2023-09-01 Tab 08 - Disbursing Agreement (2)EXECUTION
DISBURSING AGREEMENT
This DISBURSING AGREEMENT, dated as of September 1, 2013, is entered into by
and between Evans Park, Inc., a Minnesota nonprofit corporation (the "Corporation"); U.S. Bank
National Association, a national banking association, as trustee under that certain Indenture
described below (the "Trustee"); and Sherburne County Abstract Co., as disbursing agent (the
"Disbursing Agent").
WITNESSETH:
WHEREAS, the Corporation and the City of Otsego, Minnesota (the "City"), have
entered into a Loan Agreement of even date herewith ("Loan Agreement"), under which the City
has, among other things, agreed to make a loan to the Corporation (the "Loan"), to provide
financing for the acquisition, construction and equipping of a 63-unit combination senior housing
and health care facility, to include independent living units, assisted living units, and certain
units dedicated to memory care residents (the "Project"), to be located in the in the City of
Albertville, Minnesota; and
WHEREAS, the Project is located on certain land in the City of Albertville, Minnesota
(as more particularly described in the Mortgage referred to below, the "Land"); and
WHEREAS, the Loan is being made from proceeds of the City's Revenue Bonds (Evans
Park, Inc. Project), Series 2013 (the "Bonds"), issued pursuant to a Trust Indenture (the
"Indenture"), of even date herewith, by and between the City and Trustee; and
WHEREAS, in connection with the issuance of the Bonds, the obligations of the
Corporation under the Loan Agreement are secured by a Combination Mortgage, Security
Agreement and Fixture Financing Statement and Assignment of Leases and Rents dated as of
September 1, 2013 (the "Mortgage") from the Corporation to the City and assigned by the City
to the Trustee; and
WHEREAS, a portion of the proceeds of the Bonds and certain other funds of the
Corporation to be deposited, held and invested in the Project Account, established and
maintained by the Trustee under the Indenture, and moneys in the Project Account are to be
disbursed therefrom in accordance with the Indenture and this Disbursing Agreement; and
WHEREAS, Kraus Anderson Construction Company, of Minneapolis, Minnesota, has
been engaged by the Corporation to serve as the general contractor for the Project (the "General
Contractor"), pursuant to the Standard Form of Agreement between Owner and Contractor for
labor and certain materials only (AlA Form A111-1997) between the Corporation and the
General Contractor, dated August 21, 2013, together with the separate Materials Purchasing
Agent Agreement between the Corporation and the General Contractor dated August 21, 2013
(collectively referred to as the Construction Contract"), true and correct copies of which,
including any amendments thereto, have been delivered to the Disbursing Agent as of this date;
and
WHEREAS, Pope Associates Inc., St. Paul, Minnesota, has been engaged by the
Corporation to serve as the architect for the Project (the "Architect"), pursuant to the Architect's
Agreement dated April 26, 2013 (the "Architect's Agreement"), between the Corporation and the
Architect; and the Architect will also serve hereunder as inspecting architect for the Project (the
"Inspecting Architect"); and
WHEREAS, the Disbursing Agent has issued a commitment for a lender's title insurance
policy insuring the lien of the Mortgage; and
WHEREAS, the Disbursing Agent shall supervise the disbursement of moneys from the
Project Account, all in accordance with the Loan Agreement and the Indenture, and all pursuant
to the terms and conditions thereof and hereof.
NOW, THEREFORE, in consideration ofthe premises, of the City's agreement to lend
funds to the Corporation under the Loan Agreement, and of the mutual covenants and
agreements hereinafter set forth, it is agreed by and between the parties hereto as follows:
1. Cost Statement; Contractors. The Corporation shall submit to the Disbursing
Agent executed copies of the Construction Contract and the Architect's Agreement, together
with a copy of a "Sworn Construction Cost Statement," and shall advise the Disbursing Agent of
the name of each person, corporation or other entity which has a contract or subcontract in an
amount of $250,000 or more, under which payment may be required for any work done, material
supplied or services furnished in connection with acquiring, constructing and equipping the
Project (the "Contractors"). The Corporation shall keep the Disbursing Agent advised at all
times of the names of all such Contractors, and of the type of work, material or services and of
the dollar amount covered by each of their respective contracts with the Corporation.
2. Disbursements for Contractors. The Corporation may obtain disbursements for
payment to Contractors only to the extent of the amount ofthe work satisfactorily completed or
materials actually incorporated into the Project by each such Contractor in accordance with his,
her or its contract, less any required retainage, and the Corporation agrees that all sums requested
hereunder for payment to each Contractor shall not exceed that amount. The Corporation may
obtain disbursements for payment to the Contractors or suppliers for the cost of materials
acquired for the Project but not yet incorporated therein, if the Disbursing Agent has received
(a) evidence that the Corporation has acquired title to the same and that the same are located or
shall be located in a place of storage therefor on the Land or in a secure or bonded warehouse
located in the county in which the Land is situated; and (b) a schedule for the prompt
incorporation thereof into the Project, and if the Authorized Borrower Representative (as said
term is defined in the Loan Agreement) has verified and approved the cost and acquisition of
said materials, their physical presence at the approved storage site, and the security and
protection provided therefor. The Trustee shall not be required to make the final disbursement
for the payment of the full amount of any Contractor's contract until the Inspecting Architect has
satisfied the Disbursing Agent that the Project or that Contractor's component of the Project has
been completed in accordance with the approved Plans and Specifications, and all requirements
set forth in the Loan Agreement have been fully complied with, including, to the extent
applicable, the requirements to evidence the Completion Date of the Project.
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3. Mortgage; Disbursement through Disbursing Agent. The Trustee agrees that it
will deliver the executed Mortgage, when received by the Trustee, to the Disbursing Agent for
recording. The Trustee also agrees that it will disburse all moneys in the Project Account as
provided for above through the Disbursing Agent, as provided in this Agreement.
4. Draw Requests. Whenever the Corporation desires to obtain a disbursement from
the Project Account, the Authorized Borrower Representative shall submit a signed Draw
Request, in the form attached as Exhibit A to the Indenture, to the Trustee and the Disbursing
Agent, at least three (3) busine~s days prior to the date on which the requested disbursement is to
be made (the "Disbursement Date"). The Corporation shall also simultaneously submit to the
Disbursing Agent the following:
(a) A certificate, substantially in the form of an AlA DOC G702, relating to
each Contractor who is to receive a payment from the disbursement, signed by the Project
Architect or the Authorized Borrower Representative, stating that each such Contractor
has satisfactorily completed the work for which payment (less any required retainage) is
requested in such Draw Request.
(b) Waivers of mechanic's lien and/or materialman's lien, executed by each of
the Contractors in the amount of the lienable costs of the Project payable from the
previously requested advance, in the form required by the Disbursing Agent. Such
waivers shall be submitted in each case to the Disbursing Agent, unless the Disbursing
Agent determines that the Contractor's claim would not give rise to such a lien.
(c) Invoices and such other supporting evidence as may be requested by the
Disbursing Agent or Trustee to establish the cost or value of the improvements for which
payment is to be and has been made, or as may be required by the Loan Agreement.
(d) A certificate from the Inspecting Architect that moneys remaining in the.
Project Account are sufficient to complete the Project or, if not, a deposit from the
Corporation of a specified amount of money necessary in the judgment of the Inspecting
Architect to cause moneys in the Project Account to be sufficient to complete the Project.
The Disbursing Agent shall then give the Trustee immediate notice by telephone if any
intervening liens are disclosed (other than those expressly listed in the Title Company's loan
policy of title insurance or subsequent amendments thereto previously given to the Trustee). If
any such intervening liens or other matters are discovered by the Disbursing Agent, the
Disbursing Agent shall refrain from making further disbursements until the Disbursing Agent
determines that such intervening liens or other matters have been satisfied. Upon demand of the
Trustee, the Corporation shall cause any such liens or other matters to be satisfied of record or
bonded, ot shall make other arrangements with respect to the discharge thereof satisfactory to the
Disbursing Agent and Trustee.
On each Disbursement Date, if all the terms and conditions of the Loan Agreement and
this Agreement have been complied with by the Corporation, if no default or event of default
exists under the Loan Agreement, the Trustee shall disburse to the Disbursing Agent, in a
manner satisfactory to the Disbursing Agent and Trustee, the principal amount of the requested
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disbursement (less any required retainage and less amounts payable to and disbursed by the
Trustee to itself). The Disbursing Agent shall, as promptly as possible thereafter, if all of the
conditions of this Agreement have been complied with in a manner satisfactory to the Disbursing
Agent, and if the Disbursing Agent has not received notice from the Trustee that a default or an
event of default exists under the Loan Agreement, pay over the proceeds so received from the
Trustee by delivering to each Contractor its check made out to such Contractor for the amounts
set forth in such Draw Request.
5. Disbursements for Specified Items. The provisions of this Agreement providing
for a required retainage shall not apply with respect to disbursements for the items listed below,
which may be disbursed in full upon submission of a Draw Request listing such items signed by
the Corporation, and/or the following special documentation, if any, to the Trustee and
Disbursing Agent (unless said qisbursement is made to the Trustee), or as otherwise provided by
the Loan Agreement:
General Contractor's fees
Real estate taxes on the Project and Project Premises
Insurance Premiums
Other indirect (nonconstruction) items
SPECIAL DOCUMENTATION
Copy of Statement
Copy of Bill
Copy of Statement
As specified by the Project
Supervisor or Authorized
Borrower Representative, and the
Disbursing Agent
If the Corporation directly pays for any costs of construction or other project Costs, as
defined in the Indenture, and the conditions for a disbursement herein have otherwise been
satisfied, the Disbursing Agent may disburse amounts hereunder directly to the Corporation, as a
reimbursement for such payment; provided that all of the other requirements of this Agreement,
including but not limited to the presentation ofwaivers of lien and evidence of payment with
respect thereto, are fulfilled.
6. Other Procedure. The Disbursing Agent or the Trustee may take such steps as it
may deem appropriate, at its option, to verify the application of Bond proceeds to work done and
material furnished for the Project, and to vary the disbursement or payment procedures herein set
forth, ifthe same becomes necessary or desirable to assure the proper application of Bond
proceeds and/or to preserve the first lien status of the Mortgage with respect to disbursements or
payments made pursuant hereto, including but not limited to making payments directly to
subcontractors. However, the Trustee shall not be obligated to conduct any such verification or
to so vary said procedures.
7. Disbursing Agent Records. The Disbursing Agent shall keep records showing the
names of all contractors and other payees to whom payments are made hereunder by the
Disbursing Agent, the date of each payment, and the amount of each, which records may be
inspected by the Corporation and Trustee.
8. Withholding Payment. In the event that the Disbursing Agent shall determine, in
its reasonable judgment, that proper documentation to support a given payment, as required by
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this Agreement, has not been furnished, the Disbursing Agent shall withhold payment of all or
such portion of such payment as shall not be so supported by proper documentation, and shall
promptly notify the Corporation and Trustee of the discrepancy in or omission of such
documentation. Until such time as such discrepancy or omission is corrected to the satisfaction
of the Disbursing Agent, it shall withhold such amount. In the event that such discrepancy or
omission is not corrected within a reasonable time, the Disbursing Agent shall, upon demand of
the Trustee, return such withheld funds to the Trustee, and the Project Account created under the
Indenture shall be credited with the amount of such funds. Such returned funds shall remain
available for expenditure under the Loan Agreement, if the requirements thereof and hereof with
respect thereto are later met.
9. Corporation to Inspect. The Corporation shall be responsible for making
inspections of the Project during the course of construction, and shall determine to its own
satisfaction that the work done or material supplied by the Contractors to whom disbursements
are to be made out of each advance has been properly done or supplied in accordance with
applicable contracts with such Contractors. The Disbursing Agent and Trustee shall not be
required to conduct any inspection of the Project.
10. Trustee and Disbursing Agent Not Responsible. It is expressly understood and
agreed that neither the Trustee nor the Disbursing Agent assumes any liability or responsibility
for the satisfactory completion ofthe Project, for the adequacy of funds disbursed by either of
them pursuant hereto and to the Loan Agreement to complete the Project, for inspections during
construction, or for any acts on the part of the Corporation or Contractors to be performed in the
construction of the Project.
11. Notices. Any notice required or permitted to be given by any party hereto to any
other party hereto under the terms of this Agreement shall be deemed to have been given on the
date the same is deposited in the United States mail, registered or certified, return receipt
requested, postage prepaid, addressed to the party to which the notice is to be given at the
address set forth opposite its name below, or to any other address specified in a notice given by
such party to the others not less than ten (1 0) days prior to the effective date of the address
change.
12. Supersedes Prior Agreements. This Disbursing Agreement supersedes and
replaces any and all prior agreements among the parties with respect to the construction of the
Project.
13. Capitalized Terms. Any capitalized terms used herein which are not required by
proper grammar to be capitalized shall have the meanings given such terms in the Loan
Agreement, Mortgage or Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed
as of the day and year first above written.
EVANS PARK, INC.
By:~{tJ_Iod)_@b---+-. \ -
Its President and Chief Executive Officer
Address:
Evans Park, Inc.
508 Freeport A venue NW, Suite A
Elk River, MN 55330
Attention: Chief Financial Officer
[Signature page to Disbursing Agreement]
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U.S. BANK NATIONAL ASSOCIATION,
Trustee
Its Vice President
Address:
60 Livingston Avenue, 3rd Floor
EP-MN-WS3C
St. Paul, MN 55107
Attention: Corporate Trust Services
[Signature page to Disbursing Agreement]
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4810-8382-7988\1
SHERBURNE COUNTY ABSTRACT CO.,
as Disbursing Agent
By:\ \;'\.•\.':::~~:}::::... "':.:::;;. \:::,~,Av~-·j I (Ji• \:) P"f: P\/f\;:J L,'\( '\ 1'\1\
Its \..-' y:> \
Address:
351 Main Street
Elk River, Minnesota 55330
Attention: Cathy McManus
[Signature page to Disbursing Agreement]
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