EXHIBIT 10.17
LOAN NO.: 00-0000000 THE MAYFLOWER APARTMENTS
VIRGINIA BEACH, VIRGINIA
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ASSIGNMENT OF WARRANTIES AND OTHER CONTRACT RIGHTS
CRIT-VA, INC.
TO
FIRST UNION NATIONAL BANK
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ASSIGNMENT OF WARRANTIES AND OTHER CONTRACT RIGHTS
THIS ASSIGNMENT OF WARRANTIES AND OTHER CONTRACT RIGHTS (this
"Assignment"), made as of the 12th day of December, 2000, is by CRIT-VA, INC., a
Virginia corporation ("Borrower"), whose address is 000 Xxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, in favor of FIRST UNION NATIONAL BANK, a national
banking association ("Lender"), whose address is One First Union Center, 301
South College Street, Mailcode NC 0166, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Contract Finance.
W I T N E S S E T H:
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THAT, WHEREAS, Borrower has executed and delivered to Lender a
Promissory Note dated of even date herewith (the "Note"), payable to the order
of Lender, which Note evidences a loan made by Lender to Borrower; and
WHEREAS, the Note is secured by that certain Deed of Trust and Security
Agreement dated of even date herewith (the "Deed of Trust"), from Borrower, as
grantor, for the benefit of Lender, as beneficiary, encumbering that certain
real property situated at Virginia Beach, Commonwealth of Virginia, as more
particularly described on Exhibit A attached hereto and by this reference
incorporated herein (the "Real Estate"); and
WHEREAS, Borrower is desirous of further securing to Lender the
repayment of the indebtedness evidenced by the Note and the performance of the
other terms, covenants and agreements contained herein and in the Note, the Deed
of Trust and any other Loan Document (as defined in the Deed of Trust).
NOW, THEREFORE, in consideration of the making of the loan evidenced by
the Note by Lender to Borrower and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrower hereby
irrevocably, absolutely and unconditionally assigns and transfers to Lender, its
successors and assigns, all of Borrower's right, title and interest in and to
the following, to the extent assignable:
(A) any and all contracts and agreements with management agents,
leasing agents, sales agents, service and maintenance agents (collectively, the
"Contracting Parties", or, singularly, a "Contracting Party"), whether now
existing or hereafter arising, relating to the management, operation, leasing,
sale, maintenance and repair of the Real Estate and/or the apartment complex
consisting of a total of 265 units and other improvements located on the Real
Estate (the "Improvements") (the Real Estate and the Improvements are sometimes
hereinafter collectively referred to as the "Property"), including, without
limitation, management agreements, equipment leases and personal property leases
(collectively, the "Contracts" or, singularly, a "Contract"); and
(B) any and all warranties and guaranties relating to the Property or
any fixtures, equipment or personal property owned by Borrower and located on
and/or used in connection with the Property, whether now existing or hereafter
arising; and
(C) any and all permits, licenses, certificates of use and occupancy
(or their equivalent) and applications and approvals issued by any governmental
authority or agency relating to the construction, ownership, operation and/or
use of the Property, whether now existing or hereafter arising.
(The Contracts, together with the items referred to in subparagraphs (B) and (C)
above, are sometimes herein collectively referred to as the "General
Intangibles".)
This Assignment is made upon the following terms and conditions:
1. Borrower represents, warrants and covenants to and with Lender that:
(a) Borrower shall not make any changes in or amendments to any of the General
Intangibles without the prior written consent of Lender, which consent shall not
be unreasonably withheld, provided, however, that notwithstanding the foregoing,
Lender's consent shall not be required with respect to changes in or amendments
to any Contract (i) which does not relate to the overall management or operation
of the Property, (ii) which is terminable without cause and without payment of
any penalty or termination fee on thirty (30) days' notice, and (iii) under
which the Contractor does not have any right, by reason of applicable law or
otherwise, to assert a lien against the Property which is superior to the lien
of the Deed of Trust; (b) Borrower shall not tender or accept a surrender or
cancellation of any of the General Intangibles without the prior written consent
of Lender where such surrender or cancellation would materially adversely affect
the Property or Lender's interest therein or Lender's security or where such
surrender or cancellation would violate the terms of any Loan Document; (c)
Borrower shall promptly provide to Lender copies of all changes in or amendments
to the Contract, which would increase the fees payable by Borrower thereunder by
more than $10,000, whether or not Lender's consent thereto is required pursuant
to clause (a) above and Borrower shall promptly notify Lender in writing of any
surrender or cancellation of a Contract whether or not Lender's consent thereto
is required pursuant to clause (b) above; (d) except as otherwise expressly
permitted by the terms of the Deed of Trust, Borrower has not assigned or
granted and will not assign or grant a security interest in any of the General
Intangibles to anyone other than Lender; (e) to Borrower's knowledge, Borrower's
interest in the General Intangibles is not subject to any claim, setoff, lien,
deduction or encumbrance of any nature (other than the encumbrance created
hereby, the encumbrance created by the Deed of Trust and those subordinate
encumbrances, if any, created in connection with any junior encumbrances on the
Real Estate expressly permitted by the terms of the Deed of Trust); (f) Borrower
has full power and authority to make this Assignment; (g) Borrower shall make
all required payments and otherwise perform its obligations under the General
Intangibles; and (h) Borrower shall give immediate notice to Lender of any
notice of any material default served upon Borrower with respect to its
obligations under any of the General Intangibles and, at the sole cost and
expense of Borrower, shall enforce or secure the performance of each and every
material obligation of the Contracting Parties to be kept or performed under the
Contracts.
2. Neither this Assignment nor any action or actions on the part of
Lender (including, without limitation, any assumption by Lender of the rights
and obligations under the General Intangibles pursuant to the provisions of
Paragraph 3 hereof) shall relieve Borrower of
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any obligation under the General Intangibles and Borrower shall continue to be
primarily liable for all obligations thereunder, Borrower hereby agreeing to
perform each and all of its obligations under the General Intangibles. Borrower
hereby protects, defends, indemnifies and holds Lender free and harmless from
and against any and all loss, cost, liability or expense (including, but not
limited to, reasonable attorneys' fees and accountants' fees) resulting from any
failure of Borrower to so perform under the General Intangibles.
3. Upon the occurrence and continuance of an Event of Default hereunder
or under any of the other Loan Documents, Lender may, but shall not be obligated
to, assume any or all of the obligations of Borrower under any or all of the
Contracts and/or exercise the rights, benefits and privileges of Borrower under
any or all of the General Intangibles, to the extent permitted by applicable law
and the terms of the Contracts or General Intangibles as the case may be.
4. Upon the occurrence and continuance of an Event of Default hereunder
or under any of the other Loan Documents, Lender may give notice to any or all
of the Contracting Parties, either requiring the Contracting Party to continue
performance under its Contract or, alternatively, terminating the Contract. This
Assignment shall constitute a direction to and full authority to the Contracting
Parties under the Contracts to act at Lender's written direction and otherwise
perform on Lender's behalf under the Contracts, without proof of the event of
default relied upon. The Contracting Parties shall be entitled to rely upon
written notice from Lender that Lender has assumed all of the rights and
obligations of Borrower under the applicable Contract without any inquiry into
whether Borrower is in default hereunder or under any of the other Loan
Documents. Such assumption of a Contract by Lender shall be evidenced by written
notice from Lender to the applicable Contracting Party. Under no circumstances
shall Lender be deemed by any party to have assumed Borrower's rights and
obligations under a Contract unless and until such written notice is delivered
to the Contracting Party in accordance with the foregoing provision.
5. Lender shall have the right at any time, but shall have no
obligation, to take in its name or in the name of Borrower, or otherwise, such
action as Lender may at any time or from time to time determine to be reasonably
necessary to cure any default under the General Intangibles or to protect the
rights of Borrower or Lender thereunder. Lender shall incur no liability to
Borrower if any action taken by Lender or in Lender's behalf in good faith
pursuant to this Assignment shall prove to be in whole or in part inadequate or
invalid. Borrower hereby protects, defends, indemnifies and holds Lender and its
affiliated entities, free and harmless from and against any and all loss, cost,
liability or expense (including, but not limited to, attorneys' fees and
accountants' fees) to which Lender may be exposed, or that Lender may incur, in
exercising any of its rights under this Assignment, unless caused by the
intentional misconduct or gross negligence of Lender as finally determined by a
court of competent jurisdiction.
6. Borrower hereby irrevocably constitutes and appoints Lender its true
and lawful attorney-in-fact in Borrower's name or in Lender's name, or
otherwise, to, from and after the occurrence of an Event of Default by Borrower
hereunder or under any of the other Loan Documents to enforce all of the rights
of Borrower under the General Intangibles. It is hereby recognized that the
power of attorney herein granted is coupled with an interest and shall not be
revocable so long as any sums are outstanding under the loan evidenced by the
Note.
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7. Borrower shall deliver to Lender a true, correct and complete copy
of each Contract promptly after it has been executed and delivered by the
parties thereto.
8. Notwithstanding anything to the contrary contained herein, Lender
shall have no right under this Assignment to assume any Contract or to exercise
any rights, benefits or privileges of Borrower under any of the other General
Intangibles unless and until an Event of Default shall have occurred and be
continuing under the terms of this Assignment or the terms of any of the other
Loan Documents and such default shall not have been cured within any applicable
grace or cure period.
9. Intentionally omitted.
10. This Assignment and the agreements and undertakings of Borrower
hereunder shall be binding upon Borrower, its successors and assigns and any
subsequent owner of the Property, and shall inure to the benefit of Lender and
its successors and assigns and any purchaser of any interest of Lender in the
Note, the Deed of Trust and the other Loan Documents.
11. Borrower covenants and agrees to make, execute and deliver all such
further or additional instruments as may be reasonably necessary to satisfy the
intents and purposes hereof and to perfect the assignment made hereby.
12. This Assignment shall be construed under and governed by the laws
of the State in which the Property is located, except to the extent that any of
such laws may now or hereafter be preempted by Federal law, in which case such
Federal law shall so govern and be controlling. In any action brought under or
arising out of this Assignment or the other Loan Documents, Borrower hereby
consents to the jurisdiction of any competent court within the State in which
the Property is located and consents to service of process by any means
authorized by the law of the State in which the Property is located.
13. All notices, demands, requests or other communication to be sent by
one party to any other hereunder or required by law shall be in writing and
shall be deemed to have been validly given or served by delivery of the same in
person to the intended addressee, or by depositing the same with Federal Express
or another reputable private courier service for next business day delivery to
the intended addressee at its address set forth on the first page of this
Assignment or at such other address as may be designated by such party as herein
provided, or by depositing the same in the United States mail, postage prepaid,
registered or certified mail, return receipt requested, addressed to the
intended addressee at its address set forth on the first page of this Assignment
or at such other address as may be designated by such party as herein provided.
All notices to Lender shall be addressed to the attention of Capital Markets
Group. All notices, demands and requests shall be effective upon such personal
delivery, or one (1) business day after being deposited with the private courier
service, or two (2) business days after being deposited in the United States
mail as required above. Rejection or other refusal to accept or the inability to
deliver because of changed address of which notice was given as herein required
shall be deemed to be receipt of the notice, demand or request sent. By giving
to any
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other party hereto at least fifteen (15) days' prior written notice thereof in
accordance with the provisions hereof, the parties hereto shall have the right
from time to time to change their respective addresses and each shall have the
right to specify as its address any other address within the United States of
America.
14. In case of a conflict between any provision of this Assignment and
any provision of the other Loan Documents, the provision set forth in this
Assignment shall prevail and be controlling.
15. This Assignment may be executed in any number of counterparts, each
of which shall be effective upon delivery and thereafter shall be deemed an
original, and all of which shall be taken to be one and the same instrument, for
the same effect as if all parties hereto had signed the same signature page. Any
signature page of this Assignment may be detached from any counterpart of this
Assignment without impairing the legal effect of any signatures thereon and may
be attached to another counterpart of this Assignment identical in form hereto
but having attached to it one or more additional signature pages.
16. Notwithstanding anything to the contrary contained in this
Assignment, the liability of Borrower and its officers, directors, general
partners, managers, members and principals for the indebtedness issued hereby
and for the performance of the other agreements, covenants and obligations
contained herein and in the Loan Documents shall be limited as set forth in
Section 2.6 of the Note.
17. If any provision under this Assignment or the application thereof
to any entity, person or circumstance shall be invalid, illegal or unenforceable
to any extent, the remainder of this Assignment and the application of the
provisions hereof to other entities, persons or circumstances shall not be
effected thereby and shall be enforced to the fullest extent permitted by law.
18. This Assignment may not be amended, modified or otherwise changed
except by a written instrument duly executed by Borrower and Lender.
[THE BALANCE OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, Borrower has executed this Assignment as of the day
and year first above written.
BORROWER:
CRIT-VA, INC.,
a Virginia corporation
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President
STATE/COMMONWEALTH OF Virginia
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CITY/COUNTY OF Richmond
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The foregoing instrument was acknowledged before me this 11th day of December,
2000 by Xxxxxxx X. Xxxxxxx, Xx., the Vice President of CRIT-VA, INC., a Virginia
corporation, on behalf of said corporation.
[SEAL]
/s/ Xxxxxx Z-Xxxxx
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Notary Public
My Commission expires: September 30, 2003.
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EXHIBIT A
[OMITTED]
