ASSIGNMENT OF CONTRACTOR'S AGREEMENT
THIS ASSIGNMENT OF CONTRACTOR'S AGREEMENT (this “Assignment”), dated __________ ____, 2005, is made by______________________, a Pennsylvania limited liability company (“Assignor”), for the benefit of _______________________________ (“Assignee”).
W I T N E S S E T H:
WHEREAS, Assignor and Assignee have executed that certain Construction Loan Agreement of even date herewith (as the same may from time to time be amended, modified, restated, extended or substituted, the “Loan Agreement”);
WHEREAS, pursuant to the Loan Agreement, Assignee has agreed to make a construction/permanent loan to Assignor (the “Loan”) in the principal amount of $_______________________ upon the terms and conditions contained in the Loan Agreement;
WHEREAS, as evidence of the indebtedness incurred under the Loan Agreement, Assignor has executed and delivered to Assignee that certain Promissory Note of even date herewith, payable to Assignee in the principal amount of the Loan (as the same may from time to time be amended, modified, restated, extended or substituted the “Note”), payment of which is secured by that certain Mortgage and Security Agreement of even date herewith (as the same may from time to time be amended, modified, restated, extended or substituted, the “Mortgage”) from Assignor covering the Mortgaged Property (as defined in the Mortgage), as well as by other security (collectively, the “Property”); and
WHEREAS, the execution and delivery of this Assignment is a condition precedent to the performance by Assignee of its obligations under the Loan Agreement.
NOW, THEREFORE, in consideration of the making of the Loan by Assignee and to secure the indebtedness evidenced by the Note and the performance and observance of all obligations, covenants and conditions in the Note, the Mortgage and other “Loan Documents” (as such term is defined in the Loan Agreement) and for other good and valuable consideration in hand paid, the receipt and sufficiency of which is hereby acknowledged, Assignor, intending to be legally bound, agrees as follows:
1. Assignment. Assignor does hereby GRANT, SELL, CONVEY, ASSIGN, TRANSFER, SET OVER AND DELIVER UNTO ASSIGNEE all the right, title and interest of Assignor in and to the following documents now or hereafter executed by Assignor:
(i) that certain Agreement Between Owner and Contractor (AIA Form), relating to the construction (the "Construction") of a _______________________ in ____________________ Township, __________________ County, Pennsylvania (the “Improvements”) between Assignor and ____________________________, as contractor (the “General Contractor”), together with any and all extensions, modifications, amendments and renewals thereof (hereinafter collectively called the “General Contract”);
(ii) all contracts and all subcontracts together with any and all extensions, modifications, amendments and renewals thereof, which are entered into by Assignor or the General Contractor (to the extent of Assignor's interest therein) in connection with the performance of the work or the supply of the materials required for the Construction;
(iii) all guarantees, warranties and other undertakings covering the quality or performance of the work or the quality of the materials required by the General Contract, contracts and subcontracts;
(iv) all building permits, governmental permits, licenses, and all other permits, approvals and authorizations now or hereafter issued;
(v) all maintenance and service contracts entered into by Borrower in connection with the Improvements; and
(vi) all trade names, trademarks and logos of Borrower used in connection with the Construction, development, use or operation of the Improvements.
The items referred to in paragraphs (i) through (vi) above are sometimes hereinafter collectively referred to as the “Construction and Operating Documents.”
TO HAVE AND TO HOLD THE SAME UNTO ASSIGNEE, its successors and assigns, to secure the payment of all sums, including, without limitation, the payment of principal and interest now or at any time due Assignee under the Note, the Loan Agreement or the other Loan Documents and any extension, modifications, amendments and renewals thereof, and the performance and discharge of the obligations, covenants, conditions and agreements of Assignor contained herein and in the Note, the Loan Agreement and the other Loan Documents and any extensions, modifications, amendments and renewals thereof.
Until an Event of Default has occurred, Assignor may continue to demand, receive and enforce said rights, interests and benefits under and in accordance with the terms of the Permits and the Contracts.
2. Covenants of Assignor. Assignor hereby agrees as follows:
A. Performance. Assignor shall abide by, perform and discharge each and every obligation, covenant, condition and agreement of the Construction and Operating Documents to be performed by Assignor, and to enforce performance by the other party thereto of such other party's obligations, covenants, conditions and agreements to be performed by such other party.
B. Events of Default. The occurrence of any of the following shall constitute an Event of Default hereunder: (i) a breach by Assignor of any covenant, condition, agreement, representation or warranty in this Assignment not cured within thirty (30) days; or (ii) the occurrence of an “Event of Default” as defined in the Loan Agreement, the Mortgage or any of the other Loan Documents.
C. Remedies. Upon the occurrence of any Event of Default, Assignee shall have the right (but not the obligation), without notice to or demand on Assignor: (i) to declare all sums evidenced or secured by the Loan Documents, and hereby, immediately due and payable, (ii) to exercise any and all rights and remedies provided under the Loan Documents or hereunder, including, but not limited to, acceleration of all sums due under the Note, as well as such remedies as may be available at law or in equity, and (iii) to correct any such default in such manner and to such extent as Assignee may deem necessary to protect the security hereof, including specifically, without limitation, the right (but not the obligation) to appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Assignee, and also the right (but not the obligation) to perform and discharge each and every obligation, covenant, condition and agreement of Assignor under the Construction and Operating Documents, and, in exercising any such powers, to pay necessary costs and expenses, employ counsel, and incur and pay attorneys’ fees and expenses. Assignee shall not be obligated to perform or discharge, nor does it hereby undertake to perform or discharge, any obligation, duty or liability under any of the Construction and Operating Documents, or by reason of this Assignment.
D. Enforcement of Construction and Operating Documents. At any time after the occurrence of an Event of Default, Assignee may, at its option, without notice, and without regard to the adequacy of security for the indebtedness hereby secured, either in person or by agent, with or without bringing any action or proceeding, or by a receiver to be appointed by a court at any time hereafter, enforce for its own benefit the Construction and Operating Documents, or any of them. The exercise of any rights under this Assignment shall not be deemed to cure or waive any default under any of the Loan Documents, or waive, modify or affect any notice of default under any of the Loan Documents, or invalidate any act done pursuant to such notice.
E. Performance of the Construction and Operating Documents. Following an Event of Default, the General Contractor, and each party to the Construction and Operating Documents, upon written notice from Assignee of the occurrence of an Event of Default, shall be and is hereby authorized by Assignor to perform the General Contract, or their respective Construction and Operating Documents, for the benefit of Assignee in accordance with the terms and conditions thereof without any obligation to determine whether or not such an Event of Default has in fact occurred.
F. No Liability; Indemnification of Assignee. In the exercise of the powers herein granted to Assignee, no liability shall be asserted or enforced by Assignor (or any other party to the Construction and Operating Documents) against Assignee, all such liability being hereby expressly waived and released by Assignor (or any such party) except claims resulting from Assignee’s gross negligence or willful misconduct. Assignor hereby agrees to indemnify and hold Assignee free and harmless from and against any and all liability, expense, cost, loss or damage which Assignee may incur by reason of any act or omission of Assignor under any of the Construction and Operating Documents except liability, expenses, cost, loss or damage arising from Assignee’s gross negligence or willful misconduct. Should Assignee incur any liability, expense, cost, loss or damage (i) under the Construction and Operating Documents for which it is to be indemnified by Assignor as aforesaid, or (ii) by reason of the exercise of Assignee's rights hereunder (including, but not limited to, the exercise of the rights granted to Assignee under paragraph 2.C hereof), the amount thereof, including costs, expenses, attorneys' fees and expenses, shall be secured hereby and by the Mortgage and all other Loan Documents (whether or not such amount, when aggregated with other sums secured by the Mortgage, exceeds the face amount of the Note) and shall be due and payable immediately upon demand by Assignee, and bear interest at the “Default Rate” (as defined in the Note).
G. Assignment by Assignee. This Assignment shall be assignable by Assignee to any successor, participant or assignee of Assignee under the Loan Agreement and all representations, warranties, covenants, powers and rights herein contained shall be binding upon, and shall inure to the benefit of, Assignor and Assignee and their respective legal representatives, successors and assigns.
3. Representations, Warranties and Covenants. Assignor hereby represents, warrants and covenants to Assignee that:
A. Assignor has not previously assigned, sold, pledged, transferred, mortgaged, hypothecated or otherwise encumbered the Construction and Operating Documents or any of them, or its right, title and interest therein.
B. Assignor shall not assign, sell, pledge, transfer, mortgage, hypothecate or otherwise encumber its interests in the Construction and Operating Documents or any of them.
C. Assignor has not performed any act which would prevent Assignee from operating under or enforcing any of the terms and conditions hereof or which would limit Assignee in such operation or enforcement.
D. Assignor is not in default under the Construction and Operating Documents or any of them, and, to the best of Assignor's knowledge, no other party to the respective Construction and Operating Documents is in default thereunder.
E. Except as set forth in the Loan Agreement, no amendments to any of the Construction and Operating Documents to which Assignor is a party shall be made without the prior written consent of Assignee.
F. Upon execution of any of the Construction and Operating Documents, Assignor shall deliver a copy of an executed original of such Construction and Operating Documents to Assignee and shall require the General Contractor to execute and deliver to Assignee a consent to this Assignment, such consent to be identical to the form of Consent and Agreement attached hereto as Exhibit A.
4. 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 and shall be deemed to have been properly given if hand delivered or if mailed by United States registered or certified mail, postage prepaid, return receipt requested, or by nationally recognized overnight courier service addressed as follows:
If to Assignee:
If to Assignor:
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.
5. Incorporation of Loan Agreement; Conflict. Any provision in the Loan Agreement that pertains to this Assignment shall be deemed to be incorporated herein as if such provision were fully set forth in this Assignment. In the event of any conflict between the terms of this Assignment and the terms of the Loan Agreement, the terms of the Loan Agreement shall prevail. A provision in this Assignment shall not be deemed to be inconsistent with the Loan Agreement by reason of fact that no provision in the Loan Agreement covers such provision in this Assignment.
6. Collateral Assignment. This Assignment is made for collateral purposes only and the duties and obligations of Assignor under this Assignment shall terminate when all sums due Assignee under the Loan Documents are paid in full and all obligations, covenants, conditions and agreements of Assignor contained in the Loan Documents are performed and discharged.
7. Choice of Law; No Marshaling. This Assignment shall be governed by the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws provisions. To the greatest extent permitted by law, Assignor hereby waives any and all rights to require marshaling of assets by Assignee.
8. No Third-Party Rights. It is expressly intended, understood and agreed that this Assignment and the other Loan Documents are made and entered into for the sole protection and benefit of Assignor and Assignee, and their respective successors and assigns; that no other person or persons shall have any right at any time to action hereon or rights to the proceeds of the Construction Loan evidenced and secured by the Loan Documents; that such Construction Loan proceeds do not constitute a trust fund for the benefit of any third party; that no third party shall under any circumstances be entitled to any equitable lien on any such undisbursed Construction Loan proceeds at any time; and Assignee shall have a lien upon and right to direct application of any such undisbursed Construction Loan proceeds as provided in the Loan Documents.
9. Relationship of Parties. The relationship between Assignee and Assignor is solely that of a lender and borrower, and nothing contained herein or in any of the Loan Documents shall in any manner be construed as making the parties hereto partners, joint venturers or any other relationship other than lender and borrower.
10. Security Agreement. This Assignment shall constitute a security agreement within the meaning of the Uniform Commercial Code of the Commonwealth of Pennsylvania and Assignor hereby grants to Assignee a security interest in each of the Construction and Operating Documents subject to the provisions hereof.
11. No Modification. No provision hereof shall be modified or limited by course or usage or trade except by a written agreement expressly referring hereto and to the provision so modified or limited and signed by Assignor and Assignee.
12. Waiver. The acceptance by Assignee of this Assignment with all of the rights, powers, privileges and authority created hereby shall not, prior to entry upon and taking possession of the Improvements, or the Construction and Operating Documents by Assignee, be deemed or construed to constitute Assignee a "mortgagee in possession," obligate Assignee to appear in or defend any action or proceeding relating to the Improvements or the Construction and Operating Documents or to take any action hereunder or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under any of the Construction and Operating Documents, nor shall Assignee be liable in any way for any injury or damage to any person or property sustained by any person or persons, firm or corporation in or about the Improvements, and Assignee shall be indemnified and held free and harmless from and against any and all liability, expense, cost, loss and damage therefrom except claims resulting from Assignee’s gross negligence or willful misconduct.
13. Severability. In case any one or more of the provisions contained in this Assignment shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and this Assignment shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
14. Capitalized Terms. All capitalized terms used herein shall have the same meanings as set forth in the Loan Agreement, unless otherwise defined herein.
IN WITNESS WHEREOF, this Assignment has been duly executed as of the day and year first above written.
_________________________ By: _____________________________________
Exhibit A: Contractor’s Consent
COMMONWEALTH OF PENNSYLVANIA )
COUNTY OF _________________ )
Before me, a notary public in and for said County and State, personally appeared ______________________, President of ________________________, a Pennsylvania limited liability company, who acknowledged execution of the foregoing Assignment of Contractor’s Agreement in the capacity therein stated for and on behalf of said company.
WITNESS my hand and notarial seal this ____ day of ________, 2005.
Notary Public - Signature
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