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HomeMy WebLinkAboutA045 - Agreement with Manatt's, Inc and Ames Trenching and Excavating, Inc. dated May 28, 2002 AGREEMENT This Agreement is entered into by Manatts, Inc. (hereinafter referred to as "Manatts"), Thomas L. Flynn, Bankruptcy Trustee for Eastgate Development, Inc. (hereinafter referred to as "Trustee"), First National Bank, Ames, Iowa referred to as "First National"), the City of Ames, Iowa, (hereinafter referred to as (hereinafter "City") and Ames Trenching and Excavating, Inc., (hereinafter referred to as. "Ames Trenching"). WHEREAS, Eastgate Development, Inc., the developer of Eastgate Subdivision, Ames, Iowa, is the Debtor in Bankruptcy Case No. 004163 CJ Chapter 11 (the "Bankruptcy Case") pending in the United States Bankruptcy Court for the Southern District of Iowa (the 'Bankruptcy Court"); and, WHEREAS, the streets in Eastgate Subdivision, Ames, Iowa, need to be completed with a final lift applied; and, WHEREAS, Trustee desires to have Manatts perform the work of applying said final lift; and, WHEREAS, Manatts and Ames Trenching are creditors in the pending bankruptcy of Eastgate Development, Inc.; and, WHEREAS, First National is a creditor in the pending bankruptcy of Eastgate Development, Inc. having a first mortgage against the lots in Eastgate Subdivision, Ames, Iowa; and, WHEREAS, the City is holding Forty-Two Thousand Dollars ($42,000) to be applied toward the cost of applying said final lift. WHEREAS, the cost of applying said final lift will cost more than Forty-Two Y 0 2002 LJI Thousand Dollars ($42,000). IT IS AGREED AS FOLLOWS: 1. Manatts, in order to apply said final lift will perform the following estimated quantities of work at the below-stated unit prices: Item Quantity Unit Unit Price Base, Clean&Prep 1:00 Lump $700.00 ACC Surface 1/4" 900.00 to $56.35 Adjust MH 12.00 Ea $620.00 Adjust WV 12.00 Ea $210.00 2. It is understood and agreed that the above estimated quantities are only estimates and actual quantities needed to complete the work may vary from such estimates; and that Manatts will be paid for the actual work performed at the above stated unit prices. 3. The City will inspect and approve the work performed by Manatts. The City will measure and verify the actual quantities used by Manatts in the work performed and for which Manatts shall be paid. Manatts shall submit a copy of its final bill to the City, and the City shall review, approve, and advise the Trustee and First National in writing that it has approved, Manatts' final bill for payment. 4. Manatts shall be paid for the work it performed within thirty (30) days after the work is performed, approved and accepted by City and the City has notified the Trustee and First National in writing as required in Paragraph 3. 5. Upon receipt of the City's written approval as required by Paragraph 3 of this Agreement, First National will loan the Eastgate Development bankruptcy estate up 2 to fifty thousand dollars ($50,000) for the purpose of paying Manatts final bill that was approved by the City for the work that it performs in applying said final lift. First National's obligation to make such loan shall be subject to the Bankruptcy Court entering a final Order approving the terms of such loan as set forth in the Trustee's Motion to Obtain Loan From and Grant Super Priority Lien to First National Bank, Ames, Iowa filed in the Bankruptcy Case. - - 6. Upon approval of Manatts final bill as provided in Paragraph 3 of this Agreement, the City shall release the forty-two thousand dollars ($42,000) the City is holding and shall pay it to Manatts as partial payment of said bill. The Eastgate Development bankruptcy estate shall pay the balance of such bill. 7. In further consideration for performing the work identified herein, Trustee, First National, Ames Trenching, and Manatts agree as follows: (a) all monies, together with interest thereon, loaned by First National to Trustee with which to pay Manatts for such work shall be repaid in full before Manatts and Ames Trenching are entitled to share in any net sale proceeds from sales of lots in Eastgate Development occurring after the date of this Agreement. (b) thereafter, net sale proceeds from the sales of each and every lot in Eastgate Subdivision occurring on or after the date of this Agreement will be shared on the following basis: (i) First National Bank- 90% of the net sale proceeds; (ii) Ames Trenching- 3% of net sale proceeds; and, (iii) Manatts - 7% of net sale proceeds. (c) the sharing of net sale proceeds shall continue in the percentages 3 set forth above until the secured claims owing to First National, Ames Trenching and Manatts are paid in full. (d) In the event the net sale proceeds from sale of all lots in Eastgate Subdivision are insufficient to repay in full First National's entire secured claim (including, but not limited to, attorneys' fees and expenses allowed by the Bankruptcy Court), then.-Ames Trenching and Manatts shall disgorge to First National the net sale proceeds received by them from the sale of lots in Eastgate Subdivision on a prorata basis until First National's entire secured claim is paid in full. Such prorata basis shall be thirty percent (30%) from Ames Trenching and seventy percent(70%) from Manatts. (e) in the event First National's secured claim against the lots in Eastgate Subdivision is paid in full before all lots in Eastgate Subdivision are sold, then all of the net sale proceeds of the sale of the remaining lots in Eastgate Subdivision shall first be applied to Ames Trenching's mechanic's lien plus interest and attorney fees as allowed by the Bankruptcy Court, and then to Manatts' mechanic's lien plus interest and attorney fees as allowed by the Bankruptcy Court. (f) in the event the net sale proceeds from sale of all of the lots in Eastgate Subdivision are insufficient to repay Ames Trenching's mechanic's lien in full plus interest and attorney's fees as allowed by the Bankruptcy Court, then Manatts shall disgorge to Ames Trenching net sale proceeds received by Manatts to the extent necessary to repay Ames Trenching's mechanics lien plus interest and attorneys' fees as allowed by the Bankruptcy Court in full. 4 8. In the event all lots in Eastgate Subdivision are sold and amounts from the net sale proceeds provided for in paragraph 7 hereof, have not been sufficient to pay off all of Manatts' or Ames Trenching's mechanic's liens plus interest and attorney fees as allowed by the Bankruptcy Court, Manatts and Ames Trenching hereby agree that First National shall not be responsible to pay for any such deficiency. .9.. The parties hereto have no objection to Manatts' bid and Manatts' bid proposals in this matter, and this Agreement shall be binding upon the Trustee, Manatts, First National, Ames Trenching, the City, and their respective successors and assigns. Dated effective this day of May, 2002. MANATTS, INC. By homas J. �/qhlt, Manager Thomas A. Flynn Ba tcy trustee for Eastgate Development, Inc. FIRST NATIONAL BANK CITY OF AMES Ames, Iowa ,�/� j By:A By: Thomas H. Pohlman, President Paul Wiegand Director of Public Works AMES TRENCHING AND EXCAVATING, INC. By: William Fedeler, President 5