deliver each Draw Request.
"Retainage Percentage" -- Ten percent (10%) to be reduced to five
----------------------
percent (5%) upon substantial completion of the Project, provided (i)
substantial completion is achieved within the contract period specified within
the General Contact and (ii) the General Contractor has executed a lien waiver
for all work through substantial completion.
"Retained Amounts" -- The greater of the Retainage Percentage of the
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Hard Costs or the actual retained amounts specified on the Draw Request.
"Single Change Order Amount" -- Five Thousand Dollars ($5,000.00).
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"Soft Costs" -- All costs of acquisition of the Premises and completion
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of the Improvements other than Hard Costs, including, without limitation,
architects' and attorneys' fees, ground rents, interest, real estate taxes,
survey costs and insurance premiums.
"Subcontractor"; "Subcontract" -- Any subcontractor or supplier engaged
------------------------------
by the General Contractor and any contractor other than the General Contractor
or supplier engaged by Borrower, under one or more contracts or work orders; any
such contract or work order.
"Tangible Net Worth" - Borrower's total assets excluding all intangible
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assets (e.g. goodwill, trademarks, patents, copyrights, organizational expenses,
and similar intangible items, but including leaseholds and leasehold
improvements) less total Debt.
"Title Insurer" -- The issuer(s), approved by Lender, of the title
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insurance policy or policies insuring the Mortgage.
Article II
Loan Advances
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2.1 Subject to the provisions of this Agreement, Lender will advance and
Borrower will accept the Loan Amount in installments as follows:
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The Initial Advance will be made upon the satisfaction of the
applicable conditions set forth in Article III hereof, and all
subsequent advances shall be made monthly thereafter, upon
satisfaction of the applicable conditions set forth in Article IV
hereof, in amounts which shall be equal to the aggregate of the Hard
Costs and Soft Costs incurred by Borrower through the end of the
period covered by the Draw Request less:
(a) the Retained Amounts; and
(b) the total of the Loan advances theretofore made; and, at the
---
election of Lender, less any combination of the following further
----
amounts:
(c) all or a portion of the amount by which any Hard Costs or
Soft Costs are or are reasonably estimated by Lender to be greater
than the respective Loan Budget Amounts for such costs; and
(d) any costs covered by the Draw Request not approved, certified
or verified as provided in Section 2.2 hereof, any Soft Costs covered
by a previous Draw Request for which proof of payment has not been
received by Lender, and any Hard Costs covered by a previous Draw
Request for which Lien Waivers have not been received by Lender.
2.2 Hard Costs are to be certified by the General Contractor. Verification
of the monthly progress and Hard Costs and Soft Costs which have been incurred
by Borrower shall be subject to the reasonable approval and verification by
Lender. Lender reserves the right to utilize its own in-house engineers,
architects and inspectors for purposes of such inspections, verifications and
approvals, and to engage the services of independent contractors, engineers,
architects or inspectors where Lender so desires, and Borrower agrees to assume
and pay all costs, including, without limitation, fees and travel expenses,
associated with each engineer, architect, contractor and inspector, in-house and
independent.
2.3 All advances to Borrower are to be made at Lender's principal office or
at such other place as Lender may designate and shall be deposited in the
Construction Loan Checking Account. Draw Requests shall be received by Lender at
least five (5) business days prior to the date of the requested advance. Lender
may, at Lender's sole discretion and at Borrower's expense, make any or all
advances through the Title Insurer, in which case interest shall accrue to
Lender from the time such funds are deposited with the Title Insurer.
2.4 Retained Amounts not advanced pursuant to Section 2.1 hereof during the
course of construction of the Improvements shall be advanced upon the
satisfaction of the conditions set forth in Section 4.2 hereof. Loan Budget
Amounts for Soft Costs not advanced prior to completion of construction of the
Improvements shall be advanced until exhausted, not more frequently than once a
month, for Soft Costs as incurred after such completion.
2.5 Lender shall not make Loan advances for building materials or
furnishings which are stored but not yet affixed to or incorporated into the
Improvements.
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2.6 Lender may, in its sole discretion, accelerate all or any portion of
the amounts to be advanced hereunder without regard to Borrower's satisfaction
of the conditions to its entitlement to Loan proceeds and no person dealing with
Borrower or the General Contractor or any other person shall have standing to
demand any different performance from Lender.
2.7 If at any time the undisbursed balance of the Loan Budget Amount for
any line item or category of cost shown on the Project Budget is, in Lender's
reasonable judgment, excessive, the excess may be reallocated to any other Loan
Budget Amount balance which Lender reasonably deems to be insufficient, and if
Lender determines all such other line items or cost categories sufficient,
Lender shall reallocate such savings to the General Contingency line item.
2.8 A drawing under any letter of credit which Lender has issued or
hereafter issues in connection with the Premises or Improvements, irrespective
of the account party thereunder, shall constitute an advance of Loan proceeds
under this Agreement and the amount thereof shall be evidenced and secured,
respectively, by the Note and Mortgage. The issuance of any such letter of
credit shall effect a reduction, by the amount and during the existence thereof,
of available Loan proceeds and Lender, in its reasonable discretion, shall
allocate such reduction to the Loan Budget Amounts which it deems most
appropriate.
Article III
Conditions Precedent to Lender's Obligation to Make
the Initial Advance
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3.1 Lender shall not be obligated to make the Initial Advance until the
following conditions shall have been satisfied:
(a) Lender shall have received and approved the items specified in
Section 3.2 below;
(b) The representations and warranties made in Article V hereof shall
be true and correct on and as of the date of the Initial Advance with the
same effect as if made on such date;
(c) Existing improvements on the Premises, if any, shall not have been
materially injured or damaged by fire or other casualty unless Lender shall
have received insurance proceeds sufficient in the reasonable judgment of
Lender to effect the satisfactory restoration of the said improvements and
to permit completion of said improvements prior to the Completion Date
pursuant to terms of disbursement satisfactory to Lender; and
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(d) There shall exist no Event of Default which is continuing, as
therein defined, under the Note or Mortgage, or any event or state of facts
which after notice or the passage of time, or both, could give rise to such
an Event of Default.
3.2 The items to be received and approved by Lender prior to the Initial
Advance shall be:
(a) The Commitment Fee, to be retained by Lender whether or not any
advances are made under this Agreement;
(b) The executed Note, Mortgage, Borrower's Closing Certificate, this
Agreement and UCC-1 Financing Statements relating to the Mortgaged Property
and any other documents to be executed in connection with, or property
given as security for the Loan;
(c) A paid title insurance policy, in the amount of the Note, in form
approved by Lender, issued by the Title Insurer which shall insure the
Mortgage to be a valid lien on Borrower's leasehold interest in the
Premises pursuant to the Ground Lease free and clear of all defects and
encumbrances except those previously approved by Lender, and shall contain:
(i) full coverage against mechanics' liens (filed and inchoate);
(ii) a reference to the survey but no survey exceptions except
those theretofore approved by Lender; and
(iii) a pending disbursements clause in the form of Exhibit "B"
hereto;
(d) A survey (current to within thirty (30) days of the Initial
Advance) of the Premises certified to Lender and the Title Insurer;
(e) The policies of hazard insurance required by the Mortgage
(together with evidence of the payment of the premiums therefor) which
policies will contain an endorsement specifically providing that, in the
case of any damage, all insurance proceeds will be paid to Lender in
accordance with the terms and conditions of the Mortgage;
(f) Copies of the following documents with respect to Borrower:
(i) a good-standing certificate from the state of its
incorporation and from the state in which the Premises are located;
(ii) certified copies of the articles of incorporation and
by-laws or code of regulations;
(iii) resolutions, certified by the corporate secretary, of the
shareholders or directors of the corporation authorizing the
consummation of the transactions contemplated hereby; and
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(iv) a certificate of the corporate secretary as to the
incumbency of the officers executing this Agreement or any of the
other documents (as applicable) required hereby;
(g) An opinion of Borrower's counsel, which opinion shall be in form
and content satisfactory to Lender;
(h) Current Financial Statements and such other financial data as
Lender shall require;
(i) A copy of the Ground Lease, which has been approved by Lender, and
an Estoppel Certificate from the lessor under the Ground Lease which is
satisfactory to Lender in its sole discretion;
(j) An Agreement Regarding Rights Under Non-Disturbance Agreement, in
form approved by Lender, from each Prime Lessor;
(k) A Recognition and Non-Disturbance Agreement in form approved by
Lender, and Estoppel Certificates from the holders of any mortgages on the
interests of Ground Lessor or Prime Lessors in the Premises;
(l) A copy of the following documents, each of which shall be in form
and content acceptable to Lender: (i) General Contract; (ii) all
Subcontracts requested by Lender; (iii) Borrower's agreement with
Borrower's Architect; and (iv) any management agreement or franchise
agreement relating to the Premises and Improvements;
(m) Assignments of all contracts from Borrower to Lender and
acknowledgments of and consents to such assignments of all contracts
required to be provided to Lender as set forth in subsection (j) of this
Section;
(n) An appraisal of the Premises and Improvements;
(o) A progress schedule or chart showing the interval of time over
which each item of Hard Costs is projected to be incurred or paid;
(p) The Project Budget;
(q) A Draw Request for the Initial Advance;
(r) The Plans;
(s) Evidence satisfactory to Lender, to the effect that: (i) the Plans
have been approved by Governmental Authorities, the Ground Lessor, if
required by the Ground Lease and the Prime Lessor, if required by the Prime
Leases; (ii) the Improvements as shown by the Plans will comply with
applicable zoning ordinances and regulations; (iii) a General Contract
and/or Subcontracts are in effect which satisfactorily provide for the
construction of the Improvements; (iv) all roads and utilities necessary
for the full utilization of the Improvements for their intended purposes
have been completed or the presently installed and proposed roads and
utilities will be sufficient for the full
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utilization of the Improvements for their intended purposes; and (v) the
construction of the Improvements theretofore performed, if any, was
performed in accordance with the Plans;
(t) Copies of all inspection and test records and reports made by or
for Borrower's Architects;
(u) Copies of the applicable zoning resolutions, ordinances and map
(marked to show the location of the Premises), certified by an appropriate
official to be complete and accurate;
(v) Copies of any and all authorizations including plot plan and
subdivision approvals, zoning variances, sewer, building and other permits
required by Governmental Authorities for the construction, use, occupancy
and operation of the Mortgaged Property or the Improvements for the
purposes contemplated by the Plans in accordance with all applicable
building, environmental, ecological, landmark, subdivision and zoning
codes, laws and regulations;
(w) Letters from local utility companies or Governmental Authorities
stating that gas, electric power, sanitary and storm sewer and water
facilities and any other necessary utilities will be available to service
the Premises in adequate capacities upon completion of construction of the
Improvements, and that the same shall enter the Premises through public
rights-of-way or through recorded private easements reviewed and approved
by Lender;
(x) A site plan (showing all necessary approvals, utility connections
and site improvements);
(y) An environmental site assessment; and
(z) An original Verified Statement Under Oath Pursuant to Section 22
of Lien Law of the State of New York attached hereto as Exhibit "D" and
incorporated herein by this reference.
Article IV
Conditions Precedent to Lender's Obligation to
Make Advances After the Initial Advance
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4.1 Lender's obligation to make Loan advances after the Initial Advance
shall be subject to the satisfaction of the following conditions:
(a) Any requirement of Article III that has not been satisfied or
waived in writing by Lender must be satisfied;
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(b) Lender shall have received a Draw Request for the advance;
(c) Lender shall have received a continuation report or endorsement to
the title policy insuring the Mortgage to the date of such advance, in the
form approved by Lender and setting forth no additional exceptions except
those approved by Lender;
(d) For any advance immediately subsequent to the completion of the
foundation of any building, Lender shall have received a survey certified
to Lender and the Title Insurer, indicating the location of each such
foundation, and updated, with respect to all relevant requirements and
information, to within ten (10) days of the advance;
(e) The representations and warranties made in Article V hereof shall
be true and correct on and as of the date of the advance with the same
effect as if made on such date;
(f) There shall exist no Event of Default which shall be continuing,
as therein defined under the Note or Mortgage, or any event or state of
facts which after notice or the passage of time, or both, could give rise
to such an Event of Default; and
(g) Existing improvements on the Premises, if any, shall not have been
materially injured or damaged by fire or other casualty unless Lender shall
have received insurance proceeds sufficient in the reasonable judgment of
Lender to effect the satisfactory restoration of the said improvements and
to permit completion of said improvements prior to the Completion Date
pursuant to terms of disbursement satisfactory to Lender.
4.2 In the case of the final Hard Costs advance as provided in Section 2.4
hereof, Lender shall also have received and approved:
(a) Evidence satisfactory to Lender to the effect that construction of
the Improvements has been completed and any necessary utilities and roads
have been finished and made available for use, in accordance with the
Plans, and that all approvals have been received from all Governmental
Authorities of the Improvements in their entirety for permanent occupancy,
and of the contemplated uses thereof, to the extent any such approval is a
condition of the lawful use and occupancy thereof;
(b) A current, final, "as built" survey of the Premises, certified to
Lender and the Title Insurer, showing the completed Improvements; and
(c) Certificate of substantial completion from Borrower's Architects.
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Article V
Borrower's Representations, Warranties and Covenants
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5.1 Borrower represents and warrants that:
(a) Borrower is a corporation and is duly organized, validly existing
and in good standing under the laws of the state of its incorporation, has
stock outstanding which has been duly and validly issued, is qualified to
do business and is in good standing in the state in which the Premises are
located with full power and authority to consummate the transactions
contemplated hereby;
(b) The Plans are satisfactory to Borrower, have been reviewed and
approved by the General Contractor, the Ground Lessor, if required by the
Ground Lease, the Prime Lessors, if required by the Prime Leases,
Borrower's Architects and, to the extent required by applicable law or any
effective restrictive covenant, by all Governmental Authorities and the
beneficiary of any such covenant; all construction, if any, already
performed on the Improvements has been performed on the Premises in
accordance with the Plans approved by the persons named above and with any
restrictive covenants applicable thereto; there are no structural defects
in the Improvements or violations of any requirement of any Governmental
Authorities with respect thereto; the planned use of the Improvements
complies with applicable zoning ordinances, regulations and restrictive
covenants affecting the Premises as well as all environmental, ecological,
landmark and other applicable laws and regulations; and all requirements
for such use have been satisfied;
(c) Financial Statements have been heretofore delivered to Lender
which are true, correct and current in all respects and which fairly
present the respective financial conditions of the subjects thereof as of
the respective dates thereof; no material adverse change has occurred in
the financial conditions reflected therein since the respective dates
thereof and no borrowings (other than the Loan) which might give rise to a
lien or claim against the Mortgaged Property or Loan proceeds have been
made by Borrower or others since the date thereof;
(d) There are no actions, suits or proceedings pending, or to the
knowledge of Borrower, threatened against or affecting Borrower, the
Premises, the validity or enforceability of the Mortgage or the priority of
the lien thereof at law, in equity or before or by any Governmental
Authorities; Borrower is not in default with respect to any order, writ,
injunction, decree or demand of any court or Governmental Authorities;
(e) The consummation of the transactions contemplated hereby and
performance of this Agreement, the Note and Mortgage have not and will not
result in any breach of, or constitute a default under, any mortgage, deed
of trust, lease, bank loan or credit agreement, corporate charter, by-laws,
partnership agreement or other instrument to which Borrower is a party or
by which any of them may be bound or affected;
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(f) All utility services necessary for the construction of the
Improvements and the operation thereof for their intended purposes are
available in adequate capacities at the boundaries of the Premises,
including water supply, storm and sanitary sewer, gas, electric power and
telephone facilities, and all of such utility services enter the Premises
through public rights-of-way or through recorded private easements reviewed
and approved by Lender;
(g) Each Draw Request presented to Lender, and the receipt of the
funds requested thereby, shall constitute an affirmation that the
representations and warranties contained in Sections 5.1 and 5.2 remain
true and correct as of the respective dates thereof;
(h) Borrower has entered into no contract or arrangement of any kind
the performance of which by the other party thereto would give rise to a
lien on the Mortgaged Property except for its arrangements with Borrower's
Architects, the General Contractor, and Subcontractors who have been paid
in full and have provided Lien Waivers for all payment due under said
arrangements as of the end of the period covered by the last Draw Request;
(i) All roads necessary for the full utilization of the Improvements
for their intended purposes have either been completed or the necessary
rights-of-way therefor have been acquired by appropriate Governmental
Authorities or dedicated to public use and accepted by said Governmental
Authorities, and all necessary steps have been taken by Borrower and said
Governmental Authorities to assure the complete construction and
installation thereof no later than the Completion Date or any earlier date
required by any law, order or regulation, or any Lease;
(j) There exists no Event of Default, as therein defined, under the
Note or Mortgage, and no event or state of facts exists which after notice
or the passage of time, or both, could give rise to an Event of Default
thereunder;
(k) The approved Plans referred to in subsection (b) of this Section
are the same as the filed plans referred to in the building permits for the
Improvements;
(l) Borrower advised the Title Insurer in writing prior to the
issuance of the title policy insuring the Mortgage whether any survey,
soils-testing, site development, excavation or other work related to
construction of the Improvements was begun or done before the Mortgage was
recorded;
(m) No assessments (except installments not yet due and payable) of
any nature will remain unpaid after the last Hard Costs advance, including,
without limitation, assessments relating to streets, roads, entrances,
waterlines, sanitary and storm sewers, gaslines and all other utilities
including, without limitation, acreage fees and trunk sewers;
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(n) Borrower shall indemnify and hold Lender harmless from all claims
of every kind, of every person, including, without limitation, employees of
Borrower, contractors and employees of contractors, tenants of Borrower,
subtenants or concessionaires of any tenants, and employees and business
invitees of any tenants, which claims arise from or out of the
construction, use, occupancy or possession of the Improvements or the
Mortgaged Property;
(o) The Mortgaged Property has not been damaged or injured as a result
of any fire, explosion, accident, flood, gasoline or chemical leakage or
other casualty; and
(p) General Contractor and all Subcontractors have performed all work
in connection with the Project for which they have been paid and General
Contractor and all Subcontractors have been paid for all work in connection
with the Project performed through the cutoff date of the immediately
preceding Draw Request.
5.2 Borrower covenants and agrees with Lender that Borrower will:
(a) Promptly comply with all laws, ordinances, orders, rules, statutes
and regulations of Governmental Authorities and promptly furnish Lender
with reports of any official searches made by Governmental Authorities and
any claims of violations thereof;
(b) Permit Lender and its representatives to enter upon the Premises,
inspect the Improvements and all materials to be used in the construction
thereof and examine all detailed plans and shop drawings which are or may
be kept at the construction site; Borrower will cooperate and cause the
General Contractor and Subcontractors to cooperate with Lender to enable
Lender to perform its inspections hereunder;
(c) Pay all Hard Costs and Soft Costs and expenses required for
completion of the Improvements and the satisfaction of the conditions of
this Agreement, including, without limitation:
(i) all document and stamp taxes, recording and filing expenses
and fees and commissions lawfully due to brokers in connection with
the transactions contemplated hereby;
(ii) the fees and expenses of Lender's counsel, in connection
with the preparation for and consummation of the transactions
contemplated hereby, and for any services of such parties which may be
required in addition to those normally and reasonably contemplated
hereby; and
(iii) any taxes, insurance premiums, liens, security interests or
other claims or charges against the Mortgaged Property;
(d) Submit a Draw Request for the Initial Advance within thirty (30)
days after the date hereof and subsequent advances on a monthly basis
thereafter; cause the construction of the Project to be prosecuted with
diligence and continuity in a good and workmanlike manner in accordance
with the Plans; use only materials, fixtures,
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furnishings and equipment in connection with construction of the
Improvements that are not used or obsolete; and complete construction of
the Improvements, and the installation of all necessary roads and
utilities, in accordance with the Plans, on or before the Completion Date,
free and clear of defects and liens or claims for liens for material
supplied or labor or services performed in connection with the construction
of the Improvements;
(e) Receive and deposit in the Construction Loan Checking Account all
advances made hereunder; hold the same and the right to receive the same as
a trust fund for the purpose of paying only Hard Costs and Soft Costs;
(f) Indemnify Lender against claims of brokers arising by reason of
the execution hereof or the consummation of the transactions contemplated
hereby;
(g) Deliver to Lender copies of all contracts, bills of sale,
statements, receipted vouchers and agreements under which Borrower claims
title to any materials, fixtures or articles incorporated into the
Improvements or subject to the lien of the Mortgage, or under which
Borrower has incurred costs for which Borrower is entitled to a Loan
advance, and deliver to Lender such other data or documents in connection
with the Improvements as Lender may from time to time request;
(h) Upon demand of Lender, correct any defects (structural or
otherwise) in the Improvements or any departures from the Plans not
approved by Lender;
(i) Deliver to Lender a certified and correct copy of all Leases of
the Premises whether executed before or after the date hereof and keep all
of same in full force and effect in accordance with the covenants of
Borrower contained in the Mortgage;
(j) Not permit the performance of any work pursuant to any Change
Order until Lender: (i) shall have received a copy thereof; and (ii) in the
case of Change Orders which will result in (A) a change in the aggregate of
the contract prices for the construction of the Improvements in excess of
the Single Change Order Amount or which, together with the aggregate of
Change Orders theretofore executed by Borrower (excluding those approved by
Lender pursuant to this subsection) will result in a change in such prices
in excess of the Aggregate Change Order Amount unless such Change Orders
are paid for by funds other than Loan Proceeds, or (B) a material change in
the character of the Improvements, shall have given specific written
approval thereof; it being understood that approval of any Change Order
will not obligate Lender to increase or advance any Loan Budget Amount on
account of any such Change Order;
(k) Require covenants from the General Contractor to the same effect
as the covenant made by Borrower in the immediately preceding subsection;
and Borrower will provide in every General Contract that the General
Contractor will deliver to Lender upon request of Lender, copies of all
Subcontracts, Change Orders and any other contract, purchase order or
subcontract covering labor, materials, equipment or furnishings to or for
the Improvements, and the names of all persons with whom the General
Contractor
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has contracted or intends to contract for the construction of the
Improvements or for the furnishing of labor or materials therefor;
(l) Employ suitable means to protect from theft and vandalism all
portions of the Improvements and building materials stored on the Premises;
(m) Comply with all restrictions, covenants and easements affecting
the Premises or the Improvements and cause the satisfaction of all
conditions of this Agreement; and
(n) Borrower shall, in compliance with Section 13 of the Lien Law of
the State of New York, receive the advances made hereunder and will hold
the same as a trust fund to be applied first for the purpose of paying the
cost of any improvement, and shall apply the same first to the payment of
the cost of the improvement before using any part of the total of the same
for any other purpose.
5.3 Borrower covenants that the representations and warranties made by it
in Sections 5.1 and 5.2 hereof, will be continuously true and correct.
Article VI
General Conditions
6.1 The following conditions shall be applicable at all times during the
term of the Loan:
(a) Any advance by Lender of Loan proceeds hereunder made prior to or
without the fulfillment by Borrower of all of the conditions precedent
thereto, whether or not known to Lender, shall not constitute a waiver by
Lender of the requirement that all conditions, including the non-performed
conditions, shall be required with respect to all future advances;
(b) All documentation and proceedings deemed by Lender to be necessary
or required in connection with this Agreement and the documents relating
hereto shall be subject to the prior approval of, and satisfactory to,
Lender as to form and substance. In addition, the persons or parties
responsible for the execution and delivery of, and signatories to, all of
such documentation, shall be acceptable to, and subject to the approval of,
Lender;
(c) If at any time Lender notifies Borrower that, in Lender's
reasonable judgment, the undisbursed balance of the Loan (including
contingency) is insufficient to pay the remaining Hard Costs and Soft
Costs, Borrower shall either: (i) deposit with Lender an amount equal to
such deficiency which Lender may from time to time apply, or allow Borrower
to apply, to such Hard Costs and Soft Costs; or (ii) pay for such Hard
Costs and Soft Costs in the amount of such deficiency so that the amount of
the Loan which remains to be disbursed shall be sufficient to complete the
Improvements, and
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Borrower shall furnish Lender with such evidence thereof as Lender shall
require. Borrower hereby agrees that Lender shall have a lien on and
security interest in any sums deposited pursuant to clause (i) above and
that Borrower shall have no right to withdraw any such sums except for the
payment of the aforesaid Hard Costs and Soft Costs as approved by Lender.
Any such sums not used as provided in said clause (i) shall be released to
Borrower when and to the extent that Lender determines that the amount
thereof is more than the excess, if any, of the total remaining Hard Costs
and Soft Costs of completion of the Improvements over the undisbursed
balance of the Loan; provided, however, that should an Event of Default
occur under the Note or Mortgage, Lender may, at its option, apply such
amounts either to the costs of completion of the Improvements or to the
immediate reduction of outstanding principal and/or interest under the
Note;
(d) Upon the occurrence of any Event of Default under the Note or
Mortgage, Borrower does hereby irrevocably authorize Lender to advance any
undisbursed Loan proceeds directly to the General Contractor,
Subcontractors and other persons to pay for completion of the Improvements
but Lender is under no obligation to do so. No further direction or
authorization from Borrower shall be necessary to warrant such direct
advances and all such advances shall satisfy pro tanto the obligations of
Lender hereunder and shall be secured by the Mortgage as fully as if made
to Borrower regardless of the disposition thereof by the General
Contractor, any Subcontractor or other person;
(e) All conditions of the obligation of Lender to make advances
hereunder are imposed solely and exclusively for the benefit of Lender and
may be freely waived or modified in whole or in part by Lender at any time
if in its sole discretion it deems it advisable to do so, and no person
other than Borrower (provided, however, that all conditions have been
satisfied) shall have standing to require Lender to make any Loan advances
or to be a beneficiary of this Agreement or any advances to be made
hereunder. Any waiver or modification asserted by Borrower to have been
agreed to by Lender must be in writing and comply with the provisions of
subsection (h) of this Section;
(f) Borrower hereby irrevocably authorizes Lender to disburse proceeds
of the Loan to pay: (i) interest accrued on the Note as it comes due; (ii)
any and all commitment or loan fees; (iii) travel and inspection fees of
Lender; (iv) fees and expenses of Lender's counsel; and (v) to satisfy any
of the conditions of this Agreement; notwithstanding that Borrower may not
have requested disbursement of such amounts and whether or not Borrower may
be in default under the Note or Mortgage. Any such disbursements shall be
added to the outstanding principal balance of the Note and shall be secured
by the Mortgage. The authorization granted hereby shall not prevent
Borrower from paying interest, or satisfying said conditions, from its own
funds and shall in no event be construed so as to relieve Borrower from its
obligation to pay interest as and when due under the Note, or to satisfy
said conditions, or to obligate Lender to disburse Loan proceeds for the
payment of interest or the satisfaction of said conditions;
(g) All notices to be given hereunder shall be sufficient if given in
accordance with the provisions contained in Section 23 of the Mortgage;
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(h) No provisions of the Note, Mortgage, UCC-1 Financing Statements or
this Agreement may be changed, waived, discharged or terminated orally, by
telephone or by any other means except an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought;
(i) Except as herein provided, this Agreement shall be binding upon
and inure to the benefit of Borrower and Lender and their respective heirs,
personal representatives, successors and assigns. Notwithstanding the
foregoing, Borrower, without the prior written consent of Lender, which
consent may be withheld in Lender's sole discretion, may not assign,
transfer or set over to another, in whole or in part, all or any part of
its benefits, rights, duties and obligations hereunder, including, without
limitation, performance of and compliance with conditions hereof and the
right to receive the proceeds of current or future advances; (j) Borrower
acknowledges that Borrower has selected or will select all architects,
engineers, contractors, subcontractors, materialmen, and others furnishing
services or materials for the Improvements and that Lender shall have no
responsibility whatsoever for them or for any inspection reports or for the
quality of their materials or workmanship. It is understood that Lender's
sole function is that of lender and that the only consideration passing
from Lender to Borrower are the Loan proceeds in accordance with and
subject to the terms of this Agreement. Borrower shall have no right to
rely on any procedures required by Lender herein, such procedures being
solely for the benefit and protection of Lender; and
(k) This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
6.2 The cover page and the Exhibits annexed hereto are incorporated as a
part of this Agreement with the same effect as if set forth in the body hereof.
Article VII
Particular Provisions
7.1 Equity Requirement. Borrower shall be required to contribute equity to
-------------------
the Project in an amount sufficient to complete the Project based on the Project
Budget. Based on the current Project Budget, Borrower shall be required to
contribute Four Million Two Hundred Fifty-Eight Thousand Four Hundred Dollars
($4,258,400.00) in equity to the Project.
7.2 Financial Covenants. Borrower hereby covenants as follows:
--------------------
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a. Borrower shall maintain a minimum Tangible Net Worth of not less
than Forty Five Million Dollars ($45,000,000.00);
b. Borrower shall not carry mezzanine debt in excess of Fifty Million
Dollars ($50,000,000.00) plus accrued interest thereon;
c. Borrower shall provide Lender with evidence satisfactory to Lender,
in Lender's reasonable discretion, that Borrower has closed and, subject to
borrowing base availability, has available a line of credit in the amount
of One Hundred Sixty Million Dollars ($160,000,000.00) from Chase Manhattan
Bank under that certain Credit Agreement dated as of May 3, 2001, by and
among Borrower, The Chase Manhattan Bank and the lenders named therein; and
d. Borrower shall not allow the occurrence of a default by Borrower
under that certain Credit Agreement dated as of May 3, 2001, by and among
Borrower, The Chase Manhattan Bank and the lenders named therein, and
Borrower shall provide Lender with all financial reporting and compliance
certificates which it is required to produce under such Credit Agreement
simultaneously with its submission of the same under such Credit Agreement.
7.3 This Agreement shall be governed by and construed under the laws of the
State of New York.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written, the execution hereof by Borrower constituting: (a)
a certification by the party or parties executing on its behalf that the
representations and warranties made in Article V are true and correct as of the
date hereof and that each of them duly holds and is incumbent in the position
indicated under his name; and (b) the undertaking of said party or parties that
each Draw Request, whether or not personally made by any or all of them, shall
constitute the personal affirmation on the part of each of them that at the time
thereof said representations and warranties are true and correct.
KEYBANK NATIONAL ASSOCIATION XXXXXX'X TRADING COMPANY, INC.,
a national banking association an Indiana corporation
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
By:______________________________ By:______________________________
Closing Officer Treasurer
Its:_____________________________ Its:_____________________________
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EXHIBIT "A"
PROJECT BUDGET
EXHIBIT "B"
Pending disbursement of the full proceeds of the loan secured by the
mortgage set forth under Schedule A hereof, this policy insures only to the
extent of the amount actually disbursed, but increases as each disbursement is
made up to the face amount of the policy. However, if disbursements are made
which the holder of such mortgage was not obligated to make after holder's
receipt of a written notice of a lien or encumbrance or of work or labor
performed or to be performed or of machinery, material or fuel furnished or to
be furnished, said mortgage, to the extent of said disbursements, shall be
subordinate to the lien or encumbrance specified in such notice or to a valid
mechanic's lien for the work or labor actually performed or machinery, material
or fuel actually furnished as specified in such notice.
