DEVELOPMENT FINANCING AGREEMENT
THIS AGREEMENT, made and entered into effective as of this
11th day of August, 1998, by and between Americana Dining Corp.
("Lessee"), whose address is 00 Xxxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx 00000-0000, and Net Lease Income & Growth Fund 84-A
Limited Partnership and AEI Net Lease Income & Growth Fund XX
Limited Partnership (collectively "Lessor"), whose address is
Xxxxx 0000, Xxxxx Xxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxx 00000.
W I T N E S S E T H, that:
WHEREAS, Lessee is contemplating building on the premises
described in Exhibit "A" attached hereto the following
Improvements :
Remodeling of an approximately 10,962 square foot
building and improvements to be used as a Champps Restaurant.
WHEREAS, Lessee has made application to Lessor for development
financing to defray the costs of constructing such Improvements;
WHEREAS, Lessor's Assignor has issued to Lessee its
Development Financing and Leasing Commitment to advance funds in
the amount hereinafter specified, subject to compliance with the
terms and conditions of this Development Financing Agreement and
the Net Lease Agreement (the "Lease") of even date herewith;
NOW, THEREFORE, in consideration of entering into the Lease
and other good and valuable consideration, the receipt of which
is hereby acknowledged by the parties hereto, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following meanings:
1. "Application" shall mean Lessee's application to the
Lessor for the Development Financing the terms and conditions
of which are incorporated herein by reference.
2. "Architect's Contract" shall mean Lessee's contract
with the Project Architect.
3. "Commitment" shall mean Lessor's Commitment to Lessee
agreeing to provide the Development Financing. (The
"Development Financing and Leasing Commitment" dated of even
date herewith.)
4. "Completion Date" shall mean midnight, June 1, 1999,
subject to Force Majeure, as defined herein.
5. "Construction Costs" shall mean land costs, all
costs paid to construct and complete the Improvements, as
specified on Exhibit "B" attached hereto and made a part
hereof.
6. "Construction Contracts" shall mean the contracts
between Lessee and Contractors for the furnishing of labor,
services or materials to the Leased Premises in connection
with the construction of the Improvements.
7. "Contractors" shall mean those firms directly
engaged by Lessee to construct the Improvements, whether one
or more.
8. "Contract Documents" shall mean the Project
Architect's Contract, Plans and Specifications and the
contract with the Contractor.
9. "Development Financing" shall mean the funds to be
made available pursuant to the Commitment and not to exceed
the lesser of the Construction Costs or the maximum loan
amount of Three Million Five Hundred Eleven Thousand Dollars
($3,511,000) as specified in the Commitment.
10. "Development Financing and Carrying Charges" shall
mean all fees, taxes and charges incurred under the
Development Financing and in the construction of the
Improvements including, but not limited to, non-refundable
commitment fees; interest charges, service and inspection
fees, attorney's fees, title insurance fees and charges,
recording fees and insurance premiums.
11. "Development Financing Documents" shall mean this
Agreement, the Lease, Assignment of Architects and
Construction Contracts, Guarantees, and such other documents
given to the Lessor as security for the Development
Financing.
12. "LTIC-CDD" shall mean Lawyers Title Insurance
Corporation, Construction Disbursement Department, the
nationally recognized title insurer, or Lessor's in-house
designee, to be LTIC-CDD under the Development Financing
Disbursement Agreement executed by and between the parties of
even date herewith.
13. "Final Disbursement Date" shall mean the date of
the final disbursement of the Development Financing provided
hereunder.
14. "Improvements" shall mean the structures and other
improvements to be constructed on the Leased Premises in
accordance with the Plans and Specifications.
15. "Initial Disbursed Funds" shall mean those funds
disbursed on the Closing Date for land acquisition and
related soft costs upon Lessor's acquisition of the Leased
Premises.
16. "Inspecting Architect" shall mean the architect, if
any, hired by Lessor to perform inspections of the premises.
An Inspecting Architect may only be engaged by Lessor in the
event of a default relating to construction of the
Improvements under the Development Financing Documents.
17. "Leased Premises" shall mean the real property
described in the Exhibit "A" attached to this Agreement,
together with all Improvements, equipment and fixtures
thereon.
18. "Lessee Equity" shall mean the final Construction
Costs less the amount of the Development Financing.
19. "Plans and Specifications" shall mean the plans and
specifications prepared by the Project Architect who shall be
licensed in the jurisdiction of the Leased Premises and
selected by Lessee.
20. "Project" shall mean the construction of the
Improvements on the Leased Premises.
21. "Project Architect" shall mean the architect
retained by Lessee to design and supervise construction of
the Improvements.
22. "Rental Modification Date" shall mean a date one
hundred and eighty days (180) from the date hereof.
23. "Sub-Contractors" shall mean those persons
furnishing labor or materials for the Project pursuant to the
Sub-Contracts.
24. "Sub-Contracts" shall mean the contracts between
the Contractor and its materialmen and mechanics in the
furnishing of labor or materials for the Project.
25. "Title" shall mean Lawyers Title Insurance
Corporation issuing the Lessor's fee owner's title insurance
policy.
ARTICLE II
THE DEVELOPMENT FINANCING
Subject to compliance with the provisions of this Agreement,
Lessor agrees to advance to Lessee, and Lessee agrees to
request from Lessor, the Development Financing. The
Development Financing shall be advanced in stages by Lessor
to LTIC-CDD and disbursed by LTIC-CDD pursuant to the
provisions of Article VIII hereof. The Development
Financing, or so much thereof as has been advanced hereunder,
shall bear interest at the rate and shall be repaid in
accordance with the terms hereof and the Lease. The proceeds
of the Development Financing shall be used exclusively for
the purposes of defraying Construction Costs.
ARTICLE III
N/A
ARTICLE IV
CONSTRUCTION OF IMPROVEMENTS
Lessee agrees to commence construction of the Improvements
within thirty (30) days from the date of this Agreement.
After commencement of construction of any Improvements,
Lessee agrees to diligently pursue said construction to
completion, and to supply such moneys and to perform such
duties as may be necessary to complete the construction of
said Improvements pursuant to the Plans and Specifications
and in full compliance with all terms and conditions of this
Agreement and the Development Financing Documents, all of
which shall be accomplished on or before the Completion Date,
subject to Force Majeure and without liens, claims or
assessments (actual or contingent) asserted against the
Leased Premises for any material, labor or other items
furnished in connection therewith, subject to Lessee's right
to contest such liens, claims, or assessments provided the
same are removed as a lien upon the Leased Premises prior to
foreclosure of such lien, and all in full compliance with all
construction, use, building, zoning and other similar
requirements of any pertinent governmental jurisdiction.
Lessee will provide to Lessor, upon request, evidence of
satisfactory compliance with all the above requirements.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE LESSEE
Lessee hereby represents and warrants to the Lessor, which
representations and warranties shall be deemed to be restated
by Lessee each time Lessor makes an advance of the
Development Financing, that:
1. VALIDITY OF DEVELOPMENT FINANCING DOCUMENTS - The Development
Financing Documents are in all respects legal, valid and
binding according to their terms.
2. NO PRIOR LIEN ON FIXTURES - No mortgage, xxxx of sale,
security agreement, financing statement, or other title
retention agreement (except those executed in favor of
Lessor) has been, or will be, executed with respect to any
fixture (except Lessee's trade fixtures not financed with
this Development Financing) used in conjunction with the
construction, operation or maintenance of the improvements.
3. CONFLICTING TRANSACTION OF LESSEE - The consummation of the
transactions hereby contemplated and the performance of the
obligations of Lessee under and by virtue of the Development
Financing Documents will not result in any breach of, or
constitute a default under, any mortgage, lease, bank loan or
credit agreement, corporate charter, by-laws, partnership
agreement, or other instrument to which Lessee is a party or
by which it may be bound or affected, the breach of which
would materially affect Lessee's ability to perform its
obligations hereunder.
4. PENDING LITIGATION - There are no actions, suits or
proceedings pending, or to the knowledge of Lessee
threatened, against or affecting it or the Leased Premises,
or involving the validity or enforceability of any of the
Development Financing Documents, at law or in equity, or
before or by any governmental authority, except actions,
suits and proceedings that are fully covered by insurance or
which, if adversely determined would not substantially impair
the ability of Lessee to perform each and every one of its
obligations under and by virtue of the Development Financing
Documents; and to the Lessee's knowledge it is not in default
with respect to any order, writ, injunction, decree or demand
of any court or any governmental authority.
5. VIOLATIONS OF GOVERNMENTAL LAW, ORDINANCES OR REGULATIONS -
To the best knowledge of Lessee, there are no violations or
notices of violations of any federal or state law or
municipal ordinance or order or requirement of the State in
which the Leased Premises are located or any municipal
department or other governmental authority having
jurisdiction affecting the Leased Premises, which violations
in any way have a material adverse affect on the Leased
Premises and which remain uncured after notice by such
governmental authority or department (if notice is required)
and the expiration of the time within which Lessee may cure
such violation, or if no time limitation is specified, within
a reasonable time after notice to cure such violation .
6. COMPLIANCE WITH ZONING ORDINANCES AND SIMILAR LAWS - To the
best knowledge of Lessee, the Plans and Specifications and
construction pursuant thereto and the use of the Leased
Premises contemplated thereby comply and will comply with all
present governmental laws and regulations and requirements,
zoning ordinances, standards, and regulations of all
governmental bodies exercising jurisdiction over the Leased
Premises. Lessee agrees to provide the Project Architect's
certification to such effect prior to the funding of the
first disbursement under the Development Financing.
7. LESSEE'S STATUS AND AUTHORITY - If the Lessee be a
corporation, limited liability company, trust or a
partnership, Lessee warrants and represents that (i) it is
duly organized, existing and in good standing under the laws
of the state in which it is incorporated or created; (ii) it
is duly qualified to do business and is in good standing in
the state in which the Leased Premises are located; (iii) it
has the corporate or other power, authority and legal right
to carry on the business now being conducted by it and to
engage in the transactions contemplated by this Agreement and
the Development Financing Documents; and (iv) the execution
and delivery of this Agreement and the Development Financing
Documents and the performance and observance of the
provisions hereof and thereof have been (or future acts will
be) duly authorized by all necessary trust, partnership, or
corporate actions of Lessee. Lessee will furnish such
resolutions, affidavits and opinions of counsel to such
effect as Lessor may reasonably require.
8. AVAILABILITY OF UTILITIES - All utility services necessary
for the construction of the Improvements will be available
prior to the commencement of construction, and all utility
services necessary for the proper operation of the
Improvements for their intended purposes are available at the
Leased Premises or will be available at the Leased Premises
prior to the Final Disbursement Date, at commercially
comparable utility rates and hook-up charges for the
vicinity, including water supply, storm and sanitary sewer
facilities, gas, electricity and telephone facilities.
Lessee shall furnish evidence of such availability of
utilities from time to time at Lessor's request.
9. BUILDING PERMITS - All building permits required for the
construction of the Improvements have been obtained prior to
the commencement of the construction of the Improvements and
copies of same will be delivered to Lessor.
10. CONDITION OF LEASED PREMISES - The Leased Premises are not
now damaged or injured as a result of any fire, explosion,
accident, flood or other casualty, nor to the best of
Lessee's knowledge, subject to any action in eminent domain.
11. APPROVAL OF PLANS AND SPECIFICATIONS - To the best knowledge
of Lessee in reliance upon the Project Architect's
certification to such effect, the Plans and Specifications
conform to the requirements and conditions set out by
applicable law or any effective restrictive covenant, to all
governmental authorities which exercise jurisdiction over the
Leased Premises or the construction thereon, and no
construction will be commenced upon the Leased Premises until
said Plans and Specifications shall have been approved by
Lessor, which consent shall not be unreasonably withheld or
delayed and shall be given or withheld within ten business
days after written request therefor. Subject to Article VI,
paragraph 14, no material changes are to be made in the Plans
and Specifications as approved without Lessor's prior
consent, which consent shall not be unreasonably withheld or
delayed and shall be given or withheld within ten business
days after written request therefor; except, after prior
written notice to Lessor, provided the Development Financing
shall remain in balance as set forth in Article VII,
paragraph 3 herein, Lessor shall consent to reallocation
among line items or use of the Construction Contingency in
the aggregate of not more than the amount budgeted as set
forth on Exhibit B for Construction Contingency, unless
Lessee shall deposit Owner Equity with LTIC-CDD in the amount
of such excess over the budgeted amount.
12. CONSTRUCTION CONTRACTS - Lessee has entered into contracts
with the Contractors or separate contracts with materialmen
and laborers providing for the construction of the
Improvements. Lessee will cause the Contractors to promptly
furnish Lessor with the complete list of all Sub-contractors
or entities as and when under contract, which Contractors
propose to engage to furnish labor and/or materials in
constructing the Improvements (such list containing the
names, addresses, and amounts of such sub-contracts as
written in excess individually of $5,000, and prior to
disbursement of funds to or for the benefit of such
Subcontractors, affidavits of authorized signatory and other
documents commercially reasonably required by Title to insure
that the Leased Premises remain lien free) and will from time
to time furnish Lessor or Title with true copies of all
Contracts entered into by Lessee and with the terms of all
verbal agreements therefor, if any, and as to subcontractors,
letters signed by sub-contractors whose contracts are in
excess of $5,000 setting forth the present amount of their
contract and the amounts remaining to be paid under that
contract, if the same information is not stated on a lien
waiver reflecting the most currently requested payment to
such subcontractor.
13. BROKERAGE COMMISSIONS - No brokerage commissions are due in
connection with the transaction contemplated hereby or if
there are commissions due or payable the same will be paid by
Lessee. Lessee agrees to and shall indemnify Lessor from any
liability, claims or losses arising by reason of any such
brokerage commissions. This provision shall survive the
repayment of the Development Financing and shall continue in
full force and effect so long as the possibility of such
liability, claims or losses exists.
14. NO PRIOR WORK - Except as may have been permitted by Lessor,
no work or construction has been commenced or will be
commenced by or on behalf of Lessee on the Leased Premises,
nor has Lessee entered into any contracts or agreements for
such work or construction which could result in the
imposition of a mechanic's or materialmen's lien on the
Leased Premises or the Improvements prior to or on parity
with the interest of Lessor.
15. ENVIRONMENTAL IMPACT STATEMENT - All required environmental
impact statements as required by any governmental authority
having jurisdiction over the Leased Premises or the
construction of the Improvements have been duly filed and
approved.
16. ACCESS - The Leased Premises front on a publicly maintained
road or street or have access to such a road or street under
an easement or private way, which is not subject to a
reversion in favor of any party.
17. FINANCIAL INFORMATION - Any financial statements heretofore
delivered to Lessor are true and correct in all respects,
have been prepared in accordance with generally accepted
accounting practice, and fairly present the respective
financial conditions of the subject thereof as of the
respective dates thereof and no materially adverse change has
occurred in the financial conditions reflected therein since
the respective dates thereof.
ARTICLE VI
COVENANTS OF LESSEE
Lessee hereby covenants and agrees with Lessor as follows:
1. SURVEYS - Prior to execution of any Development Financing
Documents and prior to the initial request for a Disbursement
(as defined in Article VIII hereof), Lessee has furnished to
Lessor three copies of a current perimeter land survey, in
form and substance satisfactory to Lessor, certified to
Lessor, giving a description of the Leased Premises and
showing all encroachments onto or from the Leased Premises,
currently certified by a registered surveyor and bearing his
registry number and showing access rights, easements, or
utilities, rights of way, all setback requirements upon the
Leased Premises, improvements, matters affecting title and
such other items as Lessor may reasonably request.
2. TITLE INSURANCE - Prior to the initial request for
Disbursement the Lessee has furnished Lessor with an ALTA
policy of title insurance, and prior to any subsequent
request for Disbursement such ALTA policy of title insurance
shall be brought down to the date of Disbursement by
endorsement, all in form and substance satisfactory to Lessor
issued at the Lessee's expense and written by Title insuring
the Leased Premises to be marketable, free from exceptions
for mechanic's and materialmen's liens and free from other
exceptions not previously approved by the Lessor, naming
Lessor as fee owner insured to the extent of advances made
hereunder subject only to such exceptions as may be
reasonably approved by Lessor.
3. RESTRICTIONS ON CONVEYANCE OR SECONDARY FINANCING - Lessee
will not transfer, sell, convey or encumber the Leased
Premises or subject the Leased Premises to any secondary
financing in any way without the written consent of the
Lessor, except as permitted in Article V, paragraph 2
relating to trade fixture financing sources or suppliers.
4. INSURANCE - To obtain or cause Contractor to obtain and
maintain such insurance or evidence of insurance as Lessor
may reasonably require, including but not limited to the
following:
(a) BUILDER'S RISK INSURANCE - Builder's Risk Insurance
written on the so-called "Builder's Risk-Completed Value
Basis" in an amount equal to the full replacement cost of the
Improvements at the date of completion with coverage
available on the so-called multiple peril form of policy,
including coverage against collapse and water damage, naming
Lessor as additional named insured, such insurance to be in
such amounts and form and written by such companies as shall
be reasonably approved by Lessor, and the originals of such
policies (together with appropriate endorsement thereto,
evidence of payment of premiums thereon and written
agreements by the insurer or insurers therein to give Lessor
ten (10) days' prior written notice of any intention to
cancel) shall be promptly delivered to Lessor, said insurance
coverage to be kept in full force and effect at all times
until the completion of construction of the Improvements.
(b) HAZARD INSURANCE - Fire and Extended Coverage
Insurance, and such other hazard insurance as Lessor may
require and as called for in the Lease in an amount equal to
the full replacement cost of the Improvements naming Lessor
as an additional named insured, such insurance to be in such
amounts and form and written by such companies as shall be
reasonably approved by Lessor, and the originals of such
policies (together with appropriate endorsements thereto,
evidence of payment of premiums thereon and written agreement
by the insurer or insurers therein to give Lessor ten (10)
days' prior written notice of any intention to cancel) shall
be promptly obtained and delivered to Lessor immediately upon
completion of the construction of the Improvements and before
any portion is occupied by Lessee or any tenant of Lessee
with such insurance to be kept in full force and effect at
all times thereafter.
(c) PUBLIC LIABILITY - Comprehensive public liability
insurance (including operations, contingent liability
operations, operations of sub- contractors, completed
operations and contractual liability insurance) in limits of
coverage as set forth in the Lease.
(d) WORKMEN'S COMPENSATION INSURANCE - Evidence of
compliance with the required coverage under statutory
workmen's compensation requirements.
5. COLLECTION OF INSURANCE PROCEEDS - To cooperate with Lessor
in obtaining for Lessor the benefits of any insurance or
other proceeds lawfully or equitably payable to it in
connection with the transaction contemplated hereby and the
collection of any indebtedness or obligation of the Lessee to
Lessor incurred hereunder (including the payment by Lessee of
the expense of an independent appraisal on behalf of Lessor
in case of a fire or other casualty affecting the Leased
Premises).
6. APPLICATION OF DEVELOPMENT FINANCING PROCEEDS - To use the
proceeds of the Development Financing solely for the purpose
of paying for Construction Costs and such incidental costs
relative to the construction as may be reasonably approved
from time to time in writing by Lessor, and in no event to
use any of the Development Financing proceeds for personal,
corporate or other purposes.
7. EXPENSES - To pay all costs of closing the Development
Financing and all expenses of Lessor with respect thereto,
including, but not limited to, legal fees by Lessor's counsel
and all other reasonable attorney's fees (limited as set
forth in the Commitment), costs of title insurance, transfer
taxes, license and permit fees, recording expenses, surveys,
intangible taxes, appraisal fees, Inspecting Architect fees,
expenses of retaking possession upon default by Lessee
hereunder or other costs of enforcement (including reasonable
attorney's fees) and similar items.
8. LAWS, ORDINANCES AND ETC. - To comply promptly with any law,
ordinance, order, rule or regulation of all authorities
exercising jurisdiction over the Leased Premises or the
construction thereon, including appropriate supervising
boards of fire underwriters and similar agencies and the
requirements of any insurer issuing coverage on the Project.
9. RIGHT OF LESSOR TO INSPECT LEASED PREMISES - Upon 48 hours
notice, except in cases which Lessor reasonably deems to be
an emergency, in which event upon reasonable notice under the
circumstances, to permit Lessor and Title and their
representatives and agents to enter upon the Leased Premises
and to inspect the Improvements and all materials to be used
in construction thereof and to cooperate and cause Contractor
to cooperate with Lessor or Title and their representatives
and agents during such inspections, provided that such is
accomplished without interrupting the construction process.
Provided, further, however, that this provision shall not be
deemed to impose upon Lessor or Title any duty or obligation
whatsoever to undertake such inspections, to correct any
defects in the Improvements or to notify any person with
respect thereto.
10. BOOKS AND RECORDS - To set up and maintain accurate and
complete books, accounts and records pertaining to the
Project including the working drawings in a manner reasonably
acceptable to Lessor. The Lessor, Title and Inspecting
Architect shall have the right at all reasonable times and
upon reasonable prior notice to inspect, examine and copy all
books and records of Lessee relating to the Project, and to
enter and have free access to the Leased Premises and
Improvements and to inspect all work done, labor performed
and material furnished in or about the Project, provided that
such is accomplished without interrupting the construction
process. Notwithstanding the foregoing, Lessee shall be
responsible for making inspections as to the Improvements
during the course of construction and shall determine to its
own satisfaction that the work done or materials supplied by
the Contractors and all Subcontractors has been properly
supplied or done in accordance with the applicable contracts.
Lessee will hold Lessor and Title harmless from and Lessor
and Title shall have and have no liability or obligation of
any kind to Lessee or creditors of Lessee in connection with
any defective, improper or inadequate workmanship or
materials brought in or related to the Improvements or the
Leased Premises, or any mechanic's liens arising as a result
of such workmanship or materials. Upon Lessor's request,
Lessee shall replace or cause to be replaced any such work or
material found to be materially deficient by the Project
Architect or Independent Architect. Lessor shall cooperate
with Lessee in obtaining any rights under any applicable
warranties to accomplish such work. Any inspections made by
Inspecting Architect, Title or Lessor are for the sole
benefit of Lessor and neither Lessee nor any creditor, tenant
or vendee of Lessee shall be entitled to rely on such
inspection. Lessee shall obtain for Lessor coincident rights
to rely upon any warranties obtain by Lessee from its
Contractors or subcontractors.
11. CORRECTION OF DEFECTS - To promptly correct any structural
defects in the Improvements or any material departure from
the Plans and Specifications not previously approved by
Lessor. The advance of any Development Financing proceeds
shall not constitute a waiver of Lessor's right to require
compliance with this covenant.
12. SIGN REGARDING DEVELOPMENT FINANCING - To allow Lessor to
erect and maintain at a suitable site on the Leased Premises,
at a location to be chosen by Lessee in its reasonable
discretion, a sign indicating that Development Financing is
being provided by Lessor, to the extent permitted by law or
private covenant, condition, or agreement affecting the
Project.
13. ADDITIONAL DOCUMENTS - To furnish to Lessor all instruments,
documents, initial surveys, footing or foundation surveys, if
conducted, certificates, plans and specifications,
appraisals, financial statements, title and other insurance
reports and agreements and each and every other document and
instrument required to be furnished by the terms hereof, all
at Lessee's expense; to assign and deliver to Lessor such
documents, instruments, assignments and other writings, and
to do such other acts necessary or desirable to preserve and
protect the Leased Premises, as Lessor may require; and to do
and execute all and such further lawful and reasonable acts,
conveyances and assurances for the carrying out of the
intents and purposes of this Agreement, the Lease, or the
Commitment, as Lessor shall reasonably require from time to
time.
14. ARCHITECTS AND CONSTRUCTION CONTRACTS - To commit no default
nor knowingly permit a default under the terms of the
Architects or Construction Contracts; To waive none nor
knowingly permit a waiver of the obligations of the parties
thereunder; To do no act which would relieve such parties
from their obligations thereunder; To make no amendments to
such contracts, without the prior written consent of Lessor;
To enter into no change orders or extras that cause a
reallocation among budgeted line items, or that in the
aggregate or singularly result in a net increase in excess of
10% of the original contract amount without Lessor's prior
written consent, which consent shall not be unreasonably
withheld or delayed; provided, however, Lessor shall be given
written notice and copies of all change orders; provided,
further, however, with written notice to Lessor prior to any
request for funds subsequent to any such change order or
reallocation, the Lessee shall be allowed to enter into any
change order or extra which is accounted for by use of any
reallocation among line items or any remaining budgeted
Contingency line item, or if the same has been exhausted,
Lessee shall be allowed increases in the original contract
amount without Lessor's consent if Lessee has, upon the
execution of said change order, deposited with Lessor the
amount by which such change order increases the total
Construction Cost; To allow all such contracts to be subject
to the approval of Lessor for its loan purposes; To allow
Lessor to take advantage of all the rights and benefits of
the contracts upon any default by Lessee; and to submit
evidence to Lessor that both the Architect and the
Contractors will permit Lessor to acquire Lessee's interest
under their respective contracts and the Contract Documents
without additional charge or fee should an event of default
occur hereunder, which default is not cured within applicable
notice and cure periods.
15. ENFORCE PERFORMANCE OF SUB-CONTRACTS - To enforce, or cause
to be enforced, the prompt performance of the Sub-Contracts
in accordance with their terms and not to approve any changes
in the same that in the aggregate or singularly result in a
net increase in excess of 10% of the original General
Contractor's contract amount without Lessor's prior written
consent, which consent shall not be unreasonably withheld or
delayed, provided Lessee's right to enter into any such
change order shall be on the same terms set forth in Section
14 above.
16. COMPLIANCE WITH RULES - To comply with, and to require the
Contractors to comply with, all rules, regulations,
ordinances and laws bearing on the conduct of the work on the
Improvements, including the requirements of any insurer
issuing coverage on the Project and the requirements of any
applicable supervising boards of fire underwriters.
17. OPINIONS OF COUNSEL - To furnish such opinions of counsel as
may be reasonably requested of the Lessee in connection with
the matters contemplated by this Agreement.
18. SOIL TESTS - To provide the Lessor with a soil report
prepared by an acceptable engineer certifying as to the
status of the soil conditions on the Leased Premises, the
need or lack of need for special pilings and foundations and
that either any pilings and foundation necessary to support
the Improvements have been placed in a manner and quantity
sufficient to provide the required support or that no such
pilings and foundations are necessary for the support and
construction of the Improvements.
19. MARKETABLE TITLE - To execute and deliver or cause to be
executed and delivered such instruments as may be required by
the Lessor and Title to provide Lessor with a marketable,
valid title to the Leased Premises subject only to such
exceptions to title as may be reasonably approved by Lessor.
20. VIOLATIONS OF GOVERNMENTAL LAW, ORDINANCES OR REGULATIONS -
Lessee will permit no violations nor commit the same, of any
federal or state law or municipal ordinance or order or
requirement of the State in which the Leased Premises are
located or any municipal department or other governmental
authority having jurisdiction affecting the Leased Premises,
which violations in any way have a material adverse affect on
the Leased Premises and which remain uncured after notice by
such governmental authority or department (if notice is
required) and the expiration of the time within which Lessee
may cure such violation, or if no time limitation is
specified, within a reasonable time after notice to cure such
violation .
21. COMPLIANCE WITH ZONING ORDINANCES AND SIMILAR LAWS - The
Plans and Specifications and construction pursuant thereto
and the use of the Leased Premises contemplated thereby will
comply with all governmental laws and regulations and
requirements, zoning ordinances, standards, and regulations
of all governmental bodies exercising jurisdiction over the
Leased Premises, including environmental protection and equal
employment regulations, and appropriate supervising boards of
fire underwriters and similar agencies.
22. APPROVAL OF PLANS AND SPECIFICATIONS - The Plans and
Specifications will conform to the requirements and
conditions set out by applicable law or any effective
restrictive covenant, and to all governmental authorities
which exercise jurisdiction over the Leased Premises or the
construction thereon.
23. NOTICE OF COMMENCMENT\FURNISHING - To provide Lessor prior
to the initial request for a Disbursement, with a copy of the
Notice of Commencement and any amendments thereto prepared in
accordance with Ohio Statute and to be recorded with the
County Recorder's Office where the Leased Premises are
situate immediately following the recording of the Memorandum
of Lease between the parties hereto. Lessee represents and
warrants that a Notice of Commencement has not been and will
not be recorded prior to the recording of the Memorandum of
Lease. Lessee shall post and keep posted the Notice of
Commencement and all amendments thereto in a conspicuous
place on the Leased Premises during the course of
construction of the Project. Lessee further represents and
warrants to timely comply with all provisions of Ohio Statute
respecting keeping the Leased Premises free of mechanic's
liens and failure to do so shall be deemed an Event of
Default as defined under the Net Lease Agreement and this
Agreement. Lessee shall provide Lessor with a copy of each
Notice of Furnishing (as defined in Ohio Statute) received by
Lessee during the course of construction of any Improvements
on the Leased Premises.
ARTICLE VII
CONDITIONS PRECEDENT TO A DISBURSEMENT
It shall be a condition precedent to each Disbursement under this
Development Financing Agreement that:
1. DEVELOPMENT FINANCING DOCUMENTS - The Development Financing
Documents shall have been duly executed and delivered to
Lessor and shall be in full force and effect.
2. LESSEE EQUITY - Lessee shall have paid all of the Lessee
Equity funds into the Project before the first Disbursement
(or any subsequent Disbursement if additional Lessee Equity
should be required) and Lessee shall deliver evidence of such
payment reasonably satisfactory to Lessor.
3. DEVELOPMENT FINANCING BALANCE - As of the date immediately
prior to any Disbursement, the total amount of unadvanced
proceeds of the Development Financing shall be sufficient, in
the commercially reasonable opinion of Lessor (the opinion of
Lessor being based upon affidavit of the General Contractor,
the Project Architect, the Inspecting Architect, or other
reliable licensed third party contractor) to complete the
Improvements free of liens. To the extent the total of the
unadvanced proceeds of the Development Financing shall be
insufficient, at any time, in Lessor's reasonable opinion,
(based upon the affidavit as set forth above) to complete
the Improvements, or be less than the total Construction
Costs not yet paid for or not yet incurred (including
interest accruing for the remainder of the term or extensions
thereof, if any), the Lessee shall immediately deposit with
the Lessor or with Title, as additional Lessee Equity funds,
an amount equal to such deficiency and such additional Lessee
Equity funds shall be disbursed by LTIC-CDD prior to the
Disbursement of any further advance or advances under this
Agreement.
4. NO DEFAULT - No event of default, which remains uncured after
the expiration of applicable cure periods, shall exist under
this Agreement or the Development Financing Documents.
5. REPRESENTATIONS AND WARRANTIES - The representations and
warranties in Article V hereof shall be true and correct on
and as of the date of each Disbursement.
6. COVENANTS - Lessee shall have complied with all of the
covenants made by it in Article VI hereof.
7. SWORN CONSTRUCTION STATEMENT - Prior to the initial
disbursement hereunder, the Lessee shall have submitted to
Lessor and Title a Construction Cost Statement or the
Construction Contract (if such information is contained
therein) sworn to by Lessee and Contractors reflecting all
major Sub-Contractors or materialmen who shall then be
engaged in furnishing labor, materials or supplies for the
Improvements. The list should show the name of each and
every Contractor, Sub-Contractor and materialman (or at least
such entities or individuals whose contract is in excess of
$5,000), its address and an estimate of the dollar value of
the work, labor and materials to be done or supplied and a
general statement of the nature of the work to be done or
materials to be supplied by each Contractor. Thereafter, if
such list should change or new subcontractors shall execute
contracts not reflected on the above list, the Lessee shall
furnish to the Lessor any amendments or additions to the
original statement as so submitted.
8. APPLICATION FOR PAYMENT - Lessor shall have received an
Application for Payment pursuant to Article VIII hereof.
9. TITLE - Title shall issue its endorsement to the title policy
insuring the Lessor as fee owner under the policy in the
aggregate amounts of all prior Disbursements and the
requested Disbursement.
10. WORK IN PLACE - All work or materials for which a
Disbursement is requested shall be in place and incorporated
into the Improvements.
11. AMENDED NOTICE OF COMMENCEMENT - Lessee shall provide Lessor
with any amended Notice of Commencement filed in accordance
with Ohio Statute, and any Notice of Furnishing (as defined
in Ohio Statute) received by Lessee during the course of
construction of any Improvements on the Leased Premises.
ARTICLE VIII
METHODS OF DISBURSEMENTS OF DEVELOPMENT FINANCING PROCEEDS
The Development Financing shall be disbursed (a "Disbursement")
as follows:
1. PROCEDURE - Not more often than monthly, Lessee may submit an
Application for Payment in the form attached hereto as
Exhibit "C" requesting the Disbursement of proceeds under the
Development Financing, which request shall be submitted to
Lessor and to LTIC-CDD at least five (5) business days prior
to the date on which a Disbursement is requested. Provided
the conditions of this Development Financing Agreement are
met on the date requested for such advance, Lessor shall
advance to LTIC-CDD amounts certified to be currently payable
by Lessee (excluding the retainage hereinafter specified) for
the then incurred portion of Total Construction Costs
pursuant to the Application for Payment. All costs shall
have been approved in writing by the Project Architect,
Lessee, Contractor, and if required by Lessor, by the
Inspecting Architect. All interest accruing need not be
disbursed to LTIC-CDD, but may be immediately and
automatically credited by Lessor to the Development Financing
account. LTIC-CDD shall disburse all funds advanced to it by
Lessor in accordance with the terms and provisions of this
Agreement and any special escrow requirements imposed by LTIC-
CDD as a condition to its acting as the disbursing agent
hereunder. The disbursed proceeds of the Development
Financing shall bear interest from and including the date of
disbursement to LTIC-CDD or the date of credit by Lessor
provided that in the event LTIC-CDD shall fail to disburse
any advances within five (5) business days after the date set
for an advance, LTIC-CDD shall return said advance to Lessor
and interest on such advance shall xxxxx from and after the
date of such return. Any amounts disbursed to LTIC-CDD and
returned by LTIC-CDD to the Lessor shall not be deemed to be
advanced under the Development Financing Documents. Each
Application for Payment shall clearly set forth the amounts
due to Lessee and to each Contractor out of the requested
Development Financing and shall be accompanied by the
following:
a. A Draw Request Certificate in the form attached
hereto as Exhibit "D" certifying that each contractor or
materialman for which payment is requested in the relevant
Application for Payment has satisfactorily completed the work
or furnished the materials for which payment is requested in
accordance with the applicable contract; that all work for
which an Application for Payment is made substantially
conforms to the Contract Documents and any approved changes,
and is in place; and that sufficient funds remain of the
undisbursed Development Financing proceeds to complete the
Project and that all funds previously disbursed have been
applied as per the previous Application for Payment.
b. Waivers of Mechanics' Liens and Materialmen's Liens
executed by all Contractors for all work done and all
materials furnished to the Leased Premises and included in
such current Application for Payment, or evidence reasonably
required by Title to insure over the same by special specific
endorsement, or such other releases or lien pursuant to
bonding or otherwise to prevent such liens from attaching to
the Leased Premises.
c. Waivers of Mechanics' Liens and Materialmen's Liens
executed by all Sub-Contractors and workmen and materialmen
for all work done and all materials furnished to the Leased
Premises and included in the immediately preceding
Application for Payment, or evidence reasonably required by
Title to insure over the same by special specific
endorsement, or such other releases or lien pursuant to
bonding or otherwise to prevent such liens from attaching to
the Leased Premises.
d. Such other supporting evidence, including invoices
and receipts as may be requested by Lessor or LTIC-CDD to
substantiate all payments which are to be made out of the
Disbursement or to substantiate all payments then made in
respect to the Project.
2. INTEREST ADVANCE - If interest has accrued on the Development
Financing and is unpaid or fees are payable to the Lessor
hereunder, Lessor shall be, and hereby is, authorized at any
time to advance to itself from the proceeds of the
Development Financing the total amount of such accrued
interest and fees, whether or not an Application for Payment
has been submitted by the Lessee and the same shall be deemed
to be an advance of the proceeds of the Development Financing
under this Agreement in the same manner and with the same
effect as if advanced under the provisions above. It is
understood Lessor may establish an automatic interest reserve
whereby Lessor may withdraw from the Development Financing
account on a regular basis the accrued interest on the
Development Financing and credit the Development Financing
balance with the same.
3. ASSESSMENT AND TAX ADVANCE - As taxes and assessments become
due on the Leased Premises, Lessor shall be, and hereby is,
authorized to advance to itself automatically from the
proceeds of the Development Financing, the total amount of
such taxes and assessments and the same shall be deemed to be
an advance of the proceeds of the Development Financing under
this Agreement in the same manner and with the same effect as
if advances under the provisions above, if not previously
paid before due pursuant to Lessee's obligations under the
Lease.
4. DISBURSE UNDER DEVELOPMENT FINANCING DOCUMENT - All sums
advanced and disbursed hereunder shall be disbursed under and
shall be secured by the Development Financing Documents.
5. PAYMENTS TO SUBCONTRACTORS - In its reasonable discretion
LTIC-CDD may make payments directly to any subcontractor or
materialman.
6. RETAINAGE - Each Disbursement shall be limited to an amount
equal to ninety percent (90%) of the value, exclusive of
Contractor's profit and overhead, of the materials and labor
furnished to the Leased Premises and the balance (herein
called the Retainage) shall be retained by Lessor, provided
that thirty (30) days after completion by each subcontractor
or materialman of his subcontract Lessor will disburse to
such party, or to the Contractor on behalf of such party the
Retainage withheld from said party, provided that as a
condition to such disbursement the Lessee and Project
Architect and the Inspecting Architect shall certify to
Lessor the date that such Party's subcontract has been fully
and satisfactorily completed and the subcontractor or
materialmen shall have supplied Title with satisfactory final
lien waivers, including final lien waivers for any of its
submaterialmen or sub- contractors and the requirements of
any bonding company issuing the Bonds shall have been
fulfilled. Any Retainage due the Contractor for work
performed or materials furnished by the Contractor and the
final balance of Contractor's profit and overhead shall be
disbursed on the Final Disbursement Date pursuant to Article
IX hereof. Contractor's profit and overhead shall be
disbursed based upon and in proportion to the percentage of
completion of the Project, or amounts payable under the
Construction Contract for work actually performed, whichever
is less, as certified by the Project Architect.
ARTICLE IX
FINAL DEVELOPMENT FINANCING BALANCE
Unless and until Lessor and Lessee have entered into a mutually
satisfactory escrow holdback and undertaking agreement to,
inter alia, complete the Improvements and otherwise satisfy
the requirements of this Article IX, at no time and in no
event shall Lessor be obligated to disburse the balance of
the proceeds of the Development Financing, including any
Retainage until the date the following have been satisfied
(the "Final Disbursement Date"):
1. Lessor shall have received reasonably satisfactory evidence
of the final completion of the Improvements in substantial
accordance with the Contract Documents and the Certificate of
Final Completion from the Project Architect accepted by the
Contractor and Lessee.
2. Lessor shall have received satisfactory as-built surveys
reflecting the final location of the Improvements as fully
completed on the Leased Premises in accordance with the
Contract Documents, said survey to be prepared by a
registered or licensed surveyor bearing his registry number,
certifying to Lessor as to the legal description of the
Leased Premises and showing all Improvements located on the
Leased Premises and indicating the street address of the
Improvements, absence of any encroachments on the Leased
Premises or from the Leased Premises onto adjacent land,
showing all access points, and showing conformance to all set
back requirements and delineating all utility easements that
are specifically legally described, rights of way and other
matters affecting the Leased Premises, and certifying as to
the total acreage of the land, the exterior dimensions of the
Improvements, and the number of parking spaces, if any, and
such other matters as Lessor may reasonably request.
3. Lessor shall have received a requisite affidavit of the
Lessee, Contractor and Project Architect, and approved by the
Inspecting Architect certifying as to the final cost of the
Improvements.
4. Title shall have been furnished with such final lien waivers
sufficient in the opinion of Title to dissolve any possible
Mechanic's and Materialman's Liens affecting title to the
Leased Premises or Lessee shall have provided a bond or other
security sufficient to remove the lien as an encumbrance upon
title to the Leased Premises and Title shall have issued its
endorsements to the title policy increasing the insured
coverage to the full amount of all sums disbursed under this
Development Financing Agreement.
5. Lessor shall have received evidence that all of the terms,
provisions and conditions on the part of the Lessee to be
performed or caused to be performed hereunder and under the
Lease, including but not limited to obtaining casualty
insurance for the full insurable value of the Improvements,
have been fulfilled to the satisfaction of Lessor.
6. Lessor shall have received a Final Certificate of Occupancy
issued by the appropriate governmental authority covering the
Improvements and a Certificate of Substantial Completion from
the Project Architect indicating that the Improvements as
built comply with all building codes and zoning ordinances,
including any plat requirements or requirements of recorded
operating covenants or agreements affecting the Leased
Premises.
7. All remaining uncompleted "punch list" items shall have been
satisfactorily completed.
8. The requirements of all bonding companies, if any, with
respect to release of retainage shall have been met.
9. An amendment to the Lease shall be executed by Lessee and
Lessor setting forth the date the first Lease Year shall end
and the Rent for the balance of the first Lease Year, and
evidencing the satisfaction and termination of this
Agreement.
ARTICLE X
EVENTS OF DEFAULT
An "event of default" shall be deemed to have occurred hereunder
and under the Lease, if:
1. DEFAULT UNDER DEVELOPMENT FINANCING DOCUMENTS - Any default
or event of default occurs (which remains uncured after the
expiration of any applicable cure period as may be set forth
in any Development Financing Document) under any of the
Development Financing Documents as defined therein; or
2. FAILURE TO COMPLETE CONSTRUCTION - Lessee shall fail for any
reason, except Lessor's wrongful refusal to fund the
Development Financing pursuant to the terms hereof, to
substantially complete the construction of the Improvements
by the Completion Date; or
3. BREACH OF AGREEMENT - Lessee breaches or fails to perform,
observe or meet any covenant or condition of this Agreement,
provided, however, with respect to non-monetary defaults
hereunder, Lessee shall have twenty days after notice from
Lessor to cure such non-monetary default, or if such default
(but for the payment of monies) cannot be cured within twenty
days, such longer time as may be reasonably necessary to
effect a cure if Lessee is diligently pursuing a course of
conduct reasonably designed to cure the default.; or
4. BREACH OF WARRANTY - Any warranties made or agreed to be made
in any of the Development Financing Documents or this
Agreement shall be breached by Lessee or shall prove to be
false or misleading, and the same shall not be cured or made
to be true and correct within the applicable cure periods; or
5. FILING OF LIENS AGAINST THE LEASED PREMISES - Any lien for
labor, material, taxes or otherwise shall be filed against
the Leased Premises and such lien shall not be promptly paid,
released, contested in an appropriate forum, or bonded over
to Lessor's reasonable satisfaction before the lien shall
materially adversely affect Lessor's interest in the
Premises; or
6. LITIGATION AGAINST LESSEE - Any suit shall be filed against
Lessee, and is not resolved within 120 days and, which if
adversely determined, could substantially impair the ability
of Lessee to perform each and every one of its obligations
under and by virtue of the Development Financing Documents;
or
7. LEVY UPON THE LEASED PREMISES - A levy be made under any
process on the Leased Premises and such levy shall not be
promptly Bonded over prior to the execution of such levy; or
8. TRANSFER OF LEASED PREMISES - Lessee shall without the prior
written consent of Lessor, voluntarily or by operation of
law, sell, transfer, convey or encumber all or any part of
its interest in the Leased Premises or in any of the
personalty located thereon, or used or intended to be used in
connection therewith; or
9. ABANDONMENT - Lessee abandons the project or delays or ceases
work thereon for a period of fifteen consecutive (l5) days,
or delays construction or suffers construction to be delayed
for any period of time for any reason whatsoever so that
completion of Improvements cannot be accomplished in the
judgment of Lessor on or before the Completion Date, subject
to force majeure; or
10. BANKRUPTCY - Lessee shall make an assignment for the benefit
of its creditors or shall admit in writing its inability to
pay its debts as they become due or shall file a petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent or
shall file a petition seeking any reorganization,
dissolution, liquidation, arrangement, composition,
readjustment, or similar relief under any present or future
bankruptcy or insolvency statute, law or regulation, or shall
file an answer admitting to or not contesting the material
allegations of a petition filed against it in any such
proceedings, or shall not have the same dismissed or vacated,
or shall seek or consent or acquiesce in the appointment of
any trustee, receiver or liquidator of a material part of its
properties, or shall not after the appointment without the
consent or acquiescence of it of a trustee, receiver, or
liquidator of any material part of its properties have such
receiver, liquidator or appointment vacated; or
11. EXECUTION LEVY - Execution shall have been levied against
the Leased Premises or any lien creditors commence suit to
enforce a judgment lien against the Leased Premises or such
action or suit shall have been brought and shall not be
immediately bonded over and shall continue unstayed and in
effect for a period of more than 120 consecutive days; or
12. ATTACHMENT - Any part of the Lessor's commitment to make the
advances hereunder shall at any time be subject or liable to
attachment or levy at the suit of any creditor of the Lessee
or at the suit of any subcontractor or creditor of the
Contractor and shall remain unstayed prior to the time Lessor
shall be obligated to comply with the same; or
ARTICLE XI
REMEDIES OF LESSOR
Lessee hereby agrees that the occurrence of any one or more of
the events of default set out in Article X hereof, shall also
constitute an event of default under each of the Development
Financing documents, thereby entitling Lessor, after the
expiration of any applicable cure period, at its option, to
proceed to exercise any or all of the following remedies:
1. EXERCISE OF REMEDIES - To exercise any of the various
remedies provided in any of the Development Financing
Documents, including the acceleration of the Put described in
Articles XIV hereof;
2. CUMULATIVE RIGHTS - Cumulatively to exercise all other
rights, options and privileges provided by law;
3. CEASE MAKING ADVANCES - To refrain from making any advances
under this Agreement but Lessor may make advances after the
happening of any such event without thereby waiving the right
to refrain from making other further advances or to exercise
any of the other rights Lessor may have.
4. RIGHTS TO ENTER - To require Lessee to vacate the Leased
Premises and permit Lessor (whether prior to the exercise of
the Put or during any period prior to the closing of the sale
pursuant to the Put);
(a) To enter into possession;
(b) To perform or cause to be performed any and all
work and labor necessary to complete the Improvements in
accordance with the Plans and Specifications;
(c) To employ security watchmen to protect the Leased
Premises; and
(d) To disburse that portion of the Development
Financing Proceeds not previously disbursed (including any
Retainage) to the extent necessary to complete the
construction of the Improvements in accordance with the
Contract Documents and if the completion requires a larger
sum than the remaining undisbursed portion of the Development
Financing, to disburse such additional funds, all of which
funds so disbursed by Lessor shall be deemed to have been
disbursed to Lessee. For this purpose, Lessee hereby
consents upon an uncured default by Lessee after the
expiration of any applicable notice and cure period, to the
Lessor taking the following actions, or not, in Lessor's
reasonable discretion: to complete the construction of the
Improvements in the name of the Lessee, and hereby empowers
Lessor to take all actions necessary in connection therewith
including but not limited to using any funds of Lessee
including any balance which may be held in escrow and any
funds which may remain unadvanced hereunder for the purpose
of completing the said portion of the Improvements in the
manner called for by the Contract Documents; to make such
additions and changes and corrections in the Contract
Documents which shall be necessary or desirable to complete
the said portion of the Improvements in substantially the
manner contemplated by the Contract Documents; to employ such
contractors, subcontractors, agents, architects, and
inspectors as shall be required for said purposes; to pay,
settle or compromise all existing or future bills and claims
which are or may be liens against said Leased Premises, or
may be necessary or desirable for the completion of the said
portion of the Improvements or the clearance of title to the
Leased Premises; to execute all applications and certificates
in the name of Lessee which may be required by any
construction contract and to do any and every act with
respect to the construction of the said portion of the
Improvements which Lessee may do in its own behalf. Lessor
shall also have power to prosecute and defend all actions and
proceedings in connection with the construction of the said
portion of the Improvements and to take such action and
require such performance as it deems necessary. In
accordance therewith, Lessee hereby assigns and quitclaims
unto Lessor all sums to be advanced hereunder including
Retainage. Any funds so disbursed or fees or charges so
incurred shall be included in any amount necessary for the
Lessee to pay pursuant to the Put.
(e) To discontinue making advances hereunder to the
Lessee and to terminate Lessor's obligations under this
Agreement.
5. RIGHTS NON CUMULATIVE - No right or remedy by this Agreement
or by any Development Financing Document or instrument
delivered by the Lessee pursuant hereto, conferred upon or
reserved to the Lessor shall be or is intended to be
exclusive of any other right or remedy and each and every
right and remedy shall be cumulative and in addition to any
other right or remedy or now or hereafter arising at a law or
in equity or by statute. Except as Lessor may hereafter
otherwise agree in writing, no waiver by Lessor or any breach
by or default of Lessee of any of its obligations,
agreements, or covenants under this Agreement shall be deemed
to be a waiver of any subsequent breach of the same or any
other obligation, agreement or covenant, nor shall any
forbearance by Lessor to seek a remedy for such breach be
deemed a waiver of its rights and remedies with respect to
such a breach, nor shall Lessor be deemed to have waived any
of its rights and remedies unless it be in writing and
executed with the same formality as this Agreement.
6. EXPENSES - The Development Financing and this Agreement and
the performance by the Lessor or Lessee of their obligations
hereunder shall be without cost and expense to the Lessor,
all of which costs and expenses the Lessee agrees to pay and
hold Lessor harmless of and payment of which shall be secured
by the Development Financing Documents. Specifically, Lessee
agrees to pay all title charges, surveyor's fees, appraisals,
loan fees and attorney's fees and costs and the like incurred
in connection with this Agreement.
ARTICLE XII
GENERAL CONDITIONS AND MISCELLANEOUS
The following conditions shall be applicable throughout the term
of this Agreement:
1. RIGHTS OF THIRD PARTIES - All conditions of the obligations
of Lessor hereunder, including the obligation to make
disbursements are imposed solely and exclusively for the
benefit of Lessee, and no other person shall have standing to
require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Lessor will refuse
to make advances in the absence of strict compliance with any
or all thereof, and no other person shall, under any
circumstances, be deemed to be a beneficiary of such
conditions, any and all of which may be freely waived in
whole or in part by Lessor at any time if in its sole
discretion it deems it desirable to do so. In particular,
Lessor makes no representations and assumes no duties or
obligations as to third parties concerning the quality of the
construction of the Improvements or the absence therefrom of
defects. In this connection, Lessee agrees to and shall
indemnify Lessor from any liability, claims or losses
resulting from the disbursement of the Development Financing
proceeds or from the condition of the Leased Premises whether
related to the quality of construction or otherwise and
whether arising during or after the term of the Development
Financing made by Lessor to Lessee in connection therewith,
except for Lessor's gross negligence or willful misconduct.
This provision shall survive the termination of this
Agreement and shall continue in full force and effect so long
as the possibility of any such liability, claims or losses
exists.
2. EVIDENCE OF SATISFACTION OF CONDITIONS - Any condition of
this Agreement which requires the submission of evidence of
the existence or non- existence of a specified fact or facts
implies as a condition the existence or non- existence, as
the case may be, of such fact or facts, and Lessor shall, at
all times, be free independently to establish to its
reasonable satisfaction such existence or non-existence.
3. ASSIGNMENT - Lessee may not assign this Development Financing
Agreement or any of its rights or obligations hereunder
without the prior written consent of Lessor.
4. SUCCESSORS AND ASSIGNS - Whenever in this Agreement one of
the parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall
be included and all covenants and agreements contained in
this Agreement by or on behalf of the Lessee or by or on
behalf of the Lessor shall bind and inure to the benefit of
their respective heirs, legal representatives, successors and
assigns, whether so expressed or not.
5. HEADINGS - The headings of the sections, paragraphs and
subdivisions of this Agreement are for the convenience of
reference only, and are not to be considered a part hereof
and shall not limit or otherwise affect any of the terms
hereof.
6. INVALID PROVISIONS TO AFFECT NO OTHERS - If fulfillment of
any provision hereof, or any transaction related thereto at
the time performance of any such provision shall be due,
shall involve transcending the limit of validity prescribed
by law, then, ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity; and such
clause or provision shall be deemed invalid as though not
herein contained, and the remainder of this Agreement shall
remain operative in full force and effect.
7. NUMBER AND GENDER - Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it
shall equally include the other.
8. AMENDMENTS - Neither this Agreement nor any provision hereof
may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or
termination is sought.
9. NOTICES - Any notice which any party hereto may desire or may
be required to give to any of the parties shall be in writing
and the mailing thereof by certified mail, or equivalent, to
the respective parties' addresses set forth hereinabove or to
such other place such party may by notice in writing
designate as its address shall constitute service of notice
hereunder.
10. GOVERNING LAW - This Development Financing Agreement is made
and executed pursuant to and is intended to be governed by
the laws of the State where the Leased Premises are located.
11. FORCE MAJEURE - Anything in this Agreement to the contrary
notwithstanding, Lessee shall not be deemed in default with
respect to the performance of any of the terms, provisions,
covenants, and conditions of this Agreement (except for the
payment of all other monetary sums payable hereunder, to
which the provisions of this Section shall not apply), if the
same shall be due to any strike, lockout, civil commotion,
warlike operations, invasion, rebellion, hostilities,
sabotage, governmental regulations or controls,
impracticability of obtaining any materials or labor (except
due to the payment of monies), shortage or unavailability of
a source of energy or utility service, Act of God, casualty,
adverse weather conditions, or any cause beyond the
reasonable control of Lessee (except due to the payment of
monies). Provided, however, in order to invoke the extension
of the Completion Date afforded by this section, Lessee shall
notify Lessor in writing within five days of the occurrence
of such force majeure, and in any event the Completion Date
shall be extended as a result of such occurrence no more than
reasonably necessary and in no event no more than 90 days.
ARTICLE XIII
DAMAGE, DESTRUCTION, CONDEMNATION, USE OF INSURANCE PROCEEDS
1. DAMAGE OR DESTRUCTION OF THE LEASED PREMISES. Lessee
will give the Lessor prompt notice of any damage to or
destruction of the Leased Premises and in case of loss
covered by policies of insurance the Lessor (whether before
or after the exercise of the Put if Lessee be in default
hereof) is hereby authorized at its option to settle and
adjust any claim arising out of such policies and collect and
receipt for the proceeds payable therefrom, provided, that
the Lessee may itself adjust and collect for any losses
arising out of a single occurrence aggregating not in excess
of $50,000.00. Any expense incurred by the Lessor in the
adjustment and collection of insurance proceeds (including
the cost of any independent appraisal of the loss or damage
on behalf of Lessor) shall be reimbursed to the Lessor first
out of any proceeds. The proceeds or any part thereof shall
be applied to reduction of the Put Price, which Put may then
be exercised by Lessor, without the application of any
prepayment premium, or to the restoration or repair of the
Leased Premises, the choice of application to be solely at
the discretion of Lessor.
2. CONDEMNATION. Lessee will give the Lessor prompt notice
of any action, actual or threatened, in condemnation or
eminent domain affecting the Leased Premises and hereby
assigns, transfers, and sets over to the Lessor the entire
proceeds of any award or claim for damages for all or any
part of the Leased Premises taken or damaged under the power
of eminent domain or condemnation, the Lessor being hereby
authorized to intervene in any such action and to collect and
receive from the condemning authorities and give proper
receipts and acquittances for such proceeds. Lessee will not
enter into any agreements with the condemning authority
permitting or consenting to the taking of the Leased Premises
unless prior written consent of Lessor is obtained. Any
expenses incurred by the Lessor in intervening in such action
or collecting such proceeds shall be reimbursed to the Lessor
first out of the proceeds. The proceeds or any part thereof
shall be applied to reduction of the Put Price, which Put may
then be exercised by Lessor, without the application of any
prepayment premium, or to the restoration or repair of the
Leased Premises, the choice of application to be solely at
the discretion of Lessor.
3. DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS. Any
restoration or repair shall be done under the supervision of
an architect acceptable to Lessor and pursuant to plans and
specifications approved by the Lessor. Subject to paragraph
4 below, in any case where Lessor may elect to apply the
proceeds to repair or restoration or permit the Lessee to so
apply the proceeds they shall be held by Lessor for such
purposes and will from time to time be disbursed by Lessor to
defray the costs of such restoration or repair under such
safeguards and controls as Lessor may reasonably require to
assure completion in accordance with the approved plans and
specifications and free of liens or claims. Lessee shall on
demand deposit with Lessor any sums necessary to make up any
deficits between the actual cost of the work and the proceeds
and provide such lien waivers and completion bonds as Lessor
may reasonably require. Any surplus which may remain after
payment of all costs of restoration or repair shall be
applied against the rent then most remotely to be paid,
whether due or not, without application of any prepayment
premium or credit.
4. LESSOR TO MAKE PROCEEDS AVAILABLE. In the event of
insured damage to the improvements or in the event of a
taking by condemnation of only a portion of the improvements
or land area of the Leased Premises, and provided, the
portion remaining can with restoration or repair continue to
be operated for the purposes utilized immediately prior to
such damage or taking, and if the appraised value of the
Leased Premises after such restoration or repair shall not
have been reduced, and provided further, no event of default
exists under this Agreement after the expiration of any
applicable cure periods and Lessee is diligently pursuing a
course of conduct reasonably designed to cure such default,
and the Lessee certified to Lessor their intention to remain
in possession of the Leased Premises without any abatement or
adjustment of rental payments, the Lessor agrees to make the
proceeds available to the restoration or repair of the
improvements on the Leased Premises in accordance with the
provisions of paragraph 3 hereof.
ARTICLE XIV
MANDATORY PUT UPON DEFAULT
Should Lessee commit an event of Default under this Agreement
or any Development Financing Document (after the expiration
of any applicable notice and cure period) ("Uncured
Default"), Lessor shall have the following rights:
Upon an Uncured Default, or damage or destruction or
condemnation of the Leased Premises not addressed by
paragraph XIII (4), if Lessor elects to exercise the
following option, Lessee shall purchase the Leased Premises
from Lessor subject to the following terms and conditions:
A. The purchase price at which
Lessor shall sell the Leased Premises to Lessee, shall
be the total amount of Initial Disbursed Funds disbursed
by Lessor to acquire the Leased Premises at the Closing
Date (as defined in the Commitment), plus the total
amount of funds disbursed pursuant to this Agreement,
plus all accrued interest and incurred expenses of
Lessor fundable pursuant to this Agreement, plus all
reasonable costs of collection and enforcement of the
terms hereof.
B. At such time as Lessor shall
elect to sell the Leased Premises, Lessor shall give
Lessee written notice of its intent to exercise its
option to sell the Leased Premises to Lessee, including
in such notice Lessor's calculation of the Purchase
Price through the actual closing of the sale of the
Leased Premises to Lessee pursuant to the terms hereof
(the "Sale Date"), which shall be sixty days from such
notice by Lessor. Lessee shall on or before the Sale
Date deliver the purchase price as set forth in
subparagraph (A) of this Article to Lessor. Upon such
delivery, which shall be preceded by ten (10) days
notice to Lessor, Lessor shall deliver to Lessee a
warranty deed and appropriate affidavits evidencing that
Lessor transfers the Leased Premises to Lessee subject
to restrictions, easements or other encumbrances upon
title existing as of the date of delivery, if any,
except to the extent, if any, placed of record or caused
by Lessor. The purchase price to be paid to Lessor
shall be a net amount. All expenses in connection with
the transfer of the Leased Premises, including, but not
limited to appraisal fees, title insurance, recording
fees, documentary stamps, conveyance tax, title
evidence, and all other closing costs, shall be paid by
the Lessee. The purchase price shall be paid by Lessee
in cash to Lessor concurrently with the conveyance of
the Leased Premises by the Lessor to the Lessee. If
Lessor elects to sell the Leased Premises to Lessee
pursuant to the terms hereof, the Leased Premises shall
be conveyed by the Lessor to the Lessee "As Is".
If Lessee shall fail to pay the Purchase Price on or before
the Sale Date, Lessor may terminate the Lease, and sell the
Leased Premises to any third party purchaser. Lessor may
then send Lessee notice of the shortfall (the "Deficiency"),
if any, between the amount of the net proceeds received by
Lessor in such sale, and the total amount of Initial
Disbursed Funds disbursed by Lessor to acquire the Parcel at
the Closing Date (as defined in the Commitment), plus the
total amount of funds disbursed pursuant to this Agreement,
plus all accrued interest and incurred expenses of Lessor
fundable pursuant to this Agreement, plus all reasonable
costs of collection and enforcement of the terms hereof.
Lessee shall immediately upon receipt of such notice of
Deficiency remit the amount of the Deficiency in good funds
to Lessor.
Lessor's rights under this Mandatory Put shall expire on the
Final Disbursement Date when the amendment to the Lease has
been executed by all parties as set forth in Article IX
hereof.
ARTICLE XV
RENT, INTEREST, AND RENTAL MODIFICATION DATE
1. Rent shall be payable by Lessee and calculated as follows, on
the funds advanced by Lessor on the Closing Date for the
purchase of the land and related closing costs (the "Initial
Disbursed Funds"): Rent shall accrue in the amount of $
6,043.33 per month absent an uncured Default by Lessee;
absent an uncured Default, accrued rent during the period of
construction of the Improvements shall not be payable until
the Final Disbursement Date. Upon the occurrence of an
uncured Default, all accrued rent shall be immediately due
and payable.
On the Rental Modification Date, if not otherwise in default
hereunder, Lessee shall begin paying Rent by the first of
each month (prorata for the balance of any partial month in
which the
Rental Modification Date occurs, payable with the first such
adjusted Rent payable on the first day of the first full
month following the Rental Modification Date) in the amount
of $9,065.00 per month out of pocket. On the Final
Disbursement Date, absent an Uncured Default, Rent shall be
adjusted and documented by the lease amendment contemplated
in Article IX hereof and paid to Lessor as described in
Article F. of the Commitment.
2. Disbursed proceeds of the Development Financing shall
accrue interest at a rate of seven percent (7.0%) per annum,
which interest shall accrue unpaid unless advanced by Lessor
to itself, or Lessee shall default hereunder, which default
shall remain uncured after the expiration of any applicable
notice and cure period. However, one hundred and eighty days
(180) from the date hereof, (the "Rental Modification Date"),
Lessee shall begin making monthly payments of subsequently
accruing interest at the rate of 10.5% per annum out of
pocket ("Out of Pocket Invoiced Interest") within 5 days
after invoice from Lessor.
3. Upon the occurrence of an event of default which remains
uncured after the expiration of applicable notice and cure
periods, disbursed proceeds of the Development Financing
shall accrue interest at a rate of Fifteen Percent (15.0%)
per annum, or the highest rate allowed by law, whichever is
less, and the rental rate on the Initial Disbursed funds
shall increase to Fifteen Percent (15.0%) per annum, or the
highest rental rate allowed by law, whichever is less.
ARTICLE XVI
COUNTERPART EXECUTION
Counterpart Execution. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Lessee and Lessor have hereunto caused
these presents to be executed on the date first above
written.
Americana Dining Corp., a
Delaware corporation
By:/s/ Xxxxx Xxxxxxx
Its: Vice President
[Lessor's Signature appears on following page.]
NET LEASE INCOME & GROWTH FUND 84-A LIMITED PARTNERSHIP
By: Net Lease Management 84-A, Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
By: AEI Fund Management XX, Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
Exhibit "A"
2.012 ACRES
Situated in the State of Ohio, County of Franklin, City of
Columbus, Xxxxxxx 0, Xxxxxxxx 0, Xxxxx 00, Xxxxxx Xxxxxx
Military Lands and being all out of a 3.499 acre residual of
Parcel 2 as conveyed to MORSO Holding Co. Of record in
Official Record 30846G11 (all deed references refer to the
records of the Recorder's Office, Franklin County, Ohio) and
described as follows:
Beginning for reference at the centerline intersection of
Easton Way with Xxxxx Crossing as dedicated in Plat Book 86,
Page 56-58;
thence North 2 18' 27" East, with the centerline of said
Xxxxx Crossing,, a distance of 1043.69 feet to a point;
thence North 87 41' 33" West, a distance of 55.00 feet to a
point in the westerly right-of-way line of said Xxxxx
Crossing;
thence with said westerly right-of-way line, the following
courses:
North 2 18' 27" East, a distance of 23.37 feet to a point of
curvature;
With a curve to the right having a central angle of 1 26'
50", a radius of 1055.00 feet, whose chord bears North 3 01'
51" East, a chord distance of 26.65 feet to an iron pin set
at the true point of beginning for this description;
thence with a new division line across said 3.499 acre
residual, the following courses:
North 87 41' 33" West, a distance of 39.98 feet to an iron
pin set;
South 2 18' 27" West, a distance of 11.51 feet to an iron pin
set;
North 87 41' 33" West a distance of 86.86 feet to an iron pin
set;
North 42 41' 33" West, a distance of 84.15 feet to an iron
pin set;
North 87 41' 33" West, a distance of 19.50 feet to an iron
pin set;
North 2 18' 27" East, a distance of 120.00 feet to an iron
pin set;
North 87 41' 33" West, a distance of 184.50 feet to an iron
pin set in an easterly line of a 50.706 acre tract as
conveyed to Easton Market Limited Liability Company of record
in Official Record 34933B09;
thence North 2 18' 27" East, with an easterly line of said
Easton Market tract, a distance of 163.36 feet to an iron pin
set at a southeasterly corner thereof;
thence with a southerly line of said Easton Market tract, the
following courses and distances:
2.012 ACRES
-2-
South 80 11' 33" East, a distance of 257.28 feet to an iron
pin set at a point of curvature;
With a curve to the right having a central angle of 27 45'
35", a radius of 180.00 feet, whose chord bears South 66 18'
45" East, a chord distance of 86.36 feet to an iron pin set
at a point of reverse curvature;
With a curve to the left having a central angle of 20 08'
31", a radius of 220.00 feet, whose chord bears South 62 30'
13" East, a chord distance of 76.94 feet to an iron pin set
at a point of tangency;
South 72 34' 34" East, a distance of 7.17 feet to a point of
curvature;
With a curve to the right having a central angle of 88 23'
07", a radius of 10.00 feet, whose chord bears South 28 23'
00" East, a chord distance of 13.94 ffet to a point of
reverse curvature in said westerly right-of-way line;
thence with said westerly right-of-way line with a curve to
the left having a central angle of 12 03' 18", a radius of
1055.00 feet, whose chord bears South 9 46' 55" West, a chord
distance of 221.56 feet to the true point of beginning and
containing 2.012 acres of land, more or less.
Subject, however to all legal rights-of-way and/or easements,
if any, of previous record.
Bearings are based on the Ohio State Plane Coordinate System
as per NAD 83. Control for bearings was from coordinates of
monuments XXXXX 64 and XXXXX 164 established by the Franklin
County Engineering Department using Global Positioning System
procedures and equipment.
EVANS, MECHWART, XXXXXXXXX & XXXXXX, INC.
/s/ Xxxx X Xxx 6/25/98
Xxxx X Xxx
Registered Surveyor No. 7918
EXHIBIT B
CONSTRUCTION COSTS
PROJECT COST BUDGET
Americana Dining Corp
Columbus, Ohio
Project Budget
Hard Costs:
Land and Building Purchase $1,000,000.00
General Building Construction $1,470,900.00
Sitework $ 305,000.00
Vendor Contracts $ 91,303.00
Contingency 10% $ 186,700.00
Subtotal Hard Costs $3,053,903.00
Soft Costs:
Architect/Engineer $ 63,000.00
Site Investigation/Survey $ 12,000.00
Permits/Fees $ 32,500.00
Prototype Fee $ 10,000.00
Liquor License Purchase $ 8,000.00
Builders Risk Insurance $ 2,000.00
Title Insurance $ 15,000.00
CEI Parcel Develop Fee (1) $ 36,250.00
CEI Legal Fees $ 25,000.00
AEI Legal Fees $ 7,500.00
RE Fee Paid By Sell/Lessee $ 25,000.00
CEI Construction Supervision and Overhead $ 30,000.00
AEI Development Fee $ 10,000.00
AEI Develop Interst (2) $ 70,200.00
Appraisal $ 4,000.00
Promesa Fees $ 285.00
Sale/Leaseback Fee 1% (3) $ 34,080.00
AEI Site Inspection $ 1,000.00
Miscellaneous $ 2,282.00
Subtotal Soft Cost $ 388,097.00
Project Cotst $3,442,000.00
AEI 2% overhead Reimbursement $ 69,000.00
Total Project Cost $3,511,000.00
(1) Est. 1st draw amount $1,036,000 x 7.0%/12 mos x 6 mos =
$36,260
(2) $3,442,020 - 1,036,000 x 1/2 money out x 7.0%/12 mos x 10
mos = $70,200
(3) Adjusted upon final funding and total final project cost.
This fee is calculated prior to AEI's 2% overhead disbursement.
