EXHIBIT 10.1
TRI-PARTY AGREEMENT
THIS AGREEMENT is made on March 24, 2004, by Meadowbrook Insurance
Group, Inc., 00000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000
("Meadowbrook"), Kirco Development LLC, 000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 000,
Xxxx, Xxxxxxxx 00000-0000 ("Kirco"), and Standard Federal Bank N.A., a national
banking association, 0000 Xxx Xxxxxx Xxxx, Xxxx, Xxxxxxxx 00000 ("Standard
Federal").
RECITALS:
A. Meadowbrook and Kirco are parties to a Development Agreement dated
December 3, 2003 (the "Development Agreement"), under which Kirco agreed to
construct an office building consisting of 72,000 gross square feet and related
improvements (the "Project") on a parcel of real estate owned by Meadowbrook
(the "Property").
B. The Development Agreement contemplated that Kirco would obtain
construction financing for the Project, and that Kirco, Meadowbrook and the
construction lender would enter into a Tri-Party Agreement.
C. Standard Federal Bank has committed to provide to Kirco construction
financing for the Project (the "Construction Loan"). The Construction Loan is
evidenced and secured by a Construction Loan Agreement, an Assignment of
Development Agreement, a mortgage on the Building and on the Real Estate and
related documents (the "Construction Loan Documents").
Wherefore the parties agree as follows:
1. Agreements of Standard Federal. Standard Federal agrees as follows:
(a) So long as this Agreement is in effect, the Construction Loan
Documents shall not be amended without the prior written consent of
Meadowbrook and Kirco, which consent shall not be unreasonably withheld
or delayed. Subject to fulfillment of the terms and conditions of the
Construction Loan and the Construction Loan Documents, Standard Federal
shall close and disburse the Construction Loan to Kirco to finance
construction of the Building in accordance with the terms of the
Construction Loan Documents;
(b) Standard Federal will, upon written request from Meadowbrook,
from time to time, confirm that the Construction Loan is in full force
and effect, if such is the fact.
(c) Standard Federal agrees not to accelerate the Construction
Loan or exercise any remedies with respect to the Construction Loan,
prior to ten days after written notice of the default to Meadowbrook;
2. Agreements of Kirco. Kirco hereby covenants, represents and warrants
to Standard Federal and Meadowbrook that it shall:
(a) Comply in all respects with the terms and conditions contained
in the Construction Loan Documents;
(b) Comply in all respects with the terms and conditions contained
in the Development Agreement; and
(c) Notify Standard Federal in writing of any default by
Meadowbrook under the Development Agreement. Kirco will not take any
action under the Development Agreement on account of such default
without Standard Federal's prior written consent.
3. Agreements of Meadowbrook. Meadowbrook hereby approves the
Construction Loan Documents. In addition, Meadowbrook hereby covenants,
represents and warrants to Standard Federal as follows:
(a) So long as this Agreement is in full force and effect, the
Development Agreement shall not be amended or terminated without the
prior written consent of Standard Federal;
(b) Meadowbrook shall notify Standard Federal, in writing,
concurrently with any notification to Kirco, of any default by Kirco
under the terms of the Development Agreement (hereinafter, a
"Default"). Meadowbrook acknowledges that a Default under the
Development Agreement will be an Event of Default under the
Construction Loan Agreement, upon which Standard Federal may exercise
the rights described in 3(c) below, whether or not Standard Federal
attempts to cure or cures the Default. Meadowbrook agrees that, prior
to exercising any right with respect to such Default (including the
termination of the Development Agreement or the refusal to fund any
payment thereunder), Standard Federal shall have the right, but not the
obligation, to cure such Default (x) within twenty (20) days after such
written notice, or (y) when the cure reasonably requires more than
twenty (20) days, to commence to cure such Default within such period
of twenty (20) days and to diligently and continuously prosecute such
cure to completion, so long as such Default is cured on or before the
applicable substantial completion date under the Development Agreement;
(c) Upon an Event of Default under the Construction Loan
Documents, including but not limited to an Event of Default arising due
to Kirco's Default under the Development Agreement, whether or not
Standard Federal is attempting to cure or has cured such Default,
Standard Federal shall be able to avail itself of all of the rights of
Kirco under the Development Agreement, including but not limited to:
(i) the right to complete construction of the Building, (ii) the right
to receive all payments due from Meadowbrook under the Development
Agreement, (iii) Kirco's option to purchase the Property, (iv) the
option to require Meadowbrook to lease the property, and (v) the right
to assert all lien rights that Kirco may have, all as provided in and
subject to the terms and conditions of the Development Agreement.
(d) The Development Agreement is the full and final agreement of
Meadowbrook and Kirco with respect to the construction of the Project,
is in full force and effect as of the date thereof, there are no known
breaches or defaults by Kirco thereunder and Meadowbrook has no actual
knowledge of any facts which would entitle Meadowbrook to declare a
default under the Development Agreement; and
(e) Meadowbrook will, upon written request from Standard Federal,
from time to time, confirm that the Development Agreement is in full
force and effect, if such is the fact.
(f) The Contract Price payable by Meadowbrook under the
Development Agreement shall be paid to Standard Federal, upon
satisfaction of all conditions to such payment in the Development
Agreement, and subject to any offsets permitted under the Development
Agreement, but without any other offsets or deductions, and applied to
the Construction Loan balance. Standard Federal will pay any excess to
Kirco.
(g) Standard Federal will have a right of first offer with respect
to any financing of the Project that Meadowbrook proposes to obtain.
For purposes of this section, "right of first offer" means the
following: if Meadowbrook decides to obtain bank financing of the
Project, Meadowbrook will notify Standard Federal and will allow
Standard Federal to provide a proposal for any such financing.
4. Regarding the Development Agreement.
(a) Concurrently herewith, Meadowbrook and Kirco have executed and
delivered to Standard Federal a mortgage on the project to secure the
Construction Loan. Meadowbrook and Kirco acknowledge and agree that
execution and delivery of that mortgage satisfies the provisions of the
Development Agreement requiring a mortgage. To the extent the mortgage
as executed and delivered is different from that described in the
Development Agreement, any differences are waived. Standard Federal
agrees to release the mortgage as to Phase 2 of the Project, upon the
request of Meadowbrook (provided that Phases 1 and 2 of the Project
have been properly split and separated for tax purposes.
(b) Meadowbrook and Kirco also agree to waive any conditions in
the Development Agreement relating to Kirco's acquisition of
construction financing, including, but not limited to, any provision
that gives Meadowbrook an option to terminate the agreement if Kirco
fails to obtain a Construction Loan.
(c) Meadowbrook acknowledges and agrees that Kirco has assigned to
Standard Federal, as collateral for the Construction Loan, all of
Kirco's rights under the Development Agreement. Meadowbrook
acknowledges and agrees that, as of the date hereof, Standard Federal
has not assumed any of Kirco's obligations under the Development
Agreement.
5. Regarding the Construction of the Project.
(a) No changes in the plans and specifications for the Building
which would result in increasing the construction cost by more than
$100,000 in the aggregate will be made without Standard Federals'
consent.
(b) Standard Federal's loan documentation will require
Meadowbrook's consent to all construction advances prior to submittal
of the advance request to Standard Federal. Meadowbrook will inspect
the Project periodically and not more than once per week. Meadowbrook's
consent to a Construction Loan advance shall be deemed a representation
to Standard Federal and Kirco that work to be paid for by the advance,
and all work previously completed is satisfactory to Meadowbrook, but
will not constitute a waiver of any claims Meadowbrook has against
Kirco for any defects in the work that reasonably could not be
discovered by Meadowbrook's inspections as provided above.
(c) Nothing herein shall constitute a waiver or release of Kirco
or Meadowbrook from any of their respective obligations under the
Development Agreement.
6. Notices. Any notices provided for herein must be given in writing
and may be given by sending such notice by United States certified mail, postage
prepaid, return receipt requested, to the addresses of the parties referred to
on the face page hereof, or by sending such notice by expedited delivery service
(such as, but not limited to, Federal Express). The address of any party may be
changed by such party by delivery of written notice in the manner provided
herein. Any notice given by certified mail in the manner provided herein shall
be effective three (3) business days after deposit in the United States mail,
and any notice given by expedited delivery service shall be effective, when
received.
7. Successors; Modifications. The covenants, agreements, rights and
remedies contained in this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that neither Standard Federal nor Meadowbrook may assign this
Agreement, or any rights or interest hereunder, without the prior written
consent of the other. This Agreement may not be changed, terminated or modified
in any manner other than by written agreement signed by the parties hereto.
8. Third Party Rights. Except as set forth herein, Kirco agrees that in
no event shall Kirco or any third party have any rights against either Standard
Federal or Meadowbrook arising out of this Agreement; it being understood that
this Agreement is being made at Kirco's request and to induce Meadowbrook to
undertake, for the benefit of Standard Federal, the obligations of Meadowbrook
set forth herein. This Agreement is not for the benefit of Kirco or any third
party, and Kirco is joining in the execution of this Agreement solely for the
purpose of assuming obligations for the benefit of Standard Federal and
Meadowbrook.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan.
10. Modifications. This Agreement may be amended only by a written
document executed by all parties hereto.
11. Counterparts. This Agreement may be executed in two or more
counterparts, all of which, together, shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Tri-Party
Agreement as of the day and year first above written.
Meadowbrook Insurance Group, Inc., a
Michigan corporation
By: S/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Its: President and CEO
Kirco Development LLC, a Michigan
limited liability company
By: S/
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Its: President
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Standard Federal Bank N.A., a national
banking association
By: S/
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Its: VP
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