Common use of Approval of Change Orders Clause in Contracts

Approval of Change Orders. Borrower shall permit no deviations (and shall cause Mortgage Borrower not to permit any deviations) from the Plans and Specifications during construction without the prior approval of Lender which approval shall not be unreasonably withheld conditioned or delayed; provided, however, that Borrower may or may allow Mortgage Borrower to make changes without Lender’s prior approval so long as (a) such changes do not exceed ten percent (10%) of the amount of the applicable contract, (b) such changes do not exceed in the aggregate $1,200,000.00, (c) such changes do not cause any Line Item in the Project Cost Budget to be exceeded (after taking into account use of the Building Loan Contingency to the extent permitted under and reallocations under Section 2.1.7(a) of the Building Loan Agreement, reallocations attributable to cost savings under Section 2.1.7(b) of the Building Loan Agreement, and other reallocations approved by Lender in its sole discretion), (d) Borrower uses reasonable efforts to deliver, or to cause Mortgage Borrower to deliver, to Lender and Construction Consultant prior notice of such change orders or, if Borrower is unable to deliver prior notice, Borrower shall, or shall cause Mortgage Borrower to submit to Lender and Construction Consultant copies of all change orders entered into with respect to the Project Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Lender and Construction Consultant pursuant to this Agreement and/or the Building Loan Agreement, and (e) such changes will not materially change the net rentable square feet of commercial space to be contained in the Improvements or the net rentable or saleable square feet of residential space to be contained in the Improvements, or the basic layout of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications, and (f) such changes are non-material field changes, which do not affect the scope of the Project Improvements. If Lender’s approval is necessary with respect to any change order, Borrower shall give Lender a written request for such approval. If Lender fails to either approve or disapprove of such request within five (5) days of receipt thereof, such change order shall be deemed approved if Lender fails to respond within five (5) days of receipt of a second request by Borrower, which request shall be in an envelope labeled “Priority” and delivered to Lender by overnight delivery and which request shall state at the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED WITHIN FIVE (5) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDER.”

Approval of Change Orders. Borrower Except as provided in this Section 3.15, Borrowers will not amend, alter or change (pursuant to Change Order, amendment or otherwise) the Plans and Specifications, the Loan Budget or any Major Contract unless the same shall permit no deviations have been approved in advance in writing by Lender, by all applicable Governmental Authorities and by each surety under the Payment and Performance Bonds (and if required thereunder). Borrowers will provide to Lender upon execution, copies of approved Change Orders with respect to any Major Contract. Notwithstanding the foregoing, Borrowers shall cause Mortgage Borrower not be allowed to permit any deviations) from make changes in the Plans and Specifications during construction without the prior approval consent of Lender which approval shall not be unreasonably withheld conditioned or delayed; provided, however, that Borrower may or may allow Mortgage Borrower upon and subject to make changes without Lender’s prior approval so long as all of the following conditions and requirements: (a) The Change Order is not a Material Change Order; (b) Until such changes do time as the Project is forty percent (40%) complete as reasonably determined and certified by the Construction Consultant, (i) the combination of (A) Hard Costs paid for by Borrowers out of their own (or an Affiliate’s) funds exclusive of the Loan and (B) Hard Costs paid for out of the Contingency (Hard Costs) Line Item in accordance with the terms of this Agreement, does not exceed ten percent (10%) 50% of the original amount of the applicable contractContingency (Hard Costs) Line Item set forth in the Loan Budget, and/or (bii) such changes do the combination of (1) Soft Costs paid for by Borrowers out of their own (or an Affiliate’s) funds exclusive of the Loan and (B) Soft Costs paid for out of the Contingency (Soft Costs) Line Item in accordance with the terms of this Agreement, does not exceed 50% of the original amount of the Contingency (Soft Costs) Line Item set forth in the aggregate $1,200,000.00Loan Budget, it being acknowledged and agreed that this condition shall be deemed null and void once the Project is forty percent (40%) complete as reasonably determined and certified by the Construction Consultant; (c) such changes do Such proposed Change Order, together with all other Change Orders theretofore entered into with respect to the Project, will not increase the guaranteed maximum price of any Major Contract in excess of $2,500,000.00 over the original amount; (d) Such proposed Change Order will not cause any Line Item in the Project Cost Loan Budget to be exceeded (after taking into account use of the Building Loan Contingency Line Items to the extent permitted under and Section 3.10 hereof, reallocations under Section 2.1.7(a) of the Building Loan Agreement, reallocations attributable to cost savings under Section 2.1.7(b) of the Building Loan Agreement, 3.9 hereof and any other reallocations approved by Lender in its sole and absolute discretion), unless Borrowers eliminate the Shortfall caused thereby in accordance with the provisions of Section 3.12 hereof; (de) Borrower uses reasonable efforts Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not, in any material fashion, alter or change (A) any structural components, construction design, layout, scope and/or square footage of the Project, and/or (B) the structural integrity, utility, quality of materials and/or asset quality of the Project; (f) Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not result in any material adverse differences in the Construction Schedule submitted to deliverand approved by Lender; and (g) With respect to any Change Order which does not satisfy one or more of the foregoing conditions in this Section 3.15, or which pursuant to cause Mortgage such provisions require Lender’s approval, Borrower to deliver, shall have submitted to Lender and the Construction Consultant prior notice Consultant, and the applicable Major Contractors and/or other Trade Contractors, the requested change, together with changes in the Plans and Specifications necessary to accomplish such change, a certificate of the Architect in regard to same, and a Change Order to the applicable Trade Contractor reflecting such change; and Lender shall have received the approval of such change orders or, if Borrower is unable to deliver prior notice, Borrower shall, or shall cause Mortgage Borrower to submit to Lender and by the Construction Consultant copies of all change orders entered into with respect to the Project Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Lender and Construction Consultant pursuant to this Agreement and/or the Building Loan AgreementConsultant, and (e) such changes will not materially change the net rentable square feet of commercial space to be contained in the Improvements or the net rentable or saleable square feet of residential space to be contained in the Improvements, or the basic layout of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications, and (f) such changes are non-material field changes, which do not affect signed Change Order from the scope applicable Trade Contractor reflecting the increase in cost of construction of the Project Improvements. and/or the extension of time for completion of the work to be performed under the applicable Major Contract or other contract or subcontract with a Trade Contractor, and Borrowers shall have received Lender’s written approval thereof, which approval shall not be unreasonably withheld. (h) If a Change Order is permitted without Lender’s approval as provided in this Section 3.15 or is necessary with respect to any change orderapproved by Lender as required by this Section 3.15, Borrower shall give Lender a written request for such approval. If Lender fails to either approve or disapprove of such request within five (5) days of receipt thereof, such change order then the Loan Budget shall be deemed approved if Lender fails amended by such Change Order and all references to respond within five (5) days of receipt of a second request by Borrower, which request the Loan Budget contained in this Agreement and the other Loan Documents shall be in an envelope labeled “Priority” and delivered deemed to Lender by overnight delivery and which request shall state at refer to the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED WITHIN FIVE (5) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDERLoan Budget as so amended.”

Approval of Change Orders. During the prosecution of the Renovations, Borrower shall permit no deviations (and shall cause Mortgage Borrower not to permit any deviationsdeviations from or amendments or change orders to (i) from the Plans and Specifications during construction Approved Renovation Budget and/or (ii) Attachment B to the Franchise Agreement, and/or (iii) any contract or purchase order relating to the Renovations (collectively, a “Change Order”) without the prior approval written consent of Lender Trustee, excepting only Change Orders for changes which approval shall not be unreasonably withheld conditioned or delayed; provided, however, that Borrower may or may allow Mortgage Borrower to make changes without Lender’s prior approval so long as (a) such changes do not exceed ten percent (10%1) materially alter the scope, quality, configuration of the amount Renovations, and (2) result in the cost of the applicable contractRenovations, in the aggregate, exceeding the amount therefor set forth in the Approved Renovation Budget or (b) such changes do not exceed in increase the aggregate $1,200,000.00, (c) such changes do not cause any Line Item in the Project Cost Budget to be exceeded (after taking into account use cost of the Building Loan Contingency to the extent permitted under and reallocations under Section 2.1.7(aRenovations by more than (1) of the Building Loan Agreement, reallocations attributable to cost savings under Section 2.1.7(bTwenty-Five Thousand Dollars ($25,000.00) of the Building Loan Agreement, and other reallocations approved by Lender in its sole discretion), (d) Borrower uses reasonable efforts to deliver, or to cause Mortgage Borrower to deliver, to Lender and Construction Consultant prior notice of such change orders or, if Borrower is unable to deliver prior notice, Borrower shall, or shall cause Mortgage Borrower to submit to Lender and Construction Consultant copies of all change orders entered into with respect to the Project Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Lender and Construction Consultant pursuant to this Agreement and/or the Building Loan Agreement, and (e) such changes will not materially change the net rentable square feet of commercial space to be contained in the Improvements or the net rentable or saleable square feet of residential space to be contained in the Improvements, or the basic layout of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications, and (f) such changes are non-material field changes, which do not affect the scope of the Project Improvements. If Lender’s approval is necessary with respect to any change orderone item or (2) Fifty Thousand Dollars ($50,000.00) in the aggregate for all changes in excess of the amount therefor set forth in the Approved Renovation Budget, provided Borrower shall give Lender a written request for (y) contemporaneously therewith deposit into the PIP Pledged Account an amount sufficient to cover such approvalincrease(s), and (z) promptly provide to Trustee copies of all Change Orders, whether or not Trustee’s consent thereto is required. If Lender fails Trustee shall not, in any event, be required to either approve or disapprove of review any proposed change unless Trustee has received all documents necessary, in Trustee’s judgment, to review such request within five (5) days of receipt thereofChange Order, including the proposed Change Order, cost estimates, revisions to the Approved Renovation Budget and/or Attachment B to the Franchise Agreement, and evidence that all other persons whose consent to such change order shall be deemed approved if Lender fails is required, including, but not limited to respond within five (5) days of receipt of a second request by Borrowerthe Franchisor and any Governmental Authorities, which request shall be in an envelope labeled “Priority” and delivered to Lender by overnight delivery and which request shall state at the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED WITHIN FIVE (5) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDERhave consented thereto.”

Approval of Change Orders. Borrower Except as provided in this Section 3.15, Borrowers will not amend, alter or change (pursuant to Change Order, amendment or otherwise) the Plans and Specifications, the Loan Budget or any Major Contract unless the same shall permit no deviations have been approved in advance in writing by Lender, by all applicable Governmental Authorities and by each surety under the Payment and Performance Bonds (and if required thereunder). Borrowers will provide to Lender upon execution, copies of approved Change Orders with respect to any Major Contract. Notwithstanding the foregoing, Borrowers shall cause Mortgage Borrower not be allowed to permit any deviations) from make changes in the Plans and Specifications during construction without the prior approval consent of Lender which approval shall not be unreasonably withheld conditioned or delayed; provided, however, that Borrower may or may allow Mortgage Borrower upon and subject to make changes without Lender’s prior approval so long as all of the following conditions and requirements: (a) such changes do The Change Order is not exceed ten percent (10%) of the amount of the applicable contract, a Material Change Order; (b) such changes do not exceed in the aggregate $1,200,000.00, Intentionally Deleted; (c) such changes do Such proposed Change Order, together with all other Change Orders theretofore entered into with respect to the Project, will not increase the guaranteed maximum price of any Major Contract in excess of $2,500,000.00 over the original amount; (d) Such proposed Change Order will not cause any Line Item in the Project Cost Loan Budget to be exceeded (after taking into account use of the Building Loan Contingency Line Items to the extent permitted under and Section 3.10 hereof, reallocations under Section 2.1.7(a) of the Building Loan Agreement, reallocations attributable to cost savings under Section 2.1.7(b) of the Building Loan Agreement, 3.9 hereof and any other reallocations approved by Lender in its sole and absolute discretion), unless Borrowers eliminate the Shortfall caused thereby in accordance with the provisions of Section 3.12 hereof; (de) Borrower uses reasonable efforts Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not, in any material fashion, alter or change (i) any structural components, construction design, layout, scope and/or square footage of the Project, and/or (ii) the structural integrity, utility, quality of materials and/or asset quality of the Project; (f) Such proposed Change Order, together with all other Changes Orders in the aggregate, shall not result in any material adverse differences in the Construction Schedule submitted to deliverand approved by Lender; (g) With respect to any Change Order which does not satisfy one or more of the foregoing conditions in this Section 3.15, or which pursuant to cause Mortgage such provisions require Lender’s approval, Borrower to deliver, shall have submitted to Lender and the Construction Consultant prior notice Consultant, and the applicable Major Contractors and/or other Trade Contractors, the requested change, together with changes in the Plans and Specifications necessary to accomplish such change, a certificate of the Architect in regard to same, and a Change Order to the applicable Trade Contractor reflecting such change; and Lender shall have received the approval of such change orders or, if Borrower is unable to deliver prior notice, Borrower shall, or shall cause Mortgage Borrower to submit to Lender and by the Construction Consultant copies of all change orders entered into with respect to the Project Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Lender and Construction Consultant pursuant to this Agreement and/or the Building Loan AgreementConsultant, and (e) such changes will not materially change the net rentable square feet of commercial space to be contained in the Improvements or the net rentable or saleable square feet of residential space to be contained in the Improvements, or the basic layout of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications, and (f) such changes are non-material field changes, which do not affect signed Change Order from the scope applicable Trade Contractor reflecting the increase in cost of construction of the Project Improvements. If and/or the extension of time for completion of the work to be performed under the applicable Major Contract or other contract or subcontract with a Trade Contractor, and Borrowers shall have received (i) Lender’s written approval thereof, which approval shall not be unreasonably withheld and (ii) in the event of a Material Change Order relating to a change in the design of the Project, First Mezzanine Lender’s approval is necessary with respect to any change order, Borrower shall give Lender a written request for such approval. If Lender fails to either approve or disapprove of such request within five (5) days of receipt thereof, such change order which pursuant to the terms of the First Mezzanine Loan Agreement shall not be unreasonably withheld; and (h) If a Change Order is permitted without Lender’s approval as provided in this Section 3.15 or is approved by Lender as required by this Section 3.15, then the Loan Budget shall be deemed approved if Lender fails amended by such Change Order and all references to respond within five (5) days of receipt of a second request by Borrower, which request the Loan Budget contained in this Agreement and the other Loan Documents shall be in an envelope labeled “Priority” and delivered deemed to Lender by overnight delivery and which request shall state at refer to the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED WITHIN FIVE (5) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDERLoan Budget as so amended.”

Approval of Change Orders. Borrower shall permit no deviations (and shall cause Mortgage Borrower not to permit any deviations) from the Plans and Specifications during construction without the prior approval of Lender which approval Developer shall not be unreasonably withheld conditioned required to obtain Authority Executive Director approval of any change orders or delayed; providedother revisions or modifications to the Construction Drawings, however, that Borrower may or may allow Mortgage Borrower to make changes without Lender’s prior approval so long as each change order, revision, or modification is consistent with the approved Design Development Drawings does not cause any value engineering not previously authorized by Authority and does not affect materially the design, materials, and architectural quality and integrity of the Project, except that Developer shall be required to obtain Authority Executive Director approval to the extent such change order, revision, or modification will result in a cost adjustment which, cumulatively with all other change orders, revisions, and modifications, exceeds the amount set forth as the contingency line item in the approved Final Budget for the Project. Notwithstanding the immediately preceding sentence, Authority shall have the right to review any and all material changes, revisions or modifications to the Construction Drawings and/or any and all material change orders to the Construction Contract with the General Contractor which are approved by Developer. nor City shall be responsible to Developer or to any third parties in any way for (a) such changes do not exceed ten percent (10%) of any defects in the amount of the applicable contractDevelopment Plans, (b) such changes do not exceed any structural or other defects in any work done according to the aggregate $1,200,000.00approved Development Plans, nor (c) such changes do not cause any Line Item delays caused by the review and approval established by this Section 302. Developer shall hold harmless, indemnify and defend the Indemnitees from and against any claims or suits for damages to property or injuries to persons (including death) arising out of or in any way relating to defects, latent or patent, in the Project Cost Budget Development Plans, or the actual construction e (3) competitive bids from icit no fewer than thre ng to the appro Project, including, without ut of or in any way relating work and improvements comprising the Governmental Requirements, or arising o and/or improvements completed accordi limitation, the violation of any to any defects in any work done ved Development Plans. or the General Contractor, as qualified, licensed, insured, and bonded Subcontractors for each portion of the construction work to be exceeded (after taking into account use separately contracted for by each Developer or the General Contractor, as applicable, and Developer shall select the Subcontractor(s) that have submitted the lowest responsible and responsive bid for each such separately contracted-for portion of the Building Loan Contingency Project. Authority shall have every reasonable right and opportunity to the extent permitted under and reallocations under Section 2.1.7(a) of the Building Loan Agreementreview all materials, reallocations attributable to cost savings under Section 2.1.7(b) of the Building Loan Agreementbid packages, and other reallocations approved related documents and to observe and attend all stages of and meetings related to such competitive bidding process, including without limitation a right to review the invitation to bidders and each submitted bid package and the right to be present when each bid is opened by Lender in its sole discretion), (d) Borrower uses reasonable efforts Developer and/or the General Contractor and all selected Subcontractors shall be reasonably acceptable to deliver, or to cause Mortgage Borrower to deliver, to Lender and Construction Consultant prior notice of such change orders or, if Borrower is unable to deliver prior notice, Borrower shall, or Authority Executive Director. Developer shall cause Mortgage Borrower to submit to Lender and Construction Consultant provide copies of all change orders entered into with respect documents and other information reasonably necessary or appropriate to the Project Improvements within fifteen (15) days after the same are entered into, irrespective of whether the same require the prior approval of Lender and Construction Consultant permit Authority to verify that Developer has solicited competitive bids from such qualified contractors pursuant to this Agreement and/or Section 302 and selected the Building Loan Agreementlowest responsible and responsive Subcontractors as required herein, including copies of the invitation to bidders, all documents distributed to potential bidders by Developer, and (e) such changes will not materially change all submissions received from bidding contractors in response thereto. Developer shall also submit to Authority evidence regarding each entity serving and/or contracting as the net rentable square feet of commercial space to be contained in the Improvements or the net rentable or saleable square feet of residential space to be contained in the Improvements, or the basic layout Subcontractor for each portion of the Improvements, or involve the use of materials, furniture, fixtures and equipment that will not be at least equal in quality to the materials, furniture, fixtures and equipment originally specified in or required by the approved Plans and Specifications, and (f) such changes are non-material field changes, which do not affect the scope construction of the Project Improvements. If Lender’s approval is necessary and all other on-site and off-site improvements required to be constructed in connection therewith in accordance with respect the Scope of Development, the Entitlement to any change orderbe approved by City, Borrower shall give Lender a written request for such approval. If Lender fails to either approve or disapprove of such request within five (5) days of receipt thereofand the Development Plans, such change order shall be deemed approved if Lender fails to respond within five (5) days of receipt of a second request including all required licenses, certifications, insurance, etc., as reasonably requested by Borrower, which request shall be in an envelope labeled “Priority” and delivered to Lender by overnight delivery and which request shall state at the top of the first page in bold lettering “LENDER’S RESPONSE IS REQUIRED WITHIN FIVE (5) DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A LOAN AGREEMENT BETWEEN THE UNDERSIGNED AND LENDERAuthority Executive Director.”