Exhibit 10.8
CONSTRUCTION-TERM LOAN AGREEMENT
by and among
▇▇▇▇▇▇▇▇ FINANCIAL GROUP, LLC,
a Delaware limited liability company
and
WENATCHEE EVENTS CENTER, LLC,
a Washington limited liability company
TABLE OF CONTENTS
Page
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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
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
CONSTRUCTION-TERM LOAN AGREEMENT
THIS CONSTRUCTION-TERM LOAN AGREEMENT ("AGREEMENT") is made and entered
into this __ day of August 2007, by and among ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(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" - ▇▇▇▇▇▇▇ 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" - ▇▇▇▇ 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
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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" - ▇▇▇▇▇▇▇ 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
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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:
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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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(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,
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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 has been made and notice
thereof sent to Borrower, Borrower has deposited the necessary funds
with the Disbursing Agent or Lender in accordance with SECTION 2.3
hereof.
(c) The disbursement requirements of SECTION 2.2 hereof and of the
Disbursing Agent set forth in the Disbursing Agreement have been
satisfied.
(d) If required by Lender or Disbursing Agent, Lender and the Disbursing
Agent shall be furnished with an updated Sworn Construction Statement
for the Project.
(e) Borrower shall have provided to Lender such evidence of compliance
with all applicable provisions of this Agreement as Lender may
reasonably request.
(f) No license or permit necessary for the construction of the Project
shall have been revoked or the issuance thereof subjected to challenge
before any court or other governmental authority having or asserting
jurisdiction thereover.
Section 3.3 CONDITIONS PRECEDENT TO THE FINAL ADVANCE. The obligation of
Lender to make the final Advance and to release the Retainage shall be subject
to the condition precedent that Borrower shall be in compliance with all
conditions set forth in SECTIONS3.1 and 3.2 and, further, that the following
conditions shall have been satisfied:
(a) The Project, including all landscape and parking requirements, has
been substantially completed in accordance with the Drawings and
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Specifications and evidenced by a Certificate of Completion delivered
to Lender and Lender shall have received a Certificate of Completion
from the General Contractor and the Architect certifying that (i) the
construction of the Project has been substantially completed in
accordance with the Drawings and Specifications (with the exception of
any minor items ["PUNCH LIST ITEMS"]) (ii) all labor, services,
materials and supplies used in the Project have been paid for or will
be paid for from the proceeds of the final Advance and (iii) the
completed Project conforms with all applicable zoning, land use
planning, building and environmental laws and regulations of the
governmental authorities having jurisdiction over the Project and the
Mortgaged Property. The General Contractor shall also deliver to
Lender a list of Punch List Items acceptable to Lender, specifying
dates by which the Punch List Items shall be completed, together with
General Contractor's written contract to complete the Punch List Items
as specified. The amount of the final Advance and/or the Retainage to
be released shall be reduced by an amount equal to110% of the
scheduled value of the Punch List Items, which sum shall be held by
Lender pending the completion of the Punch List Items to the
satisfaction of Lender.
(b) Lender has received each of the following documents and approvals,
each of which shall be satisfactory to Lender and Lender's legal
counsel:
(i) An as-built survey;
(ii) A final Sworn Construction Statement executed by the General
Contractor and Borrower;
(iii)A final Certificate of Occupancy or equivalent issued by the
appropriate municipal or governmental inspecting authority;
(iv) All necessary and appropriate Inspecting certifications;
(v) An approval for disbursement from the Inspecting Engineer after
its final inspection of the Project.
(vi) A title endorsement from the Title Company that reflects the
absence of any liens or other matters affecting title that are
objectionable to the Lender.
(vii)Final lien waivers executed by the General Contractor and all
subcontractors.
Section 3.4 INSURANCE. Borrower shall obtain and shall continuously
maintain thereafter the following policies of insurance:
DURING CONSTRUCTION AND PRIOR TO COMPLETION
BUILDER'S RISK INSURANCE - Builder's Risk Insurance written on a completed
value basis in an amount equal to the full replacement cost of the building
and improvements at the date of completion with coverage available on the
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so-called non-reporting "all risk" form of policy, including coverage
against collapse and water damage, with standard non-contributing mortgagee
clauses, such insurance to be in such amounts and form and written by such
companies as shall be approved by Lender which approval shall not be
unreasonably withheld, conditioned or delayed, and the insurance
certificates evidencing such policies (together with appropriate
endorsement thereto, evidence of payment of premiums thereon and written
agreements by the insurer or insurers therein to give Lender thirty (30)
days' prior written notice of any intention to cancel).
CONTRACTOR'S LIABILITY - Contractor's Comprehensive General Liability
Insurance [including operations, product liability, contingent liability
operations, operations of subcontractors, completed operations, contractual
liability insurance and comprehensive automobile liability insurance
(including hired and non-owned liability)] and with combined single limit
and general aggregate coverage for personal and bodily injury and property
damage of at least $1,000,000.00 for each occurrence, $2,000,000.00 general
aggregate and with $2,000,000.00 excess liability coverage.
WORKER'S COMPENSATION - Statutory worker's compensation coverage in the
required amounts.
FLOOD - Flood insurance if any part of the Mortgaged Property now (or
subsequently determined to be) is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards
and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (and amendment or successor act thereto) in an
amount at least equal to the lesser of the full replacement cost of all
buildings and equipment on the Mortgaged Property, the outstanding
principal amount of the Note or the maximum limited of coverage available
with respect to the buildings and equipment under said Act;
AFTER COMPLETION
ALL RISK - All risk/open perils special form property insurance with
extended coverages including any building contents, sprinkler coverage,
Contingent Operations of Building Laws/Ordinance or Law Endorsement
(including demolition cost, loss to undamaged portions of any buildings and
increased cost of construction) with limits of 100% replacement cost and
with no co-insurance provision or if the insurance carrier requires,
co-insurance provisions with an agreed amount endorsement in amount
acceptable to Lender, and with no exclusions for terrorism or terrorist
acts.
BOILER AND PRESSURE VESSELS - Insurance against loss or damage from i)
leakage of sprinkler systems and ii) explosion of steam boilers, air
conditioning equipment, high pressure piping, machinery and equipment,
pressure vessels or similar apparatus now or hereafter installed in any
improvements on the Mortgaged Property and including broad form boiler and
machinery insurance (without exclusion for explosion) covering all boilers
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or other pressure vessels, machinery and equipment (including electrical
equipment, sprinkler systems, heating and air conditioning equipment,
refrigeration equipment and piping) located in, on or about the Mortgaged
Property and any improvements thereon in an amount at least equal to the
full replacement cost of such equipment and the building or buildings
housing the same;
RENTS/INCOME - Rents Loss or Business Interruption insurance covering risk
of loss due to the occurrence of any hazards insured against under the
required fire and extended coverage insurance in an amount equal to one (1)
year's loss of income as such income may change from time to time due to
changes in income from the Mortgaged Property;
FLOOD - Flood insurance if any part of the Mortgaged Property now (or
subsequently determined to be) is located in an area identified by the
Federal Emergency Management Agency as an area having special flood hazards
and in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (and amendment or successor act thereto) in an
amount at least equal to the lesser of the full replacement cost of all
buildings and equipment on the Mortgaged Property, the outstanding
principal amount of the Note or the maximum limited of coverage available
with respect to the buildings and equipment under said Act;
CGL - Commercial general public liability insurance (including product
liability, completed operations, contractual liability, host liquor
liability, broad form property damage, and personal injuries, including
death resulting therefrom) and with combined single limit and general
aggregate coverage for personal and bodily injury and property damage of at
least $1,000,000.00 for each occurrence, $2,000,000.00 general aggregate
and with $2,000,000.00 excess liability coverage.
Maximum deductible on all coverages and policies shall be no greater than
$10,000.00. The insurance carrier must be rated A, Class XII, or better, by
Best's Rating Service. Such insurance policies shall be written on forms and
with insurance companies satisfactory to Lender, shall be in amounts sufficient
to prevent Borrower from becoming a co-insurer of any loss thereunder, shall
insure Lender as a first mortgagee on the casualty and business
interruption/loss of rents coverage under a standard mortgagee clause and shall
name Lender as an "additional insured" on all required liability coverages and
policies. Insurance certificates evidencing such insurance and evidence of
payment of premiums thereon and written agreements by the insurer or insurers
therein to give Lender thirty (30) days' prior written notice of any intention
to cancel. If no such copy is available, Lender will accept a binder for a
period not to exceed ninety (90) days. Borrower shall, within thirty (30) days
prior to the expiration of any such policy, deliver insurance certificates
evidencing the renewal of such insurance together with evidence of the payment
of current premiums therefor. Any vacancy, change of title, tenant occupancy or
use, physical damage, additional improvements or other factors affecting any
insurance contract must be promptly reported to Lender. All binders,
certificates of insurance, and original or certified copies of policies must
name Borrower as a named insured, or as an additional insured, must include the
complete and accurate property address and must bear the original signature of
the issuing insurance agent. In the event of a foreclosure or trustee's sale
under the Mortgage or any acquisition of the Mortgaged Property by Lender all
15
such policies and any proceeds payable therefrom, whether payable before or
after a foreclosure sale, or during the period of redemption, if any, shall
become the absolute property of Lender to be utilized at its discretion. In the
event of foreclosure or the failure to obtain and keep any required insurance
Borrower empowers Lender to effect the above insurance upon the Mortgaged
Property at Borrower's expense and for the benefit of Lender in the amounts and
types aforesaid for a period of time covering the time of redemption from sale,
and if necessary therefore, to cancel any or all existing insurance policies.
Borrower agrees to pay Lender such fees as may be permitted under applicable law
for the reasonable costs incurred by Lender in determining, from time to time,
whether the Mortgaged Property are located within an area having special flood
hazards. Such fees shall include the fees charged by any organization providing
for such services.
Section 3.5 CASUALTY/DESTRUCTION. In the event of any fire, accident or
other casualty causing loss, damage or destruction to the Mortgaged Property, or
any part thereof, any and all insurance proceeds received in respect thereof in
excess of $100,000.00 shall be held by Lender in trust, so long as no Event of
Default has occurred and is continuing, and shall be made available to Borrower
and disbursed from time to time to Borrower and/or its Affiliates to repair and
restore any such damage pursuant to Lender's disbursement procedures which are
generally utilized by Lender for construction loans to its customers.
Section 3.6 NO WAIVER. The making of any Advance prior to fulfillment of
any condition thereof shall not be construed as a waiver of such condition, and
Lender reserves the right to require fulfillment of any and all such conditions
prior to making any subsequent Advance.
ARTICLE IV
WARRANTIES, REPRESENTATIONS AND COVENANTS
OF BORROWER
Section 4.1 REPRESENTATIONS AND WARRANTIES. Borrower and Guarantor
represent and warrant as follows:
(a) The Loan Documents to which Borrower is and/or Guarantor are party
have been duly executed and delivered to Lender by Borrower and/or
Guarantor, as applicable, and each Loan Document constitutes the
legal, valid and binding obligations of Borrower and/or Guarantor
enforceable in accordance with the terms thereof (subject, as to
enforceability, to limitations resulting from bankruptcy, insolvency
and other similar laws affecting creditors' rights generally).
(b) The Project and the intended use thereof for the purpose and in the
manner contemplated by this Agreement to Borrower's and Guarantor's
knowledge are permitted by and comply in all material respects with
all presently applicable use or other restrictions and requirements in
prior conveyances, zoning ordinances and all development, pollution
control, water conservation, environmental and other laws,
regulations, rules and ordinances of the United States and the State
of Washington and the respective agencies thereof, and the political
subdivision in which the Mortgaged Property is located.
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(c) There is no suit, action or proceeding pending or, to the knowledge of
Borrower and/or Guarantor threatened against or affecting Borrower
and/or Guarantor before or by any court, arbitrator, administrative
agency or other governmental authority that if adversely determined
would materially and adversely affect Borrower and/or Guarantor, or
the businesses, properties, operations, assets or condition (financial
or otherwise) of Borrower and/or Guarantor or the validity of any of
the transactions contemplated by the Loan Documents, or Borrower's
and/or Guarantor's ability to perform the obligations hereunder or
thereunder or as contemplated hereby or thereby.
(d) Borrower and Guarantor have filed all federal and state tax returns
and informational reports required to be filed, which returns properly
reflect the taxes owed by them for the period covered thereby and
Borrower and Guarantor have paid all taxes that are due pursuant to
said returns and paid all present installments of any assessments,
fees and other governmental charges upon it or upon its property.
(e) No consent, approval or authorization of or permit or license from or
registration with or notice to any federal or state regulatory
authority or any third party, to Borrower's and Guarantor's knowledge,
is required in connection with the making or the performance of the
Loan Documents, the Project, or with respect to any other aspect of
the Project or the Mortgaged Property, or, if so required, such
consent, approval, authorization, permit or license has been requested
and obtained or such registration made or notice given or such other
appropriate action taken on or prior to the date hereof (other than
with respect to the occupancy of the Mortgaged Property that cannot be
obtained until completion of the Project) except for interim
certificates, permits and approvals to be issued during the course of
construction.
(f) Borrower is not and Guarantor is not in default of a material
provision under any material agreement, instrument, decree or order to
which either is a party or to which any parties' property are bound or
affected.
(g) There has been no material adverse change in the financial condition
of Borrower or Guarantor since the date of certification of Borrower's
and Guarantor's financial statements previously delivered to Lender.
Section 4.2 COVENANTS. On and after the date hereof and until payment in
full of the Note and payment and performance of all other obligations of
Borrower hereunder, and so long as any portion of the Loan referenced herein
remain in effect, Borrower agrees as follows:
(a) The Mortgaged Property shall comply with all applicable restrictions,
conditions, ordinances, regulations and laws of governmental
departments and agencies having jurisdiction over the Mortgaged
Property, and shall not violate any private restrictions or covenants
or encroach upon or interfere with easements affecting the Mortgaged
Property, and that Borrower will commence and carry on continuously,
diligently and with reasonable dispatch, the construction of the
Project in conformance to the Drawings and Specifications, free from
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all mechanic's, laborer's and material man's liens and in a good and
workmanlike manner, and complete the same prior to the maturity date
of the Note.
(b) To keep, perform, enforce and maintain in full force and effect all of
the terms, covenants, conditions and requirements of the Project
Documents (other than immaterial terms approved by Lender in the
reasonable exercise of its discretion); not to amend, modify,
supplement, terminate, cancel or waive any of the terms, covenants,
conditions or requirements of any of said documents without the prior
written consent of Lender; and to execute and deliver such amendments,
modifications, supplements and extensions of said documents as may be
reasonably requested by Lender.
(c) To use all commercially reasonable efforts to require the General
Contractor and each Contractor to comply with all rules, regulations,
ordinances and laws bearing on its conduct in the construction of the
Project.
(d) To furnish to Lender as soon as possible and in any event within ten
(10) days after Borrower has obtained knowledge of the occurrence of
an event that would constitute an Event of Default hereunder or a
violation of any of the covenants or obligations of Borrower under
this Agreement or that would cause any of the representations or
warranties hereunder to be false or misleading in any respect, or an
event that with the giving of notice or lapse of time or both would
constitute an Event of Default, that is continuing on the date of such
statement, in which case Borrower shall deliver a signed statement
setting forth the details of such violation or event and the action
that has been taken, is being taken, or that Borrower proposes to
take, to correct the same.
(e) To hold Lender harmless, and Lender shall have no liability or
obligation of any kind to Borrower, creditors of Borrower or any third
party, in connection with any defective, improper or inadequate
workmanship performed in or about, or materials supplied to the
Mortgaged Property, or any mechanic's, supplier's or material man's
liens arising as a result of such defective, improper or inadequate
workmanship or materials, and upon Lender's request, to replace or
cause to be replaced, any such defective, improper or inadequate
workmanship or materials.
(f) To pay and discharge all taxes, assessments and governmental charges
or levies imposed upon Borrower or upon its income or profits, or upon
its assets or properties, prior to the date on which penalties attach
thereto, and all lawful claims that, if unpaid, might become a lien or
charge upon the property or assets of Borrower; provided, however,
that Borrower shall not be required to pay any such tax, assessment,
charge, levy or claim, the payment of which is being contested in good
faith and by proper proceedings and for which it shall have set aside
adequate reserves.
(g) To keep the Mortgaged Property and all improvements, buildings and
fixtures thereon in good working order and condition.
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(h) As soon as available, and within one hundred twenty (120) days after
the end of each calendar year, a copy of the annual financial
statements of Borrower, that shall include the balance sheet of
Borrower as at the end of such year and related statements of income
and expenses, statement of changes in financial position, a statement
of changes in capital accounts and a statement of allocation of
distribution of profits and losses of Borrower, all in reasonable
detail, prepared in accordance with GAAP (or tax accounting reconciled
to GAAP) and reviewed by a reputable accounting firm. Such statements
shall be accompanied by the annual federal income tax returns of
Borrower, including all schedules, for the preceding taxable year as
filed with the Internal Revenue Service unless an extension has been
obtained for filing taxes and then within thirty (30) days after final
filing.
(i) As soon as available, and within one hundred twenty (120) days after
the end of each calendar year, Guarantor will provide to Lender, a
current financial statement of Guarantor which statement shall include
an itemization of all assets and liabilities of the Guarantor
scheduled by item and type, all investments and contingent liabilities
and adequate to disclose the net worth of Guarantor at such point in
time. Such financial statement shall be personally certified by
Guarantor and shall be accompanied by the annual federal income tax
returns of Guarantor, including all schedules and K-1s as applicable,
for the preceding taxable year as filed with the Internal Revenue
Service unless an extension has been obtained for filing taxes and
then within thirty (30) days after final filing.
(j) Beginning with the first quarter after the completion of the Project,
as soon as available, and within thirty (30) days after the end of
each quarter, a copy of the quarterly financial statement of Borrower
that shall include the balance sheet of Borrower as at the end of such
quarter and related statements of income and expenses, statement of
changes in financial position, a statement of changes in capital
accounts and a statement of allocation of distribution of profits and
losses of Borrower, all in reasonable detail, prepared in accordance
with GAAP (or tax accounting reconciled to GAAP).
(k) Guarantor shall maintain throughout the term of the Loan, unrestricted
liquidity in a total amount for Guarantor of not less than
$3,500,000.00 in cash, cash equivalents, time deposits and marketable
securities. Evidence of such liquidity shall be prepared by a third
party reasonably acceptable to Lender (via bank statements or
statements provided by a broker-dealer), and shall be provided to
Lender at loan closing and quarterly no less than forty-five (45) days
following the end of each quarter.
(l) Within ten (10) days after Lender's request therefor, Borrower shall
deliver to Lender such other information as Lender may reasonably
request from time to time.
(m) Borrower shall maintain and preserve its existence as a limited
liability company or other form of business organization, as the case
may be, and all rights, privileges, licenses, patents, patent rights,
19
copyrights, trademarks, trade names, franchises and other authority to
the extent material and necessary for the conduct of its respective
business in the ordinary course as conducted from time to time.
Without at least 30 days prior written notice Borrower shall not (i)
change its legal name, (ii) change its state of organization, or (iii)
change the location of its chief executive office.
(n) Guarantor must maintain a level of stockholder equity of no less than
$8,000,000.00 to be measured on a quarterly basis on internally
prepared financial statements prepared according to GAAP and provided
to Lender no less than 60 days following the of each quarter;
provided, however, that such minimum level shall increase to
$9,000,000.00 as of July 31, 2008.
Section 4.3 NEGATIVE COVENANTS. Borrower agrees that without the prior
written consent of Lender:
(a) Borrower shall not grant any security interest in the Mortgaged
Property or any part thereof, or create or permit to be created or
allow to exist any mortgage, encumbrance or other lien upon the
Mortgaged Property.
(b) Borrower shall not agree or consent to any material changes in the
Project Documents; provided however, changes to the Project Documents
which do not affect the aesthetics or diminish the value of the
Project and which are in an amount not exceeding $100,000 in the
aggregate shall not require Lender consent or approval or be in
violation of this section.
(c) Borrower shall not incorporate in the Project any materials, fixtures
or property that are subject to the claims of any other person,
whether pursuant to conditional sales contract, security agreement,
lease, mortgage or otherwise.
(d) Borrower shall not assume, guaranty, or become an obligor or surety
for the obligations of any third party except for those certain
payment obligations undertaken and assumed by Borrower in the
aggregate principal amount of $2,283,303.96 pursuant to the terms set
forth in Section 4 of that certain Tri-Party Agreement dated May 17,
2007 made by and among ▇▇▇▇▇▇▇▇ Construction Associates, Inc., a
Washington corporation, BBP Two, LLC, a Washington limited liability
company, Bethlehem Construction, Inc., a Washington corporation and
Borrower.
(e) Borrower shall not incur any indebtedness other than the Loan and
trade payables in the ordinary course of its business and that certain
indebtedness in the aggregate principal amount of $2,283,303.96 as
evidenced by that certain promissory note payable to Bethlehem
Construction, Inc. as required by Section 4 of said Tri-Party
Agreement.
Section 4.4 ENVIRONMENTAL REPRESENTATION, WARRANTIES AND COVENANTS, AND
INDEMNITIES. To induce Lender to make and fund the Loan, Borrower and Guarantor
hereby represent, warrant, covenant and agree as follows:
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(a) That, except as heretofore disclosed to Lender in writing (i) the
Mortgaged Property has never been used by Borrower or to their
knowledge by any previous owners or occupants or current occupants to
generate, manufacture, refine, transport, treat, store, handle or
dispose of any Hazardous Substances and no such Hazardous Substances
exist on the Mortgaged Property or in its soil or groundwater (other
than those utilized during the course of construction of the Project),
(ii) the Project will not be constructed with asbestos, asbestos
containing materials, urea formaldehyde insulation or any other
chemical or substance that has been determined to be a hazard to
health and/or the environment, (iii) there does not presently exist,
nor to best of their knowledge have there been in the past, electrical
transformers or other equipment that have dielectric fluid-containing
polychlorinated biphenyls (PCBs) located in, on or under the Mortgaged
Property, (iv) to their knowledge, the Mortgaged Property has never
contained any underground storage tanks, (v) neither Borrower nor
Guarantor have received or have knowledge of any summons, citation,
directive, letter or other communication, written or oral, from any
local, state or federal governmental agency concerning the existence
of Hazardous Substances on the Mortgaged Property or in the immediate
vicinity of the Mortgaged Property or the releasing, spilling,
leaking, pumping, pouring, emitting, emptying, or dumping of Hazardous
Substances onto the Mortgaged Property or into waters or other lands.
(b) That Borrower shall (i) comply and shall cause all occupants of the
Mortgaged Property to comply with all federal, state and local laws,
rules, regulations and orders with respect to the discharge,
generation, removal, transportation, storage and handling of Hazardous
Substances, (ii) remove any Hazardous Substances immediately upon
discovery of the same in accordance with applicable laws, ordinances
and orders of governmental authorities having jurisdiction thereof,
(iii) pay or cause to be paid all costs associated with such removal,
(iv) prevent the migration of Hazardous Substances from or through the
Mortgaged Property onto or under other properties, (v) keep the
Mortgaged Property free of any lien imposed pursuant to any state or
federal law, rule, regulation or order in connection with the
existence of Hazardous Substances on the Mortgaged Property, (vi) not
install or permit to be incorporated into any improvements in the
Mortgaged Property or to exist in or on the Mortgaged Property any
asbestos, asbestos containing materials, urea formaldehyde insulation
or any other chemical or substance that has been determined to be a
hazard to health and/or the environment, (vii) not cause or permit to
exist, as a result of an intentional or unintentional act or omission
on the part of Borrower, or any occupant of the Mortgaged Property, a
releasing, spilling, leaking, pumping, emitting, pouring, emptying or
dumping of any Hazardous Substances onto the Mortgaged Property or
into waters or other lands, and (viii) give all notifications and
prepare all reports required by Environmental Laws or any other law
with respect to Hazardous Substances existing on, released from or
emitted from the Mortgaged Property. Without limiting the generality
of the foregoing, Borrower shall remidiate all Hazardous Substances
identified in the Phase 2 Environmental Site Assesment prepared by
Cascade Earth Services ("CES") dated August 1, 2007 (the "Phase 2
Report") in accordance with the remediation plan prepared by CES and
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meeting the substantive requirements of the Model Toxics Control Act
(Chapter 70.105D RCW), and thereafter obtain a No Further Action
Determination from the State of Washington Department of Ecology under
its Voluntary Cleanup Program.
(c) That if either Borrower or Guarantor fail to diligently dispose of or
secure any Hazardous Substance after discovery thereof in full
compliance with all applicable laws and regulations, Lender may at its
option, but without any obligation whatsoever, proceed to so dispose
of or secure the Hazardous Substance or take such other action
necessitated or resulting therefrom at the cost and expense of
Borrower. Borrower and Guarantor further agree that in the Event of
Default or if any Hazardous Substance is discovered in, on or under
the Mortgaged Property or is attributable to or affects the Mortgaged
Property, Borrower and Guarantor shall, at their expense, permit an
environmental inspection, audit, assessment, or other testing or
monitoring of the Mortgaged Property, for the sole benefit of Lender,
to be conducted by Lender or by an independent agent selected by
Lender.
(d) Borrower and Guarantor acknowledge and agree that their obligations
under this SECTION 4.4 are not and shall not be deemed to constitute
mortgage debt, that such obligations are not secured by the Mortgage,
and that such obligations shall not be terminated or otherwise
affected by the sale of the Mortgaged Property in satisfaction or
partial satisfaction of the Note, any foreclosure of the Mortgage or
by any proceeding or deed in lieu of foreclosure or by any payment or
performance of any other indebtedness or obligation or by any passage
of title to Lender or by any disposition by Lender of all or any part
of the Mortgaged Property or by any other action or thing, including
any anti-deficiency provisions of applicable law, and that such
obligations are totally independent of and unaffected by the terms of
any Loan Documents or other writing or agreement, and Borrower and
Guarantor specifically forever waive any and all claims and defenses
to the contrary. The obligations of Borrower and Guarantor under this
SECTION 4.4 shall survive payment of the Note.
ARTICLE V
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 5.1 EVENT OF DEFAULT DEFINED. As used herein, the term Event of
Default shall include each or all of the following events:
(a) Borrower shall fail to pay any principal or interest due under the
Note or any other amount payable hereunder when due.
(b) Borrower or Guarantor shall default in the performance of any
agreement, term, provision, condition, or covenant required to be
performed or observed by Borrower or Guarantor hereunder or under the
Loan Documents (other than non payment and other than a covenant or
agreement or default that is elsewhere in this Agreement or in the
Loan Documents specifically dealt with) required to be performed or
observed by Borrower or Guarantor hereunder or any other Loan Document
or other agreement with or in favor of Lender which is not cured
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within thirty (30) days of delivery of written notice of default, or
if the breach is of such a nature that it cannot reasonably be cured
or remedied within the thirty (30) day period, the time period for
cure shall be extended for such period as may be necessary to cure
such failure with reasonable diligence, but not to exceed ninety (90)
days after such written notice.
(c) Any financial information, statement, certificate, representation or
warranty given to Lender by Borrower (or any of their representatives)
or Guarantor in connection with entering into this Agreement or the
other Loan Documents and/or any borrowing hereunder, or required to be
furnished under the terms hereof or the Loan Documents, shall prove to
be untrue in any material respect (as determined by Lender in the
exercise of its reasonable judgment) as of the time when given.
(d) Borrower or Guarantor (or their respective Affiliates) shall be in
default under the terms of any loan agreement, promissory note,
guaranty, lease, conditional sales contract or other agreement,
document or instrument evidencing, governing or securing any
indebtedness owing by Borrower or Guarantor to Lender or any of its
Affiliates, and the period of grace, if any, to cure said default
shall have passed, unless such default or the underlying claim is
being contested by Borrower or Guarantor based on a legitimate, good
faith argument and Borrower or Guarantor has bonded or reserved
sufficient monies to satisfy such default or underlying claim.
(e) Borrower or Guarantor shall be in default under the terms of any loan
agreement, promissory note, lease, conditional sale contract or other
agreement, document or instrument evidencing, governing or securing
any indebtedness in excess of $100,000 owed by Borrower or Guarantor
to any third party, and the period of grace, if any, to cure said
default shall have passed, unless such default or the underlying claim
is being contested by Borrower or Guarantor based on a legitimate,
good faith argument and Borrower or Guarantor have bonded or reserved
sufficient monies to satisfy such default or underlying claim.
(f) Any final judgment shall be obtained against Borrower or Guarantor
that, together with all other outstanding unsatisfied judgments
against Borrower or Guarantor shall exceed the sum of $100,000 and
shall remain unvacated, unbonded or unstayed for a period of thirty
(30) days following the date of entry thereof, unless such default or
the underlying claim is being contested by Borrower or Guarantor based
on a legitimate, good faith argument and Borrower or Guarantor has
bonded or reserved sufficient monies to satisfy such default or
underlying claim.
(g) Borrower or Guarantor shall cease to exist (ii) Guarantor shall
attempt to revoke Guarantor's Guaranty or Guaranty becomes
unenforceable in whole or in part for any reason; or (iii) any
bankruptcy, insolvency or receivership proceedings, or an assignment
for the benefit of creditors, shall be commenced by Borrower or any
Guarantor under any federal or state law; or (iv) if an order for
relief under any present or future federal bankruptcy act or similar
state or federal law shall be entered against Borrower or Guarantor,
or if a petition or answer requesting or proposing the entry of such
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order for relief or the adjudication of Borrower or Guarantor as a
debtor or a bankrupt or its or their reorganization under any present
or future state or federal bankruptcy act or any similar federal or
state law shall be filed in any court and such petition or answer
shall not be discharged or denied within sixty (60) days after the
filing thereof or; (v) Borrower or Guarantor shall become the subject
of any out-of-court settlement with substantially all of its
creditors; or (vi) Borrower or Guarantor is unable or admits in
writing its inability to pay its debts as they mature.
(h) There is a material adverse change in the financial condition of
Borrower or Guarantor, or in any collateral securing the Loan.
(i) Borrower shall enter into any merger or consolidation transaction, or
liquidate or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of related transactions, all or a
substantial part of its property, business, or assets, except as
permitted by this Agreement or unless the prior written consent of
Lender is first obtained.
(j) A survey shows that the Project encroaches upon any easements,
unvacated street, building or parking set-backs, or upon any adjoining
property to an extent deemed material by Lender.
(k) The construction of the Project is abandoned or shall be unreasonably
delayed or be discontinued for a period of forty-five (45) consecutive
calendar days or such number of days as is deemed to be reasonable by
Lender under the particular circumstances of the delay, in each
instance, for reasons other than acts of God, fire, storm, strikes,
blackouts, labor difficulties, riots, inability to obtain materials,
equipment or labor, governmental restrictions or any similar cause
over that Borrower is unable to exercise control.
(l) Lender shall determine that additional sums are to be deposited with
Lender to provide for the completion of the Project and Borrower shall
fail to deposit such sums as required by said SECTION 2.4 of this
Agreement.
(m) Borrower has failed to inject additional equity or provide additional
collateral as required under SECTION 7.20.
(n) All or any portion of the Project or the Mortgaged Property, or the
legal, equitable or any other interest therein, shall be sold,
transferred, assigned, leased or otherwise disposed of except as
permitted by this Agreement or unless the prior written consent of
Lender is first obtained.
(o) At the time any Advance is requested by Borrower, the title to the
Mortgaged Property is not reasonably satisfactory to Lender,
regardless of whether the lien, encumbrance or other question existed
at the time of any prior Advance.
(p) The Project is materially damaged or destroyed by other casualty and
the loss, in the reasonable judgment of Lender, is not adequately
covered by insurance actually collected or in the process of
collection.
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(q) Borrower and the General Contractor shall fail to comlete the "Value
Engineering Changes" under Section 5.2.2 of the General Contract, and
Borrower shall fail to deliver an executed Sworn Construction
Statement which reflects such "Value Engineering Changes", within 120
days of the date hereof.
(r) An Event of Default occurs under any of the Loan Documents. Reference
is hereby made to the Loan Documents for additional occurrences
constituting an Event of Default hereunder.
Section 5.2 RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default
Lender may, at its option, exercise any and all of the following rights and
remedies (and any other rights and remedies available to it):
(a) Lender may terminate the Commitment and any further obligation to fund
Advances hereunder.
(b) Lender may, by written notice to Borrower, declare immediately due and
payable all unpaid principal of and accrued interest on the Note,
together with all other sums payable hereunder, and the same shall
thereupon be immediately due and payable without presentment or other
demand, protest, notice of dishonor or any other notice of any kind,
all of which are hereby expressly waived; provided, however, that upon
the filing of a petition commencing a case naming Borrower and/or
Guarantor as debtor under the United States Bankruptcy Code, the
principal of and all accrued interest on the Note shall be
automatically due and payable without any notice to or demand on
Borrower or any other party.
(c) Lender shall have the right, in addition to any other right of
set-off, upon prior written notice to Borrower, to apply any amounts
Borrower has deposited with Lender against any sums due pursuant to
the Note and Mortgage.
(d) In addition to and not in lieu of all other rights and remedies
hereunder, if Lender has not received, within 10 days of written
notice, any financial information, statement and/or certificate,
required to be furnished under the terms hereof or the Loan Documents,
Lender shall have the right to assess a late fee in the amount of $25
per document, per day.
(e) Lender shall have the right, in addition to any other rights provided
by law or in equity, to enforce its rights and remedies under the Loan
Documents.
ARTICLE VI
MISCELLANEOUS
Section 6.1 INSPECTIONS. Borrower shall be responsible for making
inspections of the Project during the course of the construction of the Project
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and shall determine to its own satisfaction that the work done or the materials
supplied by the Contractors to whom payment is to be made out of each Advance
has been properly done or supplied in accordance with the applicable contracts
with such Contractors. If any work or materials supplied by a Contractor are not
satisfactory to Borrower, Borrower will immediately notify Lender in writing of
such fact. It is expressly understood and agreed that Lender or Inspecting
Engineer may conduct such inspections of the Project as Lender may reasonably
deem necessary for the protection of Lender's interest, and that any such
inspections of the Project by Lender or Inspecting Engineer will be made and
will be issued solely for the benefit and protection of Lender, and that
Borrower will not be entitled to rely thereon, but shall reimburse Lender for
any out-of-pocket costs and expenses associated therewith.
Section 6.2 INDEMNIFICATION BY BORROWER. Borrower shall bear all loss,
expense (including reasonable attorneys' fees) and damage in connection with and
agrees to indemnify and hold harmless Lender, its agents, servants and employees
for, from and against all claims, demands and judgments made or recovered
against Lender, its agents, servants and employees, because of bodily injuries,
including death, at any time resulting therefrom, and/or because of damages to
property of Lender or others (including loss of use) from any cause whatsoever,
arising out of, incidental to, or in connection with the Project or the
operation of the Mortgaged Property, whether or not due to any act of omission
or commission, including negligence of Borrower or any Contractor or of their
employees, servants or agents, except for Lender's gross negligence and willful
misconduct. Borrower's liability hereunder shall not be limited to the extent of
insurance carried by or provided by Borrower or subject to any exclusions from
coverage in any insurance policy. The obligations of Borrower under this SECTION
6.2 shall survive the repayment of the Note. Whenever Borrower is obligated to
indemnify or defend Lender under the terms of this Agreement or under the terms
of any other Loan Document, such indemnity obligations shall run to the favor of
Lender and its directors, officers, employees, agents, contractors,
subcontractors, licensees, invitees, successors and assigns.
Section 6.3 FEES. Borrower shall reimburse Lender upon demand for all costs
and expenses including without limitation, reasonable attorneys' fees, appraisal
fees (including reasonable appraisal fees incurred by Lender under SECTION 6.20
of this Agreement), survey fees, inspection fees, closing charges, documentary
or tax stamps, recording and filing fees, Inspecting Engineer fees, insurance
premiums and service charges, paid or incurred by Lender in connection with (i)
the preparation, negotiation, approval, execution and delivery of the Loan
Documents, and any other documents and instruments related hereto or thereto,
(ii) the negotiation of any amendments or modifications to any of the foregoing
documents, instruments or agreements and the preparation of any and all
documents necessary or desirable to effect such amendments or modifications,
(iii) the review and approval of documents submitted to Lender pursuant to any
of the provisions hereof including the Draw Requests to be submitted in
accordance with SECTION 2.2 hereof, and (iv) the enforcement by Lender during
the term hereof or thereafter of any of the rights or remedies of Lender
hereunder or under any of the foregoing documents, instruments or agreements or
under applicable law, including, without limitation, reasonable costs and
expenses of collection of any amount due to Lender under the Note or any of the
Loan Documents, whether or not suit is filed with respect thereto and whether
such costs are paid or incurred, or to be paid or incurred, prior to or after
entry of judgment, and all reasonable costs and expenses including all
26
reasonable attorneys' fees incurred by Lender as a result of the bankruptcy or
insolvency of Borrower.
Section 6.4 ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and mailed or delivered, if to Borrower, at its address: c/o Global
Entertainment Corp., ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; if to
Guarantor at its address: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇;
and if to Lender, at its address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Commercial Real Estate Department, or as to
each party, at such other address as shall be designated by such party in a
written notice to the other party. All such notices and communications shall,
when mailed or delivered, be effective when deposited in the mails or delivered
to Borrower, Guarantor or Lender, addressed as aforesaid.
Section 6.5 AMENDMENTS, DETERMINATIONS BY LENDER, CONSENTS, ETC. This
Agreement and the Loan Documents may not be amended or modified, nor may any of
their terms (including, without limitation, terms affecting the maturity of or
rate of interest on the Note) be modified or waived, except by written
instruments signed by Lender, Borrower and/or Guarantor, as applicable. In any
instance where the consent or approval of Lender may be given or is required, or
where any determination, judgment or decision is to be rendered by Lender under
this Agreement or under any Loan Document, the granting, withholding or denial
of such consent or approval and the rendering of such determination, judgment or
decision shall be made or exercised by Lender at its sole and exclusive option
and in its sole and absolute discretion.
Section 6.6 TIME OF THE ESSENCE. Time is of the essence in the performance
of this Agreement.
Section 6.7 WAIVERS. No waiver by Lender of any right or remedy hereunder
shall operate as a waiver of any other right or remedy, or of the same right or
remedy on a future occasion. No delay on the part of Lender in exercising any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy preclude other or future
exercise thereof or the exercise of any other right or remedy.
Section 6.8 REMEDIES CUMULATIVE. The rights and remedies herein specified
of Lender are cumulative and not exclusive of any rights or remedies that Lender
would otherwise have at law or in equity or by statute.
Section 6.9 GOVERNING LAW AND ENTIRE AGREEMENT. Borrower, Guarantor and
Lender, by their execution of this Agreement, expect and intend that this
Agreement be governed by and construed under the laws of the State of Washington
and Borrower, Guarantor and Lender consent to the jurisdiction of the State of
Washington for all purposes. The Loan Documents contain the entire agreement of
the parties on the matters covered herein and therein.
Section 6.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but such counterparts shall together constitute one and the same instrument.
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Section 6.11 TERM. This Agreement, and the terms and conditions hereof,
shall survive the execution and delivery of the Note and other Loan Documents
and shall remain in full force and effect until the Note is paid in full. The
representations, warranties, covenants and agreements of Borrower and Guarantor
survive the execution and delivery of the Note and other Loan Documents, and
where applicable, survive the repayment of the Note.
Section 6.12 SUCCESSORS AND ASSIGNS. This Agreement, and the terms and
provisions hereof, shall be binding upon Borrower and Guarantor and each of its
respective heirs, successors and permitted assigns, and shall inure to the
benefit of Lender, its successors and assigns; provided, however, that Borrower
may not transfer or assign this Agreement, including, without limitation, its
right to borrow hereunder, without the prior written consent of Lender.
Section 6.13 OFFSETS. As additional security for the payment of the Note
and the other obligations of Borrower under this Agreement and the other Loan
Documents and any other obligations of Borrower to Lender of any nature
whatsoever (collectively the "OBLIGATIONS"), Borrower hereby grants to Lender a
security interest in, a lien on and an express contractual right to set off
against all depository account balances, cash and any other property of Borrower
now or hereafter in the possession of Lender. Lender may, at any time upon the
occurrence of an Event of Default hereunder (notwithstanding any notice
requirements or grace/cure periods under this or other agreements between
Borrower and Lender) set off against the Obligations as are then due or have
been accelerated, all upon contemporaneous notice or demand of any kind to
Borrower.
Section 6.14 HEADINGS. The descriptive headings for the several Sections of
this Agreement are inserted for convenience only and shall not define or limit
any of the terms or provisions hereof.
Section 6.15 ACCOUNTING. Unless otherwise expressly provided herein, or
unless Lender otherwise consents in writing, all accounting terms used herein
that are not expressly defined in this Agreement shall have the meanings
respectively given to them in accordance with generally accepted accounting
principles and all financial statements and reports furnished to Lender
hereunder shall be prepared, and all computations and determinations pursuant
hereto shall be made, in accordance with generally accepted accounting
principles and practices, consistently applied.
Section 6.16 NOT JOINT VENTURER. Lender is not, and shall not by reason of
any provision of any of the Loan Documents, be or be deemed to be a joint
venturer with or partner or agent of Borrower.
Section 6.17 ADEQUACY OF LOAN PROCEEDS. Lender has not made, nor shall it
be deemed to have made, any representation or warranty that the Commitment is or
will be sufficient to complete the Project.
Section 6.18 PARTICIPATIONS. Lender may, in its sole discretion, sell in
whole or in part, assign and convey to one or more financial institutions
undivided participation interests in and to the Loan and the Loan Documents and
Borrower hereby consents to the same, and the disclosure of all financial
information of Borrower necessary to effectuate the same.
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Section 6.19 RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and
other obligations of Borrower and the rights and remedies of Lender that are
outlined in this Agreement and the other Loan Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms
in this Agreement and/or the Loan Documents, all terms shall be cumulative so as
to give Lender the most favorable rights set forth in the conflicting documents.
Section 6.20 REAPPRAISALS. Lender shall have the right (but not the
obligation) to obtain an update of the existing appraisal of the Mortgaged
Property or a new appraisal of the Mortgaged Property for the sole benefit of
Lender but at the sole cost and expense of Borrower under the following
circumstance:
(a) If, for any reason development of the Project is delayed by more than
forty-five (45) days beyond the development schedule Lender may
obtain, at the Borrower's expense, one or more new or updated
appraisals of the Project by an appraiser acceptable to Lender. If the
estimated as-improved market value of the Project, as reported in the
new or updated appraisal, results in a ratio of aggregate Loan
advances to Project value that is greater than 98%, the Borrower shall
within 5 business days of Lender's demand inject additional cash
equity or provide additional collateral acceptable to Lender to reduce
such ratio to 98% or less.
In any such event, Borrower shall fully cooperate with Lender and Lender's
appraiser as may be necessary and shall allow Lender and/or Lender's appraiser
complete access to the Mortgaged Property for the purpose of completing such
appraisal of the Mortgaged Property.
Section 6.21 CONSTRUCTION SIGNAGE. To the extent permitted by law, during
construction, Lender may place a sign on the Mortgaged Property specifying that
it is participating in the financing of the Project. Further, Lender may
publicize the financing and may include a general description of the Project in
publicity releases.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT AND ALL OTHER LOAN
DOCUMENTS SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES, EXCEPT THOSE CONTAINED IN THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, MAY BE LEGALLY ENFORCED. YOU MAY CHANGE
THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL
ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT
BETWEEN YOU AND LENDER. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN
EFFECT BETWEEN YOU AND LENDER, WHICH OCCURS AFTER RECEIPT BY YOU OF THIS NOTICE,
MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO
SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
LENDER:
▇▇▇▇▇▇▇▇ FINANCIAL GROUP, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇ ▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇
Its: Authorized Signatory
BORROWER:
WENATCHEE EVENTS CENTER, LLC,
a Washington limited liability company
Name: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Its: CFO
GUARANTOR:
GLOBAL ENTERTAINMENT
CORPORATION, a Nevada corporation
Name: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Its: CFO
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