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EXHIBIT 10.2
ASSIGNMENT OF RENTS AND LEASES
This Assignment is made as of the _____ day of December, 1995, between
Craftmade International, Inc., a Delaware corporation, having an office and
usual place of business at 000 X. Xxxxx, Xxxxxxx, Xxxxx 00000 (herein called
the "Assignor") and Allianz Life Insurance Company of North America, a
Minnesota corporation, whose address is c/o Allianz Investment Corporation, 55
Greens Farms Road, P.O. Box 5160, Westport, Connecticut 06881-5160 (herein
called the "Assignee").
Recitals
The Assignor has executed and delivered to the Assignee its promissory
note of even date herewith in the principal amount of $9,200,000 (herein called
the "Note").
To secure payment of the Note, the Assignor has executed and delivered
to the Assignee a Deed of Trust, Mortgage and Security Agreement of even date
herewith (herein, together with all future amendments and supplements thereto,
called the "Deed of Trust"), covering certain property (herein called the
"Mortgaged Property") which, among other things, includes the real estate
described in Exhibit A attached hereto and the buildings, improvements,
fixtures and personal property now or hereafter located thereon.
The Assignee, as a condition to making the loan evidenced by the Note,
has required the execution of this Assignment.
ACCORDINGLY, in consideration of the premises and in further
consideration of the sum of One Dollar paid by the Assignee to the Assignor,
the receipt of which is hereby acknowledged, the Assignor does hereby grant,
transfer and assign to the Assignee all of the right, title and interest of the
Assignor in and to (i) any and all present or future leases or tenancies,
whether written or oral, covering or affecting any or all of the Mortgaged
Property (all of which, together with any and all extensions, modifications and
renewals thereof, are hereinafter collectively referred to as the "Leases" and
each of which is referred to as a "Lease"), (ii) all security deposits, rents,
profits and other income or payments of any kind due or payable or to become
due or payable to the Assignor as the result of any use, possession or
occupancy of all or any portion of the Mortgaged Property or as the result of
the use of or lease of any personal property constituting a part of the
Mortgaged Property (all of which are hereinafter collectively referred to as
"Rents"), whether the Rents accrue before or after foreclosure of the Deed of
Trust, all for the purpose of securing:
(a) Payment of all indebtedness evidenced by the Note and
all other sums secured by the Deed of Trust or this Assignment; and
(b) Performance and discharge of each and every
obligation, covenant and agreement of the Assignor contained herein, in the
Deed of Trust and other Loan Documents (as such term is defined in the Deed of
Trust).
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THE ASSIGNOR WARRANTS AND COVENANTS that it is and will remain the
absolute owner of the Rents and Leases free and clear of all liens and
encumbrances other than the lien granted herein; that it has not heretofore
assigned or otherwise encumbered its interest in any of the Rents or Leases to
any person; that it has the right under applicable law, under the Leases, under
its organizational documents and otherwise to execute and deliver this
Assignment and keep and perform all of its obligations hereunder; that there
are no existing defaults under the provisions thereof on the part of any party
to the Leases; that no Rents have been waived, anticipated, discounted,
compromised or released, except as may be stated in the Leases; and that
tenants have no defenses, setoffs, or counterclaims against Assignor; that it
will warrant and defend the Leases and Rents against all adverse claims,
whether now existing or hereafter arising.
The Assignor further covenants and agrees with the Assignee as
follows:
1. Performance of Leases. The Assignor will faithfully abide by,
perform and discharge each and every obligation, covenant and agreement which
it is now or hereafter becomes liable to observe or perform under any present
or future Lease, and, at its sole cost and expense, enforce or secure the
performance of each and every obligation, covenant, condition and agreement to
be performed by the tenant under each and every Lease. The Assignor will
observe and comply with all provisions of law applicable to the operation and
ownership of the Mortgaged Property. The Assignor will give prompt written
notice to the Assignee of any notice of default on the part of the Assignor
with respect to any Lease received from the tenant thereunder, and will also at
its sole cost and expense, appear in and defend any action or proceeding
arising under, growing out of or in any manner connected with any Lease or the
obligations, duties or liabilities of the Assignor or any tenant thereunder.
The Assignor will not execute any Lease of the Mortgaged Property without
obtaining the prior written consent of the Assignee with respect to such Lease.
Assignor further agrees not to cancel, terminate or consent to or acquiesce in
any surrender or abandonment of any of the Leases without the prior written
consent of Assignee; except in the ordinary course of business not to commence
any action of ejectment or any summary proceedings for dispossession of the
tenant under any of the Leases, nor exercise any right of recovery of leased
property provided in any Leases; not to modify or in any way alter the
covenants, agreements, terms, conditions or obligations of any Leases without
the prior written consent of Assignee; not to renew or extend the term of any
Leases of the Premises unless an option therefor was originally so reserved by
tenants in the Leases for a fixed and definite rental; and, except in the
ordinary course of business, not to relocate any said tenant within the
Premises, nor consent to any modification of the express purposes for which the
Premises have been leased, nor consent to any subletting of the Premises or any
part thereof or to any assignment of the Leases by any tenant thereunder or to
any further or other assignment or subletting of any sublease, without the
prior written consent of the Assignee, notwithstanding any previous consent of
Assignee.
2. Collection of Rents. The Assignor will not collect or accept
any Rents for the use or occupancy of the Mortgaged Property for more than one
month in advance. Security deposits which do not exceed two months rent shall
not be deemed Rents for purposes of this paragraph.
3. Protecting the Security of This Assignment. Should the
Assignor fail to perform or observe any covenant or agreement contained in this
Assignment, then the
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Assignee, but without obligation to do so and without releasing the Assignor
from any obligation hereunder, may make or do the same in such manner and to
such extent as the Assignee may deem appropriate to protect the security
hereof, including, specifically, without limiting its general powers, the right
to appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of the Assignee, and also the right to
perform and discharge each and every obligation, covenant and agreement of the
Assignor contained in the Leases and in exercising any such powers to pay
necessary costs and expenses, employ counsel and pay reasonable attorneys'
fees. The Assignor will pay immediately upon demand all sums expended by the
Assignee under the authority of this Agreement, together with interest thereon
at the Default Rate stated in the Note, and the same shall be added to said
indebtedness and shall be secured hereby and by the Deed of Trust.
4. Present Assignment. This Assignment shall constitute a
perfected, absolute and present assignment, provided that the Assignor shall
have the right to collect, but not prior to accrual (except as permitted by
paragraph 2 above), all of the Rents, and to retain, use and enjoy the same
unless and until an Event of Default shall occur under the Deed of Trust or the
Assignor shall have breached any warranty or covenant in this Assignment. Any
security deposits received by Assignor prior to an Event of Default shall be
assigned and paid over to Assignor immediately upon the occurrence of the Event
of Default. Any Rents which accrue prior to an Event of Default under the Deed
of Trust but are paid thereafter shall be paid to the Assignee.
5. Survival of Obligation to Comply with Deed of Trust and This
Assignment. This Assignment is given as security in addition to the Deed of
Trust. The Assignor covenants and agrees to observe and comply with all terms
and conditions contained in the Deed of Trust and in this Assignment and to
prevent any Event of Default from occurring under the Deed of Trust. All of
the Assignor's obligations under the Deed of Trust and this Assignment shall
survive foreclosure of the Deed of Trust and the Assignor covenants and agrees
to observe and comply with all terms and conditions of the Deed of Trust and
this Assignment and to prevent any Event of Default from occurring under the
Deed of Trust throughout any period of redemption after foreclosure of the Deed
of Trust.
6. Default, Remedies. Upon the occurrence of any Event of
Default specified in the Deed of Trust or upon the breach of any warranty or
covenant in this Assignment, the Assignee may, at its option, at any time:
(a) in the name, place and stead of the Assignor and
without becoming a mortgagee in possession (i) enter upon, manage and operate
the Mortgaged Property or retain the services of one or more independent
contractors to manage and operate all or any part of the Mortgaged Property;
(ii) make, enforce, modify and accept surrender of the Leases; (iii) obtain or
evict tenants, collect, xxx for, fix or modify the Rents and enforce all rights
of the Assignor under the Leases; and (iv) perform any and all other acts that
may be necessary or proper to protect the security of this Assignment.
(b) with or without exercising the rights set forth in
subparagraph (a) above, give or require the Assignor to give notice to any or
all tenants under the Leases authorizing and directing the tenants to pay all
Rents under the Leases directly to the Assignee.
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(c) without regard to waste, adequacy of the security or
solvency of the Assignor, apply for, and the Assignor hereby consents to, the
appointment of a receiver of the Mortgaged Property, whether or not foreclosure
proceedings have been commenced under the Deed of Trust, and if such
proceedings have been commenced, whether or not a foreclosure sale has
occurred.
The exercise of any of the foregoing rights or remedies and the
application of the rents, profits and income pursuant to paragraph 7, shall not
cure or waive any Event of Default (or notice of default) under the Deed of
Trust or invalidate any act done pursuant to such notice.
7. Application of Rents, Profits and Income. All Rents collected
by the Assignee or the receiver each month shall be applied as follows:
(a) to payment of all reasonable fees of the receiver
approved by the court;
(b) to payment of all tenant security deposits then owing
to tenants under any of the Leases;
(c) to payment of all prior or current real estate taxes
and special assessments with respect to the Mortgaged Property, or if the Deed
of Trust requires periodic escrow payments for such taxes and assessments, to
the escrow payments then due;
(d) to payment of all premiums then due for the insurance
required by the provisions of the Deed of Trust, or if the Deed of Trust
requires periodic escrow payments for such premiums, to the escrow payments
then due;
(e) to payment of expenses incurred for normal
maintenance of the Mortgaged Property; and
(f) to the Assignee for payment of the indebtedness
secured by the Deed of Trust or this Assignment, but no such payment made after
acceleration of the indebtedness shall affect such acceleration.
The rights and powers of the Assignee under this Assignment and the
application of Rents under this paragraph 7 shall continue during the pendency
of any proceedings for the foreclosure and/or sale of the Mortgaged Property,
or any part thereof, unless all indebtedness secured hereby has been fully
satisfied.
8. No Liability for Assignee. The Assignee shall not be obligated
to perform or discharge, nor does it hereby undertake to perform or discharge,
any obligation, duty or liability of the Assignor under the Leases. This
Assignment shall not operate to place upon the Assignee responsibility for the
control, care, management or repair of the Mortgaged Property or for the
carrying out of any of the terms and conditions of the Leases. The Assignee
shall not be responsible or liable for any waste committed on the Mortgaged
Property, for any dangerous or defective condition of the Mortgaged Property,
for any negligence in the management, upkeep, repair or control of said
Mortgaged Property or for failure to collect the Rents.
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9. Assignor's Indemnification. THE ASSIGNOR SHALL AND DOES
HEREBY AGREE TO INDEMNIFY AND TO HOLD THE ASSIGNEE HARMLESS OF AND FROM ANY AND
ALL CLAIMS, DEMANDS, LIABILITY, LOSS OR DAMAGE (INCLUDING ALL COSTS, EXPENSES,
AND REASONABLE ATTORNEYS' FEES IN THE DEFENSE THEREOF) ASSERTED AGAINST,
IMPOSED ON OR INCURRED BY THE ASSIGNEE IN CONNECTION WITH OR AS A RESULT OF
THIS ASSIGNMENT OR THE EXERCISE OF ANY RIGHTS OR REMEDIES UNDER THIS ASSIGNMENT
OR UNDER THE LEASES OR BY REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS OF
THE ASSIGNEE TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS OR AGREEMENTS
CONTAINED IN THE LEASES. THE FOREGOING INDEMNITY IS INTENDED TO BE APPLICABLE
AND BINDING UPON THE ASSIGNOR NOTWITHSTANDING THAT A CLAIM, DEMAND, LIABILITY,
LOSS OR DAMAGE ARISES OR IS ALLEGED TO HAVE ARISEN FROM THE SOLE OR CONCURRENT
NEGLIGENCE OF ASSIGNEE; HOWEVER, SAID INDEMNITY IS NOT INTENDED TO INCLUDE ANY
CLAIM, LIABILITY, LOSS OR DAMAGE ARISING FROM THE WILLFUL MISCONDUCT OF
ASSIGNEE. SHOULD THE ASSIGNEE INCUR ANY LIABILITY UNDER THE FOREGOING
INDEMNITY, THE AMOUNT THEREOF, TOGETHER WITH INTEREST THEREON, AT THE RATE
STATED IN THE NOTE, SHALL BE SECURED HEREBY AND BY THE DEED OF TRUST AND THE
ASSIGNOR SHALL REIMBURSE THE ASSIGNEE THEREFOR IMMEDIATELY UPON DEMAND.
10. Authorization to Tenant. Upon notice from the Assignee that
it is exercising the remedy set forth in paragraph 6(b) of this Assignment, the
tenants under the Leases are hereby irrevocably authorized and directed to pay
to the Assignee all sums due under the Leases, and the Assignor hereby consents
and directs that said sums shall be paid to the Assignee without the necessity
for a judicial determination that a default has occurred hereunder or under the
Deed of Trust or that the Assignee is entitled to exercise its rights
hereunder, and to the extent such sums are paid to the Assignee, the Assignor
agrees that the tenant shall have no further liability to the Assignor for the
same. The signature of the Assignee alone shall be sufficient for the exercise
of any rights under this Assignment and the receipt of the Assignee alone for
any sums received shall be a full discharge and release therefor to any such
tenant or occupant of the Mortgaged Property. Checks for all or any part of
the Rents collected under this Assignment shall upon notice from the Assignee
be drawn to the exclusive order of the Assignee.
11. Satisfaction. Upon the payment in full of all indebtedness
secured hereby as evidenced by a recorded release of the Deed of Trust, this
Assignment shall, without the need for any further satisfaction or release,
become null and void and be of no further effect.
12. Assignee an Attorney-In-Fact. The Assignor hereby irrevocably
appoints the Assignee, and its successors and assigns, as its attorney-in-fact
for the purposes set forth in this paragraph 12, which appointment is coupled
with an interest and shall be effective upon the occurrence of an Event of
Default. Pursuant to such appointment, upon the occurrence of an Event of
Default Assignee shall be the attorney-in-fact for Assignor with the right but
not the duty to exercise any rights or remedies hereunder and to execute and
deliver during the term of this Assignment such instruments as the Assignee may
deem appropriate to make this Assignment and any further assignment effective,
including without limiting the generality of the foregoing, the right to
endorse on behalf and in the name of the Assignor all checks from tenants in
payment of Rents that are made payable to the Assignor.
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13. Assignee Not a Mortgagee in Possession. Nothing herein
contained and no actions taken pursuant to this Assignment shall be construed
as constituting the Assignee a mortgagee in possession.
14. Specific Assignment of Leases. Until the indebtedness secured
hereby shall have been paid in full, Assignor will deliver to the Assignee
executed copies of any and all other and future Leases upon all or any part of
the Mortgaged Property. The Assignor will transfer and assign to the Assignee,
upon written notice by the Assignee, any and all specific Leases that the
Assignee requests. Such transfer or assignment by the Assignor shall be upon
the same or substantially the same terms and conditions as are herein
contained, and the Assignor will properly file or record such assignments, at
the Assignor's expense, if requested by the Assignee.
15. Unenforceable Provisions Severable. All rights, powers and
remedies provided herein may be exercised only to the extent that the exercise
thereof does not violate any applicable law, and are intended to be limited to
the extent necessary so that they will not render this Assignment invalid,
unenforceable or not entitled to be recorded, registered or filed under any
applicable law. If any term of this Assignment shall be held to be invalid,
illegal or unenforceable, the validity of other terms hereof shall in no way be
affected thereby. It is the intention of the parties hereto, however, that
this Assignment shall confer upon the Assignee the fullest rights, remedies and
benefits available pursuant to the laws of the State of Texas.
16. Successors and Assigns. The covenants and agreements herein
contained shall bind, and the rights hereunder shall inure to, the respective
successors and assigns of the Assignor and the Assignee, including any
purchaser at a foreclosure sale.
17. Captions; Amendments; Notices. The captions and headings of
the paragraphs of this Assignment are for convenience only and shall not be
used to interpret or define the provisions of this Assignment. This Assignment
can be amended only in writing signed by the Assignor and the Assignee. Any
notice from this Assignment to the Assignor under this Assignment shall be
deemed to have been given when given by the Assignee in accordance with the
requirements for notice by the Mortgagee under the Deed of Trust.
18. Counterparts. This Assignment may be executed in any number
of counterparts, each of which shall be an original but all of which shall
constitute one instrument.
19. Notices. Any notice which any party hereto may desire or may
be required to give to any other party shall be in writing and the mailing
thereof by certified mail, or equivalent, to the respective party's address as
set forth hereinabove or to such other place such party may by notice in
writing designate as its address, shall constitute service of notice hereunder.
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IN WITNESS WHEREOF the Assignor has executed this Assignment as of the
day and year first-above written.
CRAFTMADE INTERNATIONAL, INC.,
a Delaware corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
STATE OF _________________________ Section
Section
COUNTY OF ________________ Section
This instrument was acknowledged before me on the _____ day of
December, 1995, by _________________________, _______________________ of
Craftmade International, Inc., a Delaware corporation, on behalf of said
corporation.
_________________________________
Notary Public
My Commission Expires:
_____________________
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EXHIBIT A
LEGAL DESCRIPTION
Being Lot 3R of REPLAT OF A PORTION OF "FREEPORT NORTH", an addition to the
City of Coppell, Texas, according to the Map thereof recorded in Volume 95245,
Page 2050, Map Records of Dallas County, Texas.
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