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HomeMy WebLinkAboutNDC SKYLINE/FREM0NT 1 - 2006 A-2006-140 Loan No.: 950114974 COLLATERAL ASSIGNMENT OF COOPERATIVE AGREEMENT FOR OFF-SITE IMPROVEMENTS THIS COLLATERAL ASSIGNMENT OF COOPERATIVE AGREEMENT FOR OFF-SITE IMPROVEMENTS (this "Assignment"), dated as of June _12::_, 2006, is made and given by NDC SKYLINE ASSOCIATES, LLC, a Delaware limited liability company, having its offices at 1 MacArthur Place, Suite 300, Santa Ana, California 92707 ("Borrower") in favor of FREMONT INVESTMENT & LOAN, a California industrial bank, as Lender ("Lender"), with respect to the following Recitals: RECITALS: A. Nexus Development Corporation/Central Division, Inc, a California Corporation, and The Grand Plan 2, LLC, a California limited liability company (collectively "Nexus"), predecessors in interest to Borrower, Coastal Rim Properties, Inc., a California Corporation ("Geneva Commons"), the Sandpointe Neighborhood Association, Inc., a California non-profit public benefit and federal 501 (c)(3) corporation ("Sandpointe"), the Community Redevelopment Agency of The City of Santa Ana, a public body corporate and politic ("Agency") and the City of Santa Ana, a charter city and municipal corporation duly authorized under the Constitution and the laws of the State of California ("City"), are parties to that certain Cooperative Agreement for Off-Site Improvements dated as of August 4, 2005 (the "Sandpointe Agreement"), pursuant to which Nexus, Geneva Commons and Sandpointe agreed to, among other things, construct certain improvements for the benefit of the City. B. On or about June ___, 2006, Borrower and Lender have entered into that certain Loan and Security Agreement (the "Loan Agreement"), wherein, among other things, Lender has agreed to make, and Borrower has agreed to accept, a loan (the "Loan") upon the terms and conditions set forth in the Loan Agreement. Each capitalized term used and not specifically defined in this Assignment shall have the same meaning given to such capitalized term in the Loan Agreement. C. The Loan is evidenced by that certain Secured Promissory Note, dated as of the date hereof, in the original principal amount of the Loan made by Borrower and payable to Lender (the "Note"). D. As a condition to making the Loan, Lender has required Borrower to assign to Lender, as additional security for the Loan, all of Borrower's right, title and interest in and to the Sandpointe Agreement. AGREEMENT NOW, THEREFORE, for good and valuable consideration, separate and distinct from the consideration given by Lender with respect to the Loan, the receipt and sufficiency of which are hereby acknowledged, Borrower hereby agrees as follows: 1. Recitals. The Recitals are incorporated herein by this reference. 2. Assianment. As security for the performance of all of the Secured Obligations, Borrower hereby assigns and transfers to Lender all of the Borrower's right, title and interest in and to the Sandpointe Agreement. This Assignment is an absolute assignment thereof for security purposes that shall become void and of no further force or effect upon the full reconveyance of the Security Instrument in accordance with the terms thereof. 3. Representations and Warranties. Borrower hereby represents and warrants for the benefit of Lender that: (a) Borrower is the true owner of all of Nexus' interests under the Sandpointe Agreement; (b) Borrower has not assigned or granted a security interest in the Sandpointe Agreement to 780574,Q1/0C N6003-044/6-8-06/sij/sij any person or entity other than lender; (c) Borrower's interest in the Sandpointe Agreement is not and will not be subject to any claims, setoffs, encumbrances or deductions, other than the rights of the City, the Agency, Sandpointe or Geneva Commons under applicable laws or as expressly set forth therein; (d) the Sandpointe Agreement constitutes and will constitute valid and binding obligations of Borrower and is and will be enforceable against Borrower, City, the Agency, Sandpointe and Geneva Commons in accordance with its respective terms and has not been and will not be amended, extended, supplemented, or terminated except as expressly permitted under the loan Documents, (e) Borrower is not in default, and to the best knowledge of Borrower, City, the Agency, Sandpointe and Geneva Commons are not in default under the terms of the Sandpointe Agreement beyond any applicable notice and cure period; (I) all covenants, conditions and agreements required to be performed by Borrower will be performed as required by the Sandpointe Agreement; and (g) a true, correct and complete copy of the Sandpointe Agreement has been furnished to lender. 4. No AssumDtion bv Lender and Covenants of Borrower. Neither this Assignment nor any action or actions on the part of lender shall constitute an assumption of any obligations on the part of lender under the Sandpointe Agreement, and Borrower shall continue to be liable for all of its obligations thereunder. Borrower hereby does agree to promptly perform any and all obligations it may have under the Sandpointe Agreement and when required by the Sandpointe Agreement and applicable laws, to take such steps as may be necessary or appropriate to secure performance by City, the Agency, Sandpointe and Geneva Commons of all of its obligations under the Sandpointe Agreement. At lender's option, lender may, but shall not be obligated, to perform or discharge any obligation of Borrower under the Sandpointe Agreement, at the expense of Borrower, in the event that Borrower fails to do so within ten (10) days after written notice of such failure. lender shall notify Borrower of any such actions as soon as reasonably practicable; provided, however, the failure of lender to so notify Borrower shall not alter the obligation of Borrower to lender under this Assignment. Borrower hereby agrees to indemnify and hold lender and its agents harmless from and against any loss, cost, liability or reasonable expense (including, without limitation, reasonable attorneys' and accountants' fees and expenses actually incurred, court costs and investigation expenses) resulting from any failure of Borrower to perform its obligations under the Sandpointe Agreement. 5. Benefits Conditionally Retained by Borrower. lender hereby grants Borrower the right to continue to receive the benefits of, and exercise the rights under, the Sandpointe Agreement unless and until an Event of Default occurs, in which event such rights may be revoked at any time thereafter at the option of lender. 6. Action by Lender Followinll Event of Default. lender shall have the right, but not the obligation, at any time following the occurrence of an Event of Default, without notice and without taking possession of the Project or any part thereof, to take in lender's name, or in the name of Borrower or Guarantor, such action as lender may, at any time or from time to time, reasonably determine to be necessary to cure any default under the Sandpointe Agreement or to protect or exercise the rights of Borrower or lender thereunder, and may otherwise exercise any other rights or remedies lender has under the loan Documents. lender shall incur no liability if any action taken by it or on its behalf pursuant to this Assignment shall prove to be in whole or in part inadequate or invalid; and Borrower hereby agrees to indemnify, defend, and hold lender free and harmless from and against any loss, costs, liability or reasonable expense (including, without limitation, reasonable attorneys' and accountants' fees and expenses actually incurred, court costs and investigation expenses) in connection with its actions hereunder, except to the extent directly caused by lender's gross negligence or willful misconduct. 7. Power of Attorney. Borrower hereby irrevocably constitutes and appoints Lender as its true and lawful agent and attorney-in-fact, with full power of substitution, to demand, receive and enforce all rights of Borrower under the Sandpointe Agreement, to modify, supplement and terminate the Sandpointe Agreement, to give appropriate releases, receipts for or on behalf of Borrower in connection with the Sandpointe Agreement, to file, pursue, receive payment and acquittances for or otherwise compromise each and every claim Borrower has or may have against City, the Agency, Sandpointe or Geneva Commons for payment or otherwise under the Sandpointe Agreement, all in the name, place and stead of Borrower or in Lender's name, with the same force and effect as Borrower could have if this 780574.01/0C N6003-044/6-8-06fsijlsij -2- Assignment had not been made. Borrower authorizes any third party to rely exclusively on the certificate of an officer of Lender or its successor for the establishment of an Event of Default and hereby waives and releases any claim Borrower may have against such third party for such reliance. Borrower hereby agrees to deliver to Lender, upon Lender's written demand, all instruments and documents as Lender may reasonably require in order to permit Lender's succession to the right, title and interest of Borrower in and to the Sandpointe Agreement as provided herein. It is hereby recognized that the power of attorney herein granted is coupled with an interest and is irrevocable. At Lender's option, Lender may record this Assignment in the recording location. 8. No Release or Termination. The taking of this Assignment by Lender shall not effect the release of any other collateral now or hereafter held by Lender as security for the obligations of Borrower under the Loan Documents, nor shall the taking of additional security for any such obligations hereafter effect a release or termination of this Assignment, or any terms or provisions hereof. 9. No Waiver. No failure or delay on the part of Lender in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies hereunder are cumulative and may be exercised by Lender either independently of or concurrently with any other right, remedy or power contained herein or in any instrument executed in connection with the Loan Agreement. 10. Captions. The section titles or captions contained in this Assignment are for convenience only and shall not be deemed to define, limit or otherwise modify the scope or intent of this Assignment. 11. Variation in Pronouns. All the terms and words used in this Assignment, regardless of the number and gender in which they are used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context or sense of this Assignment or any paragraph or clause herein may require, the same as if such word had been fully and properly written in the correct number and gender. 12. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing, addressed as follows and shall be deemed to have been properly given if hand delivered, if sent by reputable overnight courier (effective the Business Day following delivery to such courier), if sent by telecopy with confirmation of receipt and a hard copy mailed in accordance with the provisions of this Section 12 (effective the business day following receipt of confirmation of receipt) or if mailed (effective when received or when receipt thereof is first refused by the intended recipient of the notice) by United States registered or certified mail, postage prepaid, return receipt requested: To Borrower: NDC Skyline Associates, LLC cia Nexus Development 1 MacArthur Place, Suite 300 Santa Ana, California 92707 Attention: Curtis R. Olson To Lender: Fremont Investment & Loan 2727 E. Imperial Highway Brea, California 92821-6713 Attention: Commercial Real Estate Asset Management Loan No. 950114974 with a copy to: Fremont Investment & Loan 2425 Olympic Boulevard Third Floor, East Santa Monica, California 90404 780574.01/0C N6003-044/6-8-06/sij/sij -3- Attention: Alec G. Nedelman, Esq. Loan No. 950114974 with a copy to: City of Santa Ana 20 Civic Center Plaza, M-29 Santa Ana, CA 92701 Attention: David N. Ream, City Manager Loan No. 950114974 with a copy to: City of Santa Ana 20 Civic Center Plaza, M-29 Santa Ana, CA 92701 Attention: Benjamin Kaufman, Chief Assistant City Attorney Loan No. 950114974 or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Notices given in any other fashion shall be deemed effective only upon receipt. 13. Events of Default. The occurrence of anyone or more of the following events shall constitute an "Event of Default" under this Assignment: (a) An Event of Default shall have occurred under the Loan Agreement, the Note or any of the other Loan Documents beyond applicable notice and cure periods; or (b) Borrower shall default in the performance of any other term, covenant or agreement contained in this Assignment for thirty (30) days after written notice of such default has been given to Borrower by Lender; provided, however, that if such default is of a nature that it cannot be cured within thirty (30) days and Borrower commences and diligently proceeds within such thirty (30) day period to cure such default, such cure period shall be extended for such period of time as required to cure such default but in no event more than one hundred eighty (180) additional days; or (c) Borrower shall be in default beyond notice and cure periods, if any, under the Sandpointe Agreement. 14. Successors and Assillns. This Assignment shall be binding upon Borrower and its successors and assigns, but may not be assigned or transferred, in whole or in part, by Borrower and any purported assignment by Borrower of this Assignment shall be void and of no force or effect. This Assignment shall inure to the benefit of Lender and its respective successors and assigns, including, without limitation, any holder of the Note, any participant in the Loan, and any affiliate of Lender or any participant in the Loan who acquires all or part of the Project by any sale, assignment or foreclosure under the Security Instrument, by deed or other assignment in lieu of foreclosure, or otherwise. Lender may reassign its right, title and interest in and to the Sandpointe Agreement, in whole or in part, to any Person succeeding to the interest of Borrower or Lender in the Loan, the Project, the Sandpointe Agreement, in Lender's sole discretion without any requirement for consent by Borrower or any other party, and any such reassignment shall be valid and binding upon Borrower, City, the Agency, Sandpointe and Geneva Commons as fully as if each had expressly approved the same. Lender agrees that it will notify Borrower of any reassignment made by Lender. 15. Governinll Law. Borrower hereby acknowledges, consents and agrees this Assignment and the rights of all parties mentioned herein shall be governed by the Laws (as opposed to the conflict of Laws) of the Governing State. 780574.01/0C N6003-044/6-8-06/sijlsij -4- 16. Consent to Jurisdiction. Borrower and Lender each hereby consent to the jurisdiction of any state or federal court located within the Governing State in any suit, action or proceeding based hereon or arising out of, under or in connection with this Assignment or any of the other Loan Documents (and further agree not to assert or claim that such venue is inconvenient or otherwise inappropriate or unsuitable), and waive personal service of any and all process upon them and consent that all service of process be made by certified mail to the applicable address set forth herein. 17. Waiver of JUry Trial . TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY CONTROVERSY OR CLAIM, WHETHER ARISING IN TORT OR CONTRACT OR BY STATUTE OR LAW, BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONJUNCTION WITH THIS SECURITY INSTRUMENT (INCLUDING, WITHOUT LIMITATION, THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF) OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY IN CONNECTION HEREWITH. EACH PARTY ACKNOWLEDGES AND AGREES THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BORROWER'S AND LENDER'S ENTERING INTO THE LOAN DOCUMENTS AND THE PARTIES WOULD NOT HAVE ENTERED INTO THE LOAN DOCUMENTS WITHOUT THIS WAIVER. LENDER AND BORROWER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION 17 IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. 18. Counterparts. This Assignment and any amendment hereof may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, but all of which together shall constitute one instrument. In proving this Assignment it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. [SIGNATURES BEGIN ON NEXT PAGE] 780574.01/0C N6003-044/6-8-06/sijlsij -5- IN WITNESS WHEREOF, Borrower has caused this Assignment to be duly executed as of the day and year first set forth above. "BORROWER" NDC SKYLINE ASSOCIATES, LLC, a Delaware limited liability company ~<'lo.J-...r- By: Curtis R. Olson, its President 780574.01/0C N6003-044/6-.8-06/sij/sij -6- CONSENT TO ASSIGNMENT The undersigned, the City of Santa Ana (the "City"), hereby acknowledges that Borrower, pursuant to the Collateral Assignment of Cooperative Agreement for Off-Site Improvements (the "Assignment"; capitalized terms used herein and not defined have the meanings assigned to them in the Assignment) to which this Consent to Assignment is attached, has assigned to Lender all of Borrower's right, title and interest in, to and under the Sandpointe Agreement, and as additional security for the full, timely and faithful payment and performance by Borrower of Borrower's obligations in respect of the Loan and under the Loan Agreement and the other Loan Documents and City hereby consents thereto and agrees that all of the covenants, agreements, representations and warranties of City to Borrower under the Sandpointe Agreement shall be for the benefit of Lender and shall continue performance of all of City's obligations under the Sandpointe Agreement upon enforcement of Lender's rights under the Assignment and becoming entitled to the rights under the Sandpointe Agreement pursuant to the terms of the Assignment. City acknowledges the express terms of the Assignment and agrees that it will not take any action which is inconsistent with the assignment by Borrower of its right, title and interest in and under the Sandpointe Agreement provided, however, that City shall not be obligated to recognize the rights of Lender to the Sandpointe Agreement until the occurrence of an Event of Default under any of the Loan Documents, and Lender's election to exercise any and all of Lender's rights and remedies hereunder upon written notice to Borrower and City of same. During the time that this Assignment, and any further assignment, shall remain in effect, in consideration for City's execution of this Consent, and by their acceptance of this Consent, Borrower and Lender hereby agree pursuant to the terms of the Assignment that City shall be obligated for performance to oniy one of Borrower or Lender at anyone time in connection with the Sandpointe Agreement and in no event shall City be liable or obligated to perform under the Sandpointe Agreement to more than one such party at the same time. Borrower and Lender agree that upon the occurrence of an Event of Default under any of the Loan Documents and upon written notification to Borrower and City by Lender of its election to exercise any and all of Lender's rights and remedies hereunder, City shall only be obligated for performance and/or liable to Lender under and with respect to the Sandpointe Agreement until such time as an assignment may occur pursuant to the terms and subject to the conditions of the Assignment. If the iicense granted to Borrower in the Assignment is automatically revoked as set forth therein, and if Borrower cures each and every Event of Default under any of the Loan Documents to the satisfaction of the Lender and Lender elects to reconvey to Borrower a license to use and enjoy the benefits of the Sandpointe Agreement, pursuant to the terms and subject to the conditions of this Assignment, City shall have been deemed to have consented to such reconveyance upon Borrower providing City with written notice of the same. City further agrees that nothing herein shall impose upon Lender any obligation for payment or performance in favor of City, unless and until Lender notifies City in writing that Lender has elected to assert Borrower's rights under the Sandpointe Agreement and assume Borrower's obligations thereunder. All notices, demands, consents, requests or other communications that are permitted or required to be given by any party to the other hereunder shall be in writing and given in the manner specified in the Assignment. [SIGNATURE PAGE FOLLOWS] 780574.01/0C N6003-044/6-B-06/sij/sij -7- City has executed this Consent to Assignment as of June _9_, 2006, and acknowledges that Lender has agreed to make the Loan, in part, on reliance on the statements and agreements of City herein contained. HE CITY OE ATTEST ~ By: Name: Its: APP ------.- 780574.01/0C N6003-044/6-8-06/sij/sij -8-