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HomeMy WebLinkAboutASSIGNMENT OF CONSTRUCTION/ARTHITECT'S CONTRACTS 16. (2) l6 , ASSIGNMENT OF CONSTRUCTION AND ARCHITECT'S CONTRACTS This Assignment is made as of this 1St day of November, 2001, by and between Orono Senior Housing, LLC a Minnesota limited liability company (the "Company"), and U.S. Bank Trust National Association(the "Trustee"). Recitals The City of Orono, Minnesota(the "City"), pursuant to an Indenture of Trust, dated as of November 1, 2001, between the City and the Trustee (the "Indenture"), will issue a series of revenue bonds in the aggregate principal amount of$ to be designated "City of Orono, Minnesota Senior Housing Revenue Bonds (Orono Woods Apartment Project), Series 2001A"(the"Series 2001A Bonds");a series of taxable revenue bonds in the aggregate principal amount of$ on a parity basis with the Series 2001A Bonds to be designated"City of Orono, Minnesota Senior Housing Revenue Bonds (Orono Woods Apartment Project), Taxable Series 2001B" (the "Series 2001B Bonds", and together with the Series 2001A Bonds, the"Senior Bonds");and a series of subordinate revenue bonds in the aggregate principal amount of$ to be designated"City of Orono,Minnesota Senior Housing Revenue Bonds (Orono Woods Apartment Project), Subordinate Series 2001C" (the "Subordinate Bonds", and together with the Senior Bonds, the "Series 2001 Bonds"). The City has agreed to loan the proceeds of the Series 2001 Bonds to the Company pursuant to a Loan Agreement, dated as of November 1, 2001, between the City and the Company (the "Loan Agreement"), to finance, among other things, the development, acquisition, construction and equipping of the Project as defined in the Loan Agreement. The Company will pay amounts due under the Loan Agreement and on the Bonds in accordance with the terms of the Loan Agreement. To secure payment of the Senior Bonds, the Company will execute and deliver to the Trustee, a Combination Mortgage Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents, dated as of November 1, 2001, covering certain property that, among other things, includes the real estate upon which the Project will be located(the "Land") and the buildings,improvements and fixtures now or hereafter located thereon(the"Mortgage"). To secure payment of the Subordinate Bonds, the Company will execute and deliver to the Trustee,a Subordinate Combination Mortgage Security Agreement,Fixture Financing Statement and Assignment of Leases and Rents, dated as of November 1,2001, covering the Land and the buildings, improvements and fixtures now or hereafter located thereon (the "Subordinate Mortgage"). In order to sell the Bonds,the underwriter of the Bonds(the"Underwriter")has required, as a condition to purchasing the Bonds, the execution hereof by the Company and the acknowledgment hereof and consent hereto by Frana and Sons, Inc., a Minnesota corporation (the "Contractor"), and Miller,Hanson, Westerbeck,Berger, Inc., a Minnesota corporation(the "Architect"). ACCORDINGLY, in consideration of the foregoing, the Company does hereby assign to the Trustee all of its right, title and interest in and to (i) those certain contracts (the "Construction Documents") so listed on SCHEDULE I attached hereto for construction of the Project, and(ii)that certain agreement or agreements so listed on SCHEDULE I (together,the "Architect's Contract"),by and between the Company and the Architect for the design and plans for the construction of the Project,true and correct copies of which Construction Documents and Architect's Contract(collectively,the"Project Documents")have been delivered to the Trustee and Underwriter this date, and(iii)the plans and specifications prepared and or to be prepared relating to such construction and improvements and all drawings related thereto (the "Plans"). The Company agrees that the Trustee does not assume any of the obligations or duties of the Company under or with respect to the Project Documents unless and until the Trustee shall have given the Contractor or Architect, or any combination thereof, as the case may be, written notice that it has affirmatively exercised its right to complete or cause the completion of construction of the Project following the occurrence of an Event of Default under the Loan Agreement, the Indenture, the Mortgage or the Subordinate Mortgage. In the event that the Trustee does not undertake to complete construction, the Trustee shall have no liability whatsoever for the performance of any of such obligations and duties. For the purpose of completing the Project the Trustee may, in its absolute discretion, reassign its right, title and interest in the Plans or the Project Documents upon notice to the Contractor or Architect, or any combination thereof, as the case may be, but without any requirement for the Company's consent. The Company represents and warrants that there have been no prior assignments of the Plans or the Project Documents, that the Project Documents are each a valid, enforceable agreement, that none of the parties are in default thereunder and that all covenants, conditions and agreements have been performed as required therein, except those not due to be performed until after the date hereof. The Company agrees that no change in the terms thereof shall be valid without the written approval of the Trustee. The Company agrees not to assign, sell, pledge, mortgage or otherwise transfer or encumber its interest in the Plans or the Project Documents so long as this Assignment is in effect. The Company hereby irrevocably appoints the Trustee as its attorney-in-fact to demand, receive, and enforce the Company's rights with respect to the Project Documents, to make payments under the Project Documents and give appropriate receipts,releases and satisfactions for and on behalf of and in the name of the Company or, at the option of the Trustee in the name of the Trustee, with the same force and effect as the Company could do if this Assignment had not been made. This Assignment shall constitute a perfected, absolute and present assignment provided that the Trustee shall have no right under this Assignment to enforce the provisions of the Project Documents until an Event of Default shall occur under the Loan Agreement,the Indenture, the Mortgage or the Subordinate Mortgage. Upon the occurrence of any such default or Event of Default, the Trustee may, without affecting any of its rights or remedies against the Company 2 under any other instrument, document or agreement, exercise its rights under this Assignment as the Company's attorney-in-fact in any manner permitted by law, and in addition, rights and remedies available after default to a secured party under the Uniform Commercial Code, as adopted in the State of Minnesota. If notice to the Company of any intended disposition of the collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given at least ten days prior to the date of intended disposition or other action. The Company hereby agrees to pay all costs and expenses (including without limitation reasonable attorneys' fees)which the Trustee may incur in exercising any of its rights under this Assignment. Subject to the aforesaid limitation on further assignment by the Company, this Assignment shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of the Trustee and its successors and assigns. This Assignment can be waived, modified, amended, terminated or discharged only explicitly in a writing signed by the Trustee. A waiver signed by the Trustee shall be effective only in a specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of the Trustee's rights or remedies hereunder. All rights and remedies of the Trustee shall be cumulative and may be exercised singularly or concurrently, at the Trustee's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to, nor bar the exercise or enforcement of, any other. IN WITNESS WHEREOF,the Company has executed this Assignment as of the day and year first above written. ORONO SENIOR HOUSING, LLC By: Its [Signature Page to Assignment of Construction and Architect's Agreement] Error!Unknown document property name. 3 CONTRACTOR'S ACKNOWLEDGMENT AND CONSENT In consideration of the Underwriter's purchase of the Bonds issued to finance the Project as described in the foregoing Assignment,the undersigned company(the "Contractor") hereby consents to the assignment of the Construction Documents to the Trustee and acknowledges and agrees with the Trustee as follows. Any capitalized term used but not defined herein, has the meaning assigned such term in the above Assignment, unless otherwise noted. 1 The Contractor has entered into the Construction Documents identified on Schedule Ito the Assignment,whereby the Contractor has agreed to act as general contractor in connection with the construction of the Project. 2 Each of the Construction Documents is in full force and effect, has not been modified or assigned and no event has occurred or failed to occur as of the date hereof which but for the passage of time, the giving of notice or both, would be a default thereunder. 3 Upon the occurrence of an Event of Default under the Loan Agreement, the Indenture, the Mortgage or the Subordinate Mortgage, the Contractor shall, at the Trustee's written request,continue performance on the Trustee's behalf under the Construction Documents in accordance with the terms thereof, provided that the Trustee assumes all of the Company's payment obligations under the Construction Documents and the Joint Venture shall be reimbursed in accordance with the Construction Documents for all work, labor and materials rendered by the Joint Venture on the Trustee's behalf;provided further,that the Company shall not be released from liability under the Construction Documents. The Trustee's assumption of the Company's payment obligations as owner under the Construction Documents shall be preceded and evidenced by at least three(3) days' prior written notice to the Contractor and the Contractor may deal with the Company as owner until the Contractor has received said written notice. In no event shall the Trustee have any rights to direct the "work" (as defined in the Construction Documents)(the"Work")under the Construction Documents until the Trustee has given the written notice provided for in this paragraph 3 and until such time as the Company may exercise the rights of the owner under the Construction Documents. 4 The Contractor acknowledges that the disbursement provisions contained in the Disbursing Agreement (the "Disbursing Agreement") among the Company, the Trustee and the title company named therein shall control the payments to the Contractor. 5 Upon the assumption by the Trustee of all of the Company's obligations under the Construction Documents,the Trustee may enforce the obligations of the Construction Documents with the same force and effect as if enforced by the Company and may perform the obligations of the Company, and the Contractor will accept such performance in lieu of performance by the Company in satisfaction of the Company's obligations thereunder. Notwithstanding the foregoing, the Contractor does not waive any claims against the Company under the Construction Documents. 1 6 The Contractor will give the Trustee a copy of any written notice of default given by the Contractor to the Company under the Construction Documents. 7 The Contractor will not terminate any of the Construction Documents on account of any default of the Company thereunder without written notice of such default to the Trustee and providing the Trustee thirty(30)days to cure the default or to assume the payment obligations of the Company under the applicable Construction Documents and commence completion of construction of the Project. In the event the Trustee so elects to complete the Project, the Contractor will not terminate any of the Construction Documents so long as the default of the Company thereunder is cured by the Trustee within thirty(30) days after written notice of such default is given to the Trustee and, in such event,provided that the Trustee shall pay the Contractor for all costs and expenses suffered or occurred by the Contractor in connection with re-commencement of the Work. However, nothing herein shall require the Trustee to cure any default of the Company under and of the Construction Documents. 8 The undersigned, on behalf of the Contractor, hereby certifies that the Contractor has full power under all state and local laws and regulations to perform its obligations under the Construction Documents with the Company in accordance with the terms thereof and that the Contractor will comply with all applicable laws and regulations,local,state and federal, in performing such obligations. Upon completion of the Work,the Contractor will certify to the Trustee, and to any assignee of the Trustee's obligations under the Indenture,that the Work has been completed in accordance with the Plans. [Remainder of Page Intentionally Blank] 2 Dated: November , 2001 FRANA AND SONS, INC. By: Its: [Signature Page to Contractor's Acknowledgment and Consent] 3 ARCHITECT'S ACKNOWLEDGMENT AND CONSENT In consideration of the Underwriter's purchase of the Bonds issued to finance the Project as described in the foregoing Assignment, the undersigned Architect hereby consents to the above Assignment and acknowledges and agrees with the Trustee as follows. Any capitalized term used but not defined herein, has the meaning assigned such term in the above Assignment, unless otherwise noted. 1. The Architect has entered into the Architect's Contract(as identified on Schedule I to the Assignment) with the Company whereby the Architect has agreed to act as Architect in connection with the design and construction of the Project. 2. The Architect's Contract is in full force and effect, has not been modified or assigned and no event has occurred or failed to occur as of the date hereof which but for the passage of time, the giving of notice or both, would be a default thereunder. 3. Upon the occurrence of an Event of Default under the Loan Agreement, the Indenture, the Mortgage or the Subordinate Mortgage, the Architect shall, at the Trustee's request, continue performance on the Trustee's behalf under the Architect's Contract in accordance with the terms thereof,provided that the Architect shall be reimbursed in accordance with the Architect's Contract for all work, labor and materials rendered by the Architect on the Trustee's behalf. 4. The disbursement provisions contained in the Loan Agreement shall control disbursement of the payments to the Architect. 5. The Trustee may enforce the obligations of the Architect's Contract with the same force and effect as if enforced by the Company; and may perform the obligations of the Company; and the Architect will accept such performance in lieu of performance by the Company in satisfaction of the Company's obligations thereunder. 6. The Architect will give the Trustee prompt written notice of any default by the Company under the Architect's Contract. 7. The Architect will not terminate the Architect's Contract on account of any default of the Company thereunder without written notice of such default to the Trustee and providing the Trustee thirty(30)days to cure the default. In the event the Trustee so elects to complete the Project, the Architect will not terminate the Architect's Contract so long as the default of the Company thereunder is cured by the Trustee within a reasonable time. However,nothing herein shall require the Trustee to cure any default of the Company under the Architect's Contract. 8. The Project as reflected in the Plans does and will comply, to the best of the Architect's professional knowledge,in all material respects,with all federal state and local laws, ordinances, codes and rules applicable to structures of the nature of the Project. The officer 1 signing this consent on behalf of the Architect hereby certifies that the Architect has full power under all state and local laws and regulations to perform all of its obligations under the Architect's Contract with the Company in accordance with the terms thereof and that the Architect will comply with all material provisions of applicable laws and regulations,local,state and federal, in performing such obligations. Upon completion of the Project,the Architect will certify to the Trustee, and to any assignee of the Trustee's obligations under the Indenture, that Project has been completed in accordance with the Plans and all applicable building codes to the best of his knowledge. [Remainder of Page Intentionally Blank] 2 Dated: November , 2001 MILLER,HANSON,WESTERBECK, BERGER,INC.,As Architect By: Its: [Signature Page to Architect's Acknowledgment and Consent] 3 itto 0 41�' SCHEDULE I --,.. ,..,..___, T LIST OF PROD Tc�M Ts ORONO h va 144 ) Y tiA Municipal Offices V " A1r , 'r �� �� Street Address: Mailing Address: C 1 ,0- assila ' i cuments 2750 Kelley Parkway P.O. Box 66 �� Orono, MN 55356 Crystal Bay, MN 55323-0066 1. Standard Form of Agreement Between Owner and Contractor dated , 2001 (the "Construction Contract") between Orono Senior Housing, LLC (the "Company") and Frana and Sons, Inc. (the "Contractor"), as the same may be amended from time to time. All other documents, from time to time, constituting a part of the "Contract Documents" under the Construction Contract, including those listed in Article 16 of the Construction Contract as it may be amended from time to time. Architect's Contract 1. Standard Form of Agreement Between Owner and Architect for Housing Services dated , 2001 (the "Architect's Contract")between Orono Senior Housing, LLC and Miller, Hanson, Westerbeck, Berger, Inc., as the same may be amended from time to time. All other documents, from time to time, constituting part of the Architect's Contract, as the same may be amended from time to time. Error!Unknown document property name. Telephone(952)249-46&J • Fax(952)249-4616 www.ci.orono.mn.us