Exhibit 10.8
CONSTRUCTION-TERM LOAN AGREEMENT
by and among
MARSHALL FINANCIAL GROUP, LLC,
a Delaware limited liability company
and
WENATCHEE EVENTS CENTER, LLC,
a Washington limited liability company
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TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS......................................................
1
Section 1.1 Defined
Terms............................................. 1
ARTICLE II COMMITMENT TO MAKE ADVANCES, DISBURSEMENT PROCEDURES
AND
DEPOSIT OF FUNDS................................................
5
Section 2.1 The
Advances.............................................. 5
Section 2.2 Advance
Requirements...................................... 5
Section 2.3 Disbursement Procedures for
Advances...................... 6
Section 2.4 Deposit of Funds by
Borrower.............................. 7
Section 2.5 Disbursements Without Receipt of Draw
Request.............
7
Section 2.6 Interest
Reserve.......................................... 8
Section 2.7 Intentionally
Omitted..................................... 8
Section 2.8 Project
Contingency....................................... 8
ARTICLE III CONDITIONS OF
LENDING.......................................... 8
Section 3.1 Conditions Precedent to
Lending........................... 8
Section 3.2 Further Conditions Precedent to All
Advances.............. 11
Section 3.3 Conditions Precedent to the Final
Advance................. 12
Section 3.4
Insurance................................................. 13
Section 3.5
Casualty/Destruction...................................... 15
Section 3.6 No
Waiver................................................. 15
ARTICLE IV WARRANTIES, REPRESENTATIONS AND COVENANTS OF
BORROWER........... 15
Section 4.1 Representations and
Warranties............................ 15
Section 4.2
Covenants................................................. 17
Section 4.3 Negative
Covenants........................................ 19
Section 4.4 Environmental Representation, Warranties and
Covenants,
and Indemnities........................................... 20
ARTICLE V EVENTS OF DEFAULT; RIGHTS AND
REMEDIES........................... 21
Section 5.1 Event of Default
Defined.................................. 21
Section 5.2 Rights and
Remedies....................................... 24
ARTICLE VI
MISCELLANEOUS...................................................
24
Section 6.1
Inspections............................................... 24
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Section 6.2 Indemnification by
Borrower............................... 25
Section 6.3
Fees...................................................... 25
Section 6.4 Addresses for
Notices..................................... 25
Section 6.5 Amendments, Determinations by Lender, Consents,
Etc....... 26
Section 6.6 Time of the
Essence....................................... 26
Section 6.7
Waivers................................................... 26
Section 6.8 Remedies
Cumulative....................................... 26
Section 6.9 Governing Law and Entire
Agreement........................ 26
Section 6.10
Counterparts............................................. 26
Section 6.11
Term..................................................... 26
Section 6.12 Successors and
Assigns................................... 26
Section 6.13
Offsets.................................................. 27
Section 6.14
Headings................................................. 27
Section 6.15
Accounting............................................... 27
Section 6.16 Not Joint
Venturer....................................... 27
Section 6.17 Adequacy of Loan
Proceeds................................ 27
Section 6.18
Participations........................................... 27
Section 6.19 Relationship to Other
Documents.......................... 27
Section 6.20
Reappraisals............................................. 27
Section 6.21 Construction
Signage..................................... 28
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CONSTRUCTION-TERM LOAN AGREEMENT
THIS
CONSTRUCTION-TERM
LOAN AGREEMENT
("AGREEMENT")
is made and
entered
into this __ day of August 2007, by and among MARSHALL FINANCIAL GROUP, LLC, a
Delaware limited liability company ("LENDER"), and WENATCHEE EVENTS
CENTER, LLC,
a Washington limited
liability company
("BORROWER") and
GLOBAL
ENTERTAINMENT
CORPORATION, a Nevada corporation ("GUARANTOR").
W I T N E S S E T H:
WHEREAS,
Borrower has
requested
that
Lender
extend
to it a
construction-term loan
as more fully
described in this Agreement (the "LOAN");
and
WHEREAS, Lender has
agreed to extend the Loan to Borrower upon the terms
and subject to the conditions hereinafter set forth.
NOW,
THEREFORE,
in consideration of
the foregoing premises and the mutual
covenants herein
contained and for other good and valuable consideration, the
receipt and
sufficiency of which
are hereby
acknowledged, the
parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section
1.1 DEFINED TERMS. As used in this Agreement the defined terms
in
this ARTICLE I, and any other terms defined in this Agreement,
i.e., those terms
beginning with a capital letter, will have the meanings
ascribed to each
such
term (such meanings to
be equally applicable
to both the
singular and
plural
forms of the terms defined):
(a)
"ADVANCE" - An advance of the Commitment by Lender to Borrower
pursuant to ARTICLE II hereof.
(b)
"AFFILIATE" - When
used with reference to any Person, (a) each Person
that, directly or indirectly, controls, is controlled by or is under
common control
with, the Person referred to, (b) each Person that
beneficially owns or holds, directly or indirectly, 5% or more of any
class of voting Equity
Interests of the Person referred to, (c) each
Person, 5% or
more of the voting Equity Interests of which is
beneficially owned or
held, directly
or indirectly, by the Person
referred to, and (d) each of such Person's officers, directors, joint
venturers and
partners. For these purposes, the term "control"
(including the terms
"controlled by" and "under common control with")
means the possession,
directly or indirectly, of the power to direct
or cause the direction of the management and policies of the Person
in
question, whether
by contract, ownership of voting securities,
membership interests or otherwise.
(c)
"AGREEMENT" - This
Construction-Term
Loan Agreement, including any
amendment hereof or supplement hereto.
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(d)
"ARCHITECT"
- The project
architect as may be retained by
Borrower:
Sink Combs Dethlefs.
(e)
"ARCHITECT'S
CONTRACT" - The agreement between Borrower and the
Architect as to preparation of the Drawings and Specifications for
the
Project and the supervision of the construction of the Project.
(f)
"CERTIFICATE OF
COMPLETION" - The certificate from General Contractor
and/or Architect
certifying those items referred to in Section 3.3(a)
hereof.
(g)
"CITY" - City of
Wenatchee, Washington.
(h)
"COMMITMENT"
- The commitment of Lender to make
advances to Borrower
to construct the Project in an aggregate principal amount of up to
and
including FIFTY TWO MILLION AND NO/100 DOLLARS
($52,000,000.00).
(i)
"COMMITMENT
TERMINATION
DATE" - August __,
2009, or the date of
the
termination of
Lender's Commitment pursuant to SECTION 5.2
hereof,
whichever date occurs earlier.
(j)
"CONSTRUCTION
CONTRACT" - The agreement between Borrower and the
General Contractor for the construction of the Project.
(k)
"CONTRACTOR" - Any
General Contractor, who shall be engaged to work on
or to furnish materials, labor and supplies for the Project.
(l)
"DISBURSING AGENT" -
Stewart Title Guaranty Company.
(l)
"DISBURSING
AGREEMENT"
- The Disbursing Agreement of even date
herewith, executed by
and between Borrower, Lender and the Disbursing
Agent pertaining to
the disbursement of
the Advances to or on behalf
of Borrower.
(m)
"DRAW REQUEST" - The Draw Request form that is submitted to Lender
when Advances are
requested in the form attached hereto as EXHIBIT A
and incorporated herein by reference.
(n)
"DRAWINGS AND
SPECIFICATIONS" - The drawings and specifications as may
be prepared by the Architect for the Project.
(o)
"ENVIRONMENTAL
INDEMNITY AGREEMENT" - The Environmental Indemnity
Agreement of even date
herewith from Borrower
and Guarantor in favor
of Lender.
(p)
"ENVIRONMENTAL
LAWS" - Any
international,
federal, state or local
statute, law, regulation, order, consent, decree,
judgment, permit,
license, code,
covenant, deed restriction, common law, treaty,
convention, ordinance
or other requirement relating to public health,
safety or the environment, including, without limitation, those
relating to releases,
discharges or emissions to air, water, land or
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groundwater, to the
withdrawal or use of groundwater, to the use and
handling of
polychlorinated
biphenyls or asbestos,
to the disposal,
treatment, storage
or management of hazardous or solid waste or
Hazardous Substances
or crude oil, or any
fraction thereof, or to
exposure to
toxic or hazardous materials, to the handling,
transportation,
discharge or release
of gaseous or liquid
Hazardous
Substances and any regulation, order, notice or demand issued
pursuant
to such law, statute
or ordinance,
in each case
applicable
to the
Mortgaged Property of
Borrower, including without limitation the
following: (i) the Comprehensive Environmental Response,
Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Re-authorization Act
of 1986; (ii) the
Solid Waste Disposal
Act, as
amended by the Resource Conservation and Recovery Act of
1976 and the
Hazardous and Solid
Waste Amendments
of 1984; (iii) the Hazardous
Materials
Transportation Act,
as amended;
(iv) the Federal Water
Pollution
Control Act, as
amended by the Clean Water Act of 1976; (v)
the Safe Drinking Water Act; (vi) the Clean Air Act, as amended;
(vii)
the Toxic Substances
Control Act of 1976; (viii) the Occupational
Safety and Health Act of 1977, as amended; (ix) the Emergency
Planning
and Community
Right-to-Know
Act of 1986; (x) the National
Environmental Policy
Act of 1975; (xi) the Oil Pollution Act of 1990;
and any similar or
implementing
state law;
and any other
state or
federal statute and any further amendments to these laws providing
for
financial
responsibility for cleanup or other actions with respect to
the release or
threatened release of
Hazardous Substances
or crude
oil, or any fraction thereof and all rules and regulations
promulgated
thereunder.
(q)
"EQUITY" - The
difference between the Project Cost and the Commitment,
being the amount
Borrower is
required to invest in the Project in
accordance with the provisions of SECTION 3.1 of this
Agreement.
(r)
"EVENT OF DEFAULT" -
One of the Events of Default specified in SECTION
5.1 hereof.
(s)
"GUARANTOR" - Global
Entertainment Corporation, a Nevada corporation.
(t)
"GUARANTY" - That
certain Guaranty of Completion of even date herewith
executed and delivered by Guarantor.
(u)
"GENERAL CONTRACTOR" -
Hunt Construction Group, Inc.
(v)
"HARD COSTS" - The costs of constructing the Project that are set
forth as Hard Costs on the Project Cost Statement.
(w)
"HAZARDOUS SUBSTANCE"
- Any hazardous or toxic material, substance or
waste, pollutant or
contaminant that is
regulated under any statute,
law, ordinance, rule
or regulation of any local, state, regional or
federal authority having jurisdiction over the Mortgaged
Property of
Borrower, or its use,
including,
but not limited to any material,
substance or waste,
that is: (i)
defined as a
hazardous substance
under any Environmental Laws; (ii) a petroleum hydrocarbon,
including
crude oil or any fraction thereof and all petroleum
products; (iii)
polychlorinated
biphenyls; (iv) lead;
(v) urea formaldehyde; (vi)
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asbestos or asbestos containing materials; (vii) flammable
explosives;
(viii) infectious materials; (ix) radioactive materials; (x)
mold; or
(xi) defined or regulated as a hazardous substance or hazardous waste
under any rules or
regulations
promulgated under any
Environmental
Laws.
(x)
"INSPECTING
ENGINEER" - The inspecting engineer retained by the
Lender: LM Consultants, Inc.
(y)
"LEASE" - Amended and Restated Lease with the Purchase Option
Agreement dated May
30, 2007, made by Borrower as Lessor and WPFD, as
Lessee.
(z)
"LOAN DOCUMENTS" - This Agreement, the Note, the Mortgage, the
Guaranty, the Environmental Indemnity Agreement and all other
security
or collateral
documents executed by Borrower and/or Guarantor in
connection herewith or therewith for the benefit of Lender.
(aa)
"MORTGAGE" - The Deed
of Trust of even date
herewith, executed by
Borrower to Lender creating a first priority mortgage on the
Mortgaged
Property and a
security interest in all of the personal property
located thereon as security for payment of the Note.
(bb)
"MORTGAGED PROPERTY"
- The land and improvements (including the
Project) situated in
Chelan County,
Washington,
and other personal
property located
thereon, as more particularly described in the
Mortgage.
(cc)
"NOTE" - The
promissory note
from Borrower to Lender of even date
herewith in the
original principal amount of FIFTY TWO MILLION
AND
NO/100 DOLLARS ($52,000,000.00).
(dd)
"PERSON" - Natural persons, corporations, limited liability
companies,
limited
liability
partnerships, limited liability limited
partnerships, limited
partnerships, general partnerships, joint stock
companies, joint
ventures,
associations,
companies, trusts,
banks,
trust companies, land
trusts, business trusts or other organizations,
whether or not legal
entities, and governments and agencies and
political subdivisions of those governments.
(ee)
"PROJECT" - The
construction of
Greater Wenatchee
Regional Events
Center on the Mortgaged Property as more fully described in the
Lease,
the Construction Contract and the Drawings and Specifications.
(ff)
"PROJECT BUDGET" - The total cost of completing the Project.
(gg)
"PROJECT COST" -
Approximately
$54,000,000.00
being the estimated
amount necessary to complete the construction of the Project,
including hard and soft costs.
(hh)
"PROJECT COST
STATEMENT"
- The certificate of Borrower in which
Borrower certifies
to Lender the total of all Hard Costs and Soft
Costs necessary
to complete the Project in accordance with the
4
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Drawings and
Specifications, and
certifies to Lender
the amount and
source of Borrower's Equity, all as verified by Inspecting
Engineer.
(ii)
"PROJECT DOCUMENTS" -
Collectively the
Construction
Contract, the
Architect's Contract,
the Drawings and Specifications, the Sworn
Construction
Statement, the Project
Cost Statement, and all other
contracts of Borrower
or the General
Contractor with
respect to the
Project.
(jj)
"SOFT COSTS" - The cost of constructing the Project that are set
forth
as Soft Costs on the Project Cost Statement.
(kk)
"SUBSTANTIAL
COMPLETION" - The date on which General Contractor and
the Architect issue a
Certificate of
Substantial
Completion of the
Project and Borrower
demonstrates
compliance with the
conditions of
SECTION 3.3 of this Agreement.
(ll)
"SWORN CONSTRUCTION
STATEMENT" - The form of document attached hereto
as Exhibit C.
(mm)
"TITLE COMPANY" - Stewart Title Guaranty Company.
(nn)
"WPFD" - Greater
Wenatchee Regional
Events Center Public
Facilities
District, a Washington municipal corporation.
ARTICLE II
COMMITMENT TO MAKE ADVANCES,
DISBURSEMENT PROCEDURES AND DEPOSIT OF FUNDS
Section 2.1 THE ADVANCES. Lender agrees, on the terms and subject to
the
conditions hereinafter set forth, to make Advances to Borrower from
time to time
during the period from the date hereof to the Commitment
Termination Date in
an
aggregate principal
amount of up to and
including the maximum amount of the
Commitment, to pay for
or to reimburse
Borrower or its Affiliates, for the
payment of the costs
actually incurred in
connection
with the Project,
that
shall include but not be limited to costs of permits, licenses,
labor, supplies,
materials, services, equipment and insurance premiums, but shall
not include any
profit to Borrower
acting in the capacity as developer or general contractor.
The obligation of Borrower to repay the Advances shall be evidenced
by the Note,
containing the terms
relating to maturity,
interest rate, and other matters as
set forth therein.
All Advances
shall be disbursed
by the Disbursing Agent
pursuant to the terms and conditions hereof and the Disbursing
Agreement.
As
used herein, the term
"Disburse" or "Disbursement" shall mean the disbursement
of Advances made or to be made by the Disbursing Agent as provided
herein and in
the Disbursing Agreement.
Section 2.2 ADVANCE
REQUIREMENTS. Subject
to the requirements of
SECTION
2.3 below, Advances shall be made as follows:
(a)
INITIAL ADVANCE.
Initial Advance shall
be made in the total amount of
5
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up to approximately
$5,939,744.38
to be used for
closing and other
costs and expenses of the Project.
(b)
CONSTRUCTION
ADVANCES. Construction Advances shall be
made by Lender
in the total amount of up to approximately $46,060,255.62 as provided
in this Agreement. Construction Advances to be used for the
development of the
Project and as otherwise set forth in the Project
Budget.
Section 2.3 DISBURSEMENT PROCEDURES FOR ADVANCES.
(a)
Whenever Borrower desires to obtain an Advance hereunder, such
requests to be made no more frequent than monthly, Borrower shall
submit to Lender and the Disbursing Agent a Draw Request, duly
executed on behalf of Borrower setting forth the information
requested
therein. Each
Draw Request shall be submitted at least ten (10)
business days before the date the Advance is desired. With respect to
Hard Costs, each Draw Request shall be limited to amounts equal to
(i)
the total costs actually incurred and paid or owed by
Borrower to the
date of such Draw Request for work on the Project acceptably
completed, as approved
by Lender, plus (ii) the cost of materials and
equipment not
incorporated
in the Project, but delivered to and
suitably stored at the
Project site,
less (iii) 5 percent
(5%) (or
such lesser hold back
as is authorized
by Lender),
which hold back
shall be retained
by Lender until Substantial Completion of the
Project (the
"RETAINAGE"), and less
prior Advances.
Notwithstanding
anything herein to the contrary, no Advance for material stored at
the
Project site
will be made by Lender
unless Borrower shall advise
Lender of its intention to so store materials prior to their
delivery
and provides suitable
security for such storage. With respect to all
Soft Costs,
each Draw Request shall be limited to the total of
such
costs actually
incurred by Borrower to the date of such Draw Request,
less prior
Advances for such costs. Each Draw Request shall be
accompanied by a certification by the General Contractor that (i) the
Project is being
constructed in
accordance
with the Drawings and
Specifications in a good and workmanlike manner and that the work has
been completed and the materials are in place as indicated in the
Draw
Request, (ii) the undisbursed amount of the Commitment is in an
amount
sufficient to pay the remaining unpaid costs and expenses
anticipated
to complete
the Project, and (iii) such other and further
certificates,
opinions, inspections, reports and other information as
may be requested by
Lender from time to time at its sole discretion.
All Advances will be made in accordance with the amounts assigned to
the various items in the Sworn Construction Statement and the Project
Cost Statement
(as amended
from time to time to
reflect authorized
change orders),
and no Advance will be
made for any amount in excess
of the values assigned such items in the Sworn Construction
Statement
and the Project Cost Statement. Each Draw Request shall constitute
an
affirmation by Borrower that, to its knowledge, all representations
and
warranties set forth
in ARTICLE IV are true and correct as of the
date of such Draw Request.
(b)
At the time of
submission of each Draw Request, Borrower shall submit
to Lender and the Disbursing Agent the following:
6
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(i) A written
lien waiver
with respect to all Hard Costs from
each
Contractor for work
done and materials
supplied by it that were
paid for pursuant to the preceding Draw Request.
(ii) Documentation reasonably acceptable to Lender (receipts,
canceled
checks and the like)
evidencing
payment of all Soft
Costs that
were paid in
connection
with the immediately preceding Draw
Request, excluding
amounts drawn for
payment of interest on the
Advances or fees due to Lender.
(iii)Such other
supporting evidence as
may be requested by Lender or
the Disbursing Agent
to substantiate all payments that are to be
made out of the relevant Draw Request and/or to substantiate
all
payments then made with respect to the Project.
(c)
If on the date an
Advance is desired Borrower has performed all of its
agreements and complied with all requirements therefor to be
performed
or complied with hereunder including satisfaction of all applicable
conditions precedent
contained in ARTICLE III hereof,
Lender shall
transmit to the Disbursing Agent the amount of the requested
Advance,
less amounts
owing to Lender
(which will be applied directly by
Lender), and the Disbursing Agent will disburse such funds pursuant
to
and in accordance with
the terms of the
Disbursing Agreement.
Each
Advance shall bear
interest at the rate provided in the Note from the
date such Advance is transmitted by Lender to the Disbursing
Agent.
Section 2.4
DEPOSIT OF FUNDS BY BORROWER. If Lender shall at any time
determine that the undisbursed amount of the Commitment is less
than the amount
required to pay all
costs and expenses of any kind that may be reasonably
anticipated in connection with the Project, and if Lender shall thereupon
send
written notice
thereof to Borrower specifying the amount required to be
deposited by Borrower with the Disbursing Agent to provide sufficient funds to
complete the Project,
Borrower shall, within twenty (20) calendar days of
receipt of any such
notice, deposit
with the Disbursing Agent the amount of
funds specified
in Lender's notice. Borrower shall also deposit with the
Disbursing Agent,
without demand by Lender, funds equal to any increase in
the
Project Cost resulting from an authorized change order. Borrower
agrees that any
funds deposited with
the Disbursing Agent
shall be disbursed by the Disbursing
Agent before any further disbursements of the Commitment.
Section 2.5 DISBURSEMENTS WITHOUT RECEIPT OF DRAW REQUEST.
Notwithstanding
anything herein to the
contrary, so long as any Event of Default
has occurred
and remains outstanding, Lender, upon written notice to Borrower,
shall have the
irrevocable right at
any time and from time to time to cause an advance of the
Commitment or a
disbursement
of funds that are on
deposit with Lender or
the
Disbursing Agent to
pay principal
or interest on the Note as and when
said
payments become due
and to pay any and all costs and expenses referred to in
SECTION 6.03 hereof, and following the occurrence of an uncured
Event of Default
to pay any and all costs and expenses necessary to complete the Project,
or to
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satisfy any obligation
of Borrower pursuant
to the terms of this
Agreement or
the other Loan Documents, all without receipt of a Draw Request
from Borrower.
Section 2.6 INTEREST RESERVE. A sum in the amount of
($2,329,066.00)
shall
be unfunded and
reserved for the funding of interest owed on the Loan (the
"INTEREST RESERVE"). Funds shall be advanced for the payment of
accrued interest
on Borrower's request, except as provided in SECTION2.05 above. It
is the intent
of the parties hereto,
that all Advances made
pursuant to a Draw Request shall
include, but not be limited to, an Advance from the unfunded
Interest Reserve to
pay interest then due
under the Loan. It is
the further intent of
the parties
hereto that in the event an interest payment is due under the terms of
the Note
but (i) no Draw
Requests has been made; or (ii) a Draw Request has been
submitted such that
the interest payment
cannot be timely made
as part of the
Draw Request, THEN Lender may draw from the Interest Reserve to pay
such accrued
interest then due. If
at any time the
Interest Reserve is
exhausted or Lender
determines, at its
sole discretion,
it is insufficient due to interest rate
adjustments, Borrower will, within 10 calendar days of Lender's
request, deposit
with Lender an amount
sufficient for the funding of interest payments over the
remaining term of the Loan.
Section 2.7 Intentionally Omitted.
Section 2.8 PROJECT CONTINGENCY. A sum in the amount of
$1,252,035.00 shall
be unfunded and reserved for Project Cost overruns.
ARTICLE III
CONDITIONS OF LENDING
Section 3.1 CONDITIONS
PRECEDENT TO LENDING.
The obligation of
Lender to
make the initial Advance hereunder shall be subject to the
condition
precedent
that Borrower shall be in compliance with the conditions contained in SECTION
3.2 and the further
condition precedent
that Lender
shall have
received the
following:
(a)
The Note, Mortgage, Guaranties,
UCC Financing Statements,
Environmental
Indemnity Agreement
and other Loan
Documents to which
Borrower and/or
Guarantor as required hereunder are party duly
executed and
delivered to Lender,
all of which shall be
reasonably
satisfactory to Lender and Lender's legal counsel in form and
content.
(b)
A current appraisal
prepared by a state licensed appraiser approved by
Lender indicating
an appraised
value of the
Mortgaged Property as
follows: minimum
initial value of Land of at least $1,740,000.00, as
well as "as built"
projected appraised value of the Project of at
least $53,100,000.00.
The appraisal shall be
addressed to Lender and
state that it has been
prepared on Lender's
behalf. The form of
the
appraisal and the
appraisal methods shall otherwise be reasonably
satisfactory to Lender and shall conform to all requirements of State
and Federal law. Upon
completion of
construction, at the
expense of
Borrower, the appraiser shall reinspect and recertify the value of
the
Mortgaged Property "as built."
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(c)
A "marked-up
commitment" for a mortgagee's title insurance policy duly
endorsed by the
Title Company that: (i) names Lender as primary
insured in the full principal amount of the Commitment;
(ii) insures
the Mortgage to be a valid first lien on the Mortgaged Property; and
(iii) is free from
exceptions for (1) matters that would be disclosed
by a survey or inspection, (2) mechanics', contractors' or
materialmen's liens
and lien claims, (3) rights and claims of parties
in possession,
(4) easements or
claims of easements not shown by the
public records, and (5) other exceptions not specifically
approved by
Lender and as set forth in EXHIBIT B to the Mortgage. All real estate
taxes are current and all levied and pending assessments not
delinquent as of the date of the Mortgage shall be paid in full.
The
policy shall
include a Form 3.0
zoning endorsement,
an ALTA Form 9
comprehensive
endorsement, and such
other endorsements as Lender may
reasonably require under the circumstances.
(d)
An ALTA survey of the
Mortgaged Property,
satisfactory to Lender
and
the Title Company,
prepared by a registered land surveyor, which will
include the legal description and area of the Mortgaged Property,
show
and certify to the perimeter lot lines, dimensions and vectors, the
location of all
existing footings, foundations and improvements,
utilities, easements,
rights of way,
building set back
lines, curb
lines and encroachments, as may be applicable, and the intended
location of the Project according to the Drawings and
Specifications
to be submitted and approved by Lender as provided herein. Said
survey
shall be prepared for
Lender's and the Title
Company's benefit and
shall be certified by the surveyor in form reasonably acceptable to
Lender and Title Company. The survey shall be updated,
as reasonably
necessary to show the footings or foundations of the Project when
the
footings or foundation
is completed, and shall be updated again to
show the location of the "AS-BUILT" Project prior to the final
disbursement of Loan proceeds.
(e)
Copies of all building
and other permits necessary for construction of
the Project. Lender
shall also receive a certificate of the Architect
or engineer
to the effect that all permits required by any
governmental authority
for construction and
operation of the Project
have been obtained.
(f)
Evidence satisfactory to Lender that the Project
complies with all
building codes
and zoning and subdivision ordinances applicable
thereto, and that the
Project and its use
thereof are in
compliance
with all other state, federal, and local laws and regulations.
(g)
Copies of the contracts between Borrower and the Architect, and
between Borrower and the General Contractor, as well as the contracts
between the
General Contractor and all major subcontractors as
identified on Exhibit B attached hereto. The Construction Contract
shall be a fixed-price or maximum-cost contract. All such contracts
shall be in form reasonably satisfactory to Lender and
Lender's legal
counsel and shall,
together with the Drawings and Specifications, be
assigned to Lender.
The Architect, the
General Contractor,
and any
subcontractors or
other contractors,
if required
by Lender,
shall
consent to such assignments. Borrower shall also provide to Lender
any
contract entered
into by Borrower, or any proposed tenants or
franchisees doing business on the property of Borrower,
directly with
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any contractor,
engineer, architect or
professional
concerning the
provision of materials and/or labor and/or services to the
Project.
(h)
Current financial statements, certified as true and correct by the
party giving
the same. All such financial statements shall (i)
indicate all assets,
liabilities,
contingent liabilities and income,
and (ii) include
separate financial
statements for each
significant
asset
(e.g., if partnership interests are shown as an asset,
the
financial statements
of the partnership shall also be provided). All
financial and credit
information must be
satisfactory
to Lender in
form and substance.
(i)
Satisfactory soil test
borings and soil reports that are acceptable to
Lender.
(j)
Written evidence from the proper municipal authorities and public
utility companies that all utilities, sewage and related services
are
or will be available to the Mortgaged Property upon completion of
the
Project.
(k)
All reciprocal
easement agreements,
maintenance agreements, and other
easements relating
to the Mortgaged Property as Lender or Lender's
legal counsel may require, if any, for parking, access, utility and
other purposes,
all of which
shall be reasonably satisfactory to
Lender and Lender's legal counsel in form and content.
(l) Evidence reasonably satisfactory to Lender that no
petroleum product
or other Hazardous Substance is present on the Mortgaged Property,
and
that no asbestos-containing products, urea-formaldehyde foams or
PCB's
are being used in the construction of the Project. Such evidence
shall
include a Phase I
Environment
Report and a Phase II Environmental
Report, prepared
by a licensed engineer or other qualified
environmental
consultant reasonably
acceptable to Lender. The report
shall be addressed
to Lender and state that it was prepared for
Lender. If the report
indicates that petroleum products or other
Hazardous Substances
are present, the report shall identify such
materials and
shall analyze (including cost and time factors)
recommended methods of
removal. Borrower
warrants that no asbestos
containing-products,
urea-formaldehyde foam
insulation or PCB's will
be used in the construction or equipping of the Project.
(m)
The Sworn Construction Statement, completed and executed by
General
Contractor based on the current Drawings and Specifications as part
of
the Contractor's Sworn Construction Statement of even date
herewith.
(n)
The Project Cost
Statement.
(o)
An Estoppel from WPFD
in form acceptable to Lender.
(p)
Intentionally
Omitted.
(q)
Assignment
of that certain
Amended and Restated
Lease With
Purchase
Option Agreement between Borrower and WPFD dated May 30, 2007.
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<PAGE>
(r)
Evidence prepared by an independent accountant that Borrower has
injected $2,000,000.00 of cash Equity into the Project.
(s)
Evidence of the
financial and legal capacity of the City to
perform
its commitment to guarantee shortfalls in rent payments due
under the
Lease and to
contribute
$4,000,000
of the puchase price if WPFD
exercises its
purchase option under the Lease,
including (without
limiting the generality of the foregoing) current financial
statements
in form acceptable to
Lender, an
acceptable
analysis of the
taxing
capacity of the City,
and an opinion of the City's bond counsel as to
the enforceability of
the Lease and such guarantee, the agreement to
make such contribution
and all related City
obligations with respect
to the Lease.
(t)
Evidence that the developer fee payable to International Coliseum
Company in connection with the Project, in the amount of $250,000,
has
been forfeited.
(u)
Evidence that
Guarantor will subordinate to the Loan the
payment of
$380,000 of its project management fee until Project completion, and
will convert
an additional $200,000 of such fee to be used as
additional contingency
which may be paid upon Borrower reaching
certain construction milestones, provided, however, that any project
management fee in
excess of $580,000 shall be payable in the ordinary
course of business.
(v)
Evidence that BBP Two LLC has agreed to
defer payment of
$971,000 of
Project costs that are to be reimbursed by Borrower until the Loan is
paid in full, and receipt of a subordination of such payment rights
to
the repayment of the Loan.
(w)
Evidence satisfactory to Lender that Borrower has expended or has
deposited with the
Disbursing
Agent not less than
the amount of the
required Equity
in payment of costs and expenses incurred in
connection
with the Project that would be otherwise properly payable
from an Advance,
together with
satisfactory
lien waivers for Hard
Costs paid with such funds.
(x)
Evidence of
stockholder
equity of Guarantor in
a total amount of not
less than
$9,000,000.00
(excluding receivables
from affiliates or
related entities).
Evidence of such tangible net worth shall be
provided on an internally prepared financial statement prepared in
accordance with Generally Accepted Accounting Principles
("GAAP").
(y)
Evidence of liquidity
(in the form of cash or cash equivalents, time
deposits and marketable securities) of Guarantor in a
total amount of
not less than
$3,500,000.00.
Evidence of such liquidity shall be
prepared by a third party acceptable to Lender (via bank statements
or
statements provided by a broker-dealer).
(z)
The Disbursing Agreement, duly executed by the Disbursing Agent,
Borrower and Lender in form and substance acceptable to Lender in its
sole discretion.
(aa)
Delivery of a payment and performance bond from General Contractor,
11
<PAGE>
together with a dual oblige rider naming Lender, in form and
substance
acceptable to Lender in its sole discretion.
(bb)
Payment to Lender of a commitment fee of $780,000.00 to be disbursed
on closing from the loan proceeds.
(cc)
Guarantor will
deliver an irrevocable letter of credit from an
institution and in a
form acceptable
to Lender in the amount of
$1,250,000.00 to serve as additional collateral and which may be
used
to cure an Event of Default.
Section 3.2 FURTHER CONDITIONS PRECEDENT TO ALL ADVANCES. The
obligation of
Lender to make an Advance hereunder including each subsequent
Advance shall be
subject to the condition precedent that Borrower shall be in
compliance with all
conditions set forth in SECTION 3.1 and further conditions
precedent that on the
date of each Advance:
(a)
No Event of Default
hereunder, or event
that would constitute such an
Event of Default but for the requirement that notice be given or that
a period of grace or time elapse, shall have occurred and be
continuing and all
representations and warranties made by Borrower in
ARTICLE IV shall
continue to be true and correct as of the date of
such Advance.
(b)
No determination shall have been made by Lender
that the undisbursed
amount of the
Commitment is less than the amount required to pay all
costs and expenses of any kind that may be anticipated in connection
with the Project; or
if such a determination
