HomeMy WebLinkAboutASSIGNMENT OF MANAGEMENT AGREEMENT 24. 2q
ASSIGNMENT OF MANAGEMENT AGREEMENT
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 oftaxable 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 thereof 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
which, 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 Great Lakes Management Company,a Minnesota
corporation (the "Manager").
ACCORDINGLY, in consideration of the foregoing, the Company does hereby assign
to the Trustee all of its right, title and interest in and to a Management Agreement, dated as of
November 1, 2001, between the Company and the Manager (the "Management Agreement"),
providing for the day-to-day management of the Project.
The Company agrees that the Trustee does not assume any of the obligations or duties of
the Company under or with respect to the Management Agreement (the "Obligations") unless
and until the Trustee shall have given the Manager written notice that it has affirmatively
exercised its right to assume the Obligations 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 assume the Obligations, the Trustee shall have no
liability whatsoever for the performance of any of the Obligations.
The Company represents and warrants that there have been no prior assignments of the
Management Agreement,that the Management Agreement is a valid,enforceable agreement,that
none of the parties thereto 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 in the Management
Agreement 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 Management
Agreement 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 Management Agreement,to make
payments thereunder 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
Management Agreement 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 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.
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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. The Trustee may assign its rights
under this Assignment without the consent of the Company or the Manager. However, neither
the Company nor the Manager may assign either of their obligations or rights under the
Management Agreement or under this Assignment without the prior written consent of the
Trustee.
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.
[Remainder of Page Intentionally Blank]
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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 Management Agreement]
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MANAGER'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 Manager hereby consents to the
assignment of the Management Agreement 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 Manager has entered into the Management Agreement, whereby the
Manager has agreed to manage,operate,maintain,service and lease the Project for the Company.
2 The Management Agreement 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 Manager shall, at the Trustee's
written request,continue performance on the Trustee's behalf under the Management Agreement
in accordance with the terms thereof, provided that the Trustee assumes all of the Company's
payment obligations under the Management Agreement; provided further, that the Company
shall not be released from liability under the Management Agreement. The Trustee's assumption
of the Company's payment obligations shall be preceded and evidenced by at least three (3)
days' prior written notice to the Manager and the Manager may deal with the Company as the
"owner" under the terms of the Management Agreement until the Manager has received said
written notice. In no event shall the Trustee have any rights to direct the Manager as owner
under the Management Agreement until the Trustee has given the written notice provided for in
this paragraph 3 and until such time the Company may exercise the rights as owner thereunder.
4 Upon the assumption by the Trustee of all of the Obligations,the Trustee
may enforce the obligations of the Manager under the Management Agreement with the same
force and effect as if enforced by the Company and may perform the Obligations, and the
Manager will accept such performance in lieu of performance by the Company in satisfaction
of the Obligations. Notwithstanding the foregoing, the Manager does not waive any claims
against the Company under the Management Agreement.
5 The Manager will give the Trustee a copy of any written notice of default
given by the Manager to the Company under the Management Agreement.
6 The Manager will not terminate the Management Agreement 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 Management Agreement. In the event the Trustee so
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elects to cure any such default or to assume the payment obligations of the Company under the
Management Agreement, the Manager will not terminate the Management Agreement.
However,nothing herein shall require the Trustee to cure any default of the Company under the
Management Agreement.
7 The officer signing this consent on behalf of the Manager hereby certifies
that the Manager has full power under all state and local laws and regulations to perform all of
its obligations under the Management Agreement in accordance with the terms thereof and that
the Manager will comply with all applicable laws and regulations, local, state and federal, in
performing such obligations.
[Remainder of Page Intentionally Blank]
Dated: November , 2001
GREAT LAKES MANAGEMENTCOMPANY
By:
Its:
[Signature Page to Manager's Acknowledgment and Consent]
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