HomeMy WebLinkAboutItem No.6CITY OF LAKE ELSINORE
REPORT TO CITY COUNCIL
TO: MAYOR AND CITY COUNCIL
FROM: RON MOLENDYK, CITY MANAGER
DATE: FEBRUARY 23, 1993
SUBJECT: Assignment of Project Agreements
Tuscany Hills Development Company/
Bank of America
BACKGROUND
The attached Assignment of Project Agreements and Project Plans and
Specifications, prepared on behalf of Bank of America National
Trust and Savings Association, relates to the assignment of certain
rights and obligations of the agreement between Tuscany Hills
Development Company and the City of Lake Elsinore to Bank of
America. City Attorney Harper has reviewed this document and will
be available to provide clarification where necessary.
RECOMMENDATION
It is recommended that the Council approve the Assignment of
Project Agreement and authorize execution of the documentation by
the Mayor.
PREPARED BY:
APPROVED FOR
AGENDA LIS
ACIVZA iTCI,'i --
PAOr; --L OF
ASSIGNMENT OF PROJECT AGREEMENTS
AND
PROJECT PLANS AND SPECIFICATIONS
THIS ASSIGNMENT OF PROJECT AGREEMENTS AND PROJECT PLANS
AND SPECIFICATIONS (the "Assignment ") is made as of ,
1993 by TUSCANY HILLS DEVELOPMENT COMPANY, a California joint
venture ( "Assignor "), to and for the benefit of BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
association ( "Assignee "), with respect to the following Recitals:
A. Pursuant to a Construction Loan Agreement
(California- Subdivision) dated as of August 28, 1989 between
Assignor, as borrower, and Assignee, as lender, as the same may
have been amended from time to time (the "Loan Agreement "),
Assignee agreed to make a loan to Assignor in the original
principal amount of Eleven Million One Hundred Seventy -Eight
Thousand Dollars ($11,178,000) (the "Loan "). As of the date
hereof, Assignee has advanced to Assignor Loan proceeds in the
amount of Dollars ($ ). The
proceeds of the Loan were used to pay, among ot�ngs, a
portion of the costs of acquiring certain real property located
in the County of Riverside, State of California and more
particularly described on Exhibit A attached hereto (the "Land ")
and certain other costs relating to the construction of the
Improvements (as defined in the Loan Agreement) thereon.
B. The Loan is evidenced by a Promissory Note Secured
by Deed of Trust dated August 28, 1989, as the same may have been
amended from time to time (the "Note "). The Note and Assignor's
obligations under the Loan Agreement are secured by, among other
things, that certain Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing dated as of August 28,
1989, executed by Assignor, as trustor, to Continental Auxiliary
Company, a California corporation, as trustee, for the benefit of
Assignee, as beneficiary, and recorded on September 29, 1989 in
the official Records of Riverside County, California (the
"Official Records") as Instrument No. 337403, as the same may
have been amended from time to time (the "Deed of Trust ") . The
Note, the Loan Agreement, the Deed of Trust and the other
documents, instruments and agreements that evidence and secure
the Loan are hereinafter collectively referred to as the "Loan
Documents ".
C. Certain of Assignor's obligations under the Loan
Documents have been guaranteed by Robert F. Buie pursuant to that
certain Completion Agreement and Guaranty dated as of August 28,
LA1-259673.V1
01/22/93
A:
Y
PAGE-1— C "--1 -�
1989, in favor of Assignee, as holder, as the same may have been
amended from time to time (the "Buie Guaranty "). ts owed
D. The Loan has fully matured and all
theoun hereof,
thereunder are currently due and p y Assignor is in default
g
such amounts remain unpaid. Accordingly, the Deed of Trust and certain
under the Loan Agreement, the Note, required with respect thereto g
other Loan Documents, all notices rerace periods in connection
have been given by Assignee and all g
therewith have expired. Further, Assignee has (i) declared the
Note and Documents adue and payable, indebtedness
payable, and(ii)d d secured
recordedanotice of defaultn
in the Official Records on February 29, 1992 as Instrument No.
057700 (the "Notice of Default ").
E. Assignor has Assignee
unable or unwilling to repay
unsuccessful in obtaining any offer satisfactory to Assignor to
sell the Project, any commitment to refinance the Project or any
combination of the foregoing which would result in the repayment
of all amounts owing under the Loan Documents.
T. Borrower has notified Bank that one of its
original joint venture participants, Buie- Tuscany Hills, L.P.
( "Buie- Tuscany "), has dissolved and that The Buie Corporation
(the "Buie Corp."), as the former general partner of Buie -
Tuscany, has succeeded to all of Buie-Tuscany's interest in and
assumed all of Buie - Tuscany's obligations with respect to the
joint venture.
G. Assignor has agreed not to contest the right of
Assignee to foreclosure the Deed of Trust, and desires to
evidence such agreement by executing that certain Settlement
Agreement of even date herewith and by executing and delivering
the Releases (as provided in the Settlement Agreement) to
Assignee. In consideration thereof, Assignee is willing to agree
that following such a foreclosure sale it will not sue Assignor
or Buie for any liability arising under the Loan Documents, all
on the terms and subject to the conditions set forth more
particularly in the Settlement Agreement.
H. Pursuant to the terms of the Settlement Agreement,
Assignee has required that Assignor execute and deliver this
Assignment to Assignee as further evidence of the assignment
described in Sec on 4 thereof and in order to assist Assignee
on 3
i .5 thereof.
with the marketing activities described in sect
NON, THEREFORE, with reference to the foregoing
Recitals, which are incorporated herein by this reference, and in
order to induce Assignee to enter into the Settlement Agreement,
and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Assignor hereby
covenants and agrees as follows:
LA1-259673.V1
01/22/93
s
r'
s:
r
AGENDA ITEM NO.
-e � - C'"!
PAGE-2L
1. Defined Terms. Unless otherwise defined herein,
all initially - capitalized terms herein shall have the same
meanings ascribed to such terms in the Loan Agreement. In
addition, the term "Effective Date" shall mean the date on which
the Trustee's Deed (as defined in the Settlement Agreement) in
favor of Assignee or an affiliate of Assignee is recorded in the
Official Records of Riverside County, California.
2. Assignment. As of the Effective Date, Assignor
hereby assigns, conveys and transfers to Assignee all of
Assignor's rights, titles, interests, privileges, benefits and
remedies in, to and under the following:
(a) all agreements, together with all warranties,
express or implied, contained therein, relating to the
development, construction, maintenance, use and occupancy of
the Project, including, without limitation, each of the .
agreements described in Exhibit B attached hereto, which
exhibit is incorporated herein by this reference;
(b) all other agreements heretofore or hereafter
entered into, together with all warranties, express or
implied, contained therein, with any design architect,
landscape architect, civil engineer, electrical engineer,
soils engineer, geotechnical engineer, mechanical engineer,
or other contractor, architect or engineer in connection
with the design or construction of the Improvements;
(c) all other agreements heretofore or hereafter
entered into with any property manager or broker with
respect to the management, or operation of the Improvements;
(d) all plans and specifications for the Project (the
"Project Plans "); and
(e) any and all present and future amendments,
modifications, supplements, general conditions, change
orders and addenda to any of the items described in
clauses (a), (b), (c) and (d) above.
3. Consent to Assignment. Assignor agrees to obtain
and deliver to Assignee, concurrently with its delivery of this
Assignment, consents (substantially in the form of Exhibit C
attached hereto) from each of the parties (other than Assignor)
to the agreements described in Subsection Val above. Assignor
agrees that upon Assignee's request it shall promptly execute,
and obtain appropriate consents to (substantially in the form of
Exhibit C attached hereto), specific assignments substantially in
the form of this Assignment with respect to the agreements
described in Subsections 1(b) and 1(c) above. Each of the
agreements described in Section 1 above is referred to as an
LA1- 259673.V1
01/22/93
c
iu.
T�
AGENDA ITEM NO.
PAGE 3 OF ILk
"Agreement ", and all of such agreements are collectively referred
to herein as the "Agreements ". it is
{. Nonres ops bil tverson executingsay Consent tto this
agreed by Assignor and by each p
Assignment (hereinafter referred to as a "Consenting Party ") that
Assignee does not hereby assume any of Assignor's obligations or
duties concerning any Agreement, including,
any obligation to pay for the work done pursuant thereto.
Notwithstanding the foregoing, Assignee may, at its option, upon
written notice to the appropriate Consenting Party, exercise any
or all of the rights and remedies granted to Assignor under the
Agreement with the Consenting Party as if Assignee had been an
original party to such Agreement. Upon g i g
notice to the Consenting Party, Assignee may elect to assume all
obligations of Assignor under the Agreement between Assignor and
the Consenting Party; provided, however, that Assignee shall not
be responsible for any default of Assignor under the Agreement
occurring prior to the time Assignee gives such notice to the
Consenting Party.
S. Covenauzu Wo
Assignor. Assignor hereby represents and warrants to .Assignee
that no previous assignment of any interest in the Agreements or
any of them has been made, and Assignor agrees not to assign,
sell, pledge, transfer or otherwise encumber its interest in the
Agreements or any of them prior to the Effective Date.
6. Preservation of Rights. Prior to the Effective
Date, Assignor shall at all times diligently enforce its rights
in, under and to the Agreements, unless otherwise directed by
Assignee in writing, and shall, at Assignor's sole cost and
expense, appear in and defend Assignee in any action or
proceeding in any way connected with any of the Agreements, and
shall pay all reasonable costs and expenses, including, without
limitation, attorneys' fees and costs, which Assignee may incur
in connection with Assignee's appearance, voluntarily or
otherwise, in any such action or proceeding.
7. Indemnification. Assignor hereby agrees to pay
and protect, and indemnify and hold Assignee harmless from and
against, any and all claims, demands, liabilities, losses,
lawsuits, judgments, and costs and expenses (including, without
limitation, reasonable attorneys' fees) arising from or relating
to any act, omission, event or default which occurred prior to
the Effective Date; unless the foregoing is caused solely by the
gross negligence or willful malfeasance of Assignee, its
directors, officers, agents or employees in the exercise of the
rights assigned hereby.
S. R�,ghts and Remedies. The rights and remedies of
Assignee under this Assignment are cumulative and are not in lieu
of, but are in addition to, any other rights or remedies which
3,A1-259677.V1
4 01/22/93
X'
T.
S
AC=V, A ITEM NO. —
PAGE OF�
ti
Assignee may have under the Loan Agreement, the other Loan
Documents, at law, or otherwise.
9. BeVerabjLW. If any provision of this Assignment
shall be invalid, illegal or unenforceable, it shall not affect
or impair the validity, legality and enforceability of any other
provisions of this Assignment or of the other Loan Documents.
10. Modifications. Waivers. Etc, This Assignment may
not be amended, modified or changed, nor shall any waiver of any
provision hereof be effective, except by an instrument in writing
and signed by the party against whom enforcement of the waiver,
amendment, change, modification or discharge is sought.
11. Successors and Assicns. This Assignment shall be
binding upon Assignor and its successors and assigns, and shall
inure to the benefit of Assignee and its successors and assigns.
Assignee may assign all or any portion of its interest in the
Agreements or its rights created hereunder to an affiliate of
Assignee or to any other party and, in such event, Assignor, at
its sole expense, shall promptly execute, acknowledge and deliver
such additional documents, instruments and agreements as may be
required by Assignee in connection with any such assignment.
12. Termination. In the event that Assignee or an
agent or affiliate of Assignee is not the Purchaser at the
Nonjudicial Foreclosure Sale (as defined in the Settlement
Agreement), this Assignment shall automatically terminate.
Assignee hereby agrees, upon termination of this Assignment, to
execute a release and reconveyance of this Assignment and all
such further documents, if any, necessary or required in order to
evidence the termination of this Assignment.
13. GOVERNING LAW. THIS ASSIGNMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
14. Notices. All notices, demands or documents that
are required or permitted to be given or served hereunder shall
be given or served as provided in the Loan Agreement, with
notices to Assignor as provided therein for Borrower and with
notices to Assignee as provided therein for Bank.
LA1-259673.V1
5
01/22/93 '
AGENDA ITEt: ISO.. --iii —
PAGE 6 OF
IN WITNESS WHEREOF, Assignor has caused this Assignment
to be executed as of the date first hereinabove set forth.
Assignor: TUSCANY HILLS DEVELOPMENT COMPANY,
a California joint venture
LA1- 259673.V1
By: The Buie Corporation,
a California corporation
By:
Robert F. Buie,
President
By:
Printed Name:
Its:
By: Nevada Elsinore Corporation,
a California corporation
By:
Printed Name:
Its:
01/22/93
F.'
AGENDA ITEM NO.
LA
PAGE OF
EXHIBIT A
LEGAL DESCRIPTION OF LAND
ALL THAT CERTAIN REAL PROPERTY LOCATED IN THE COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA WHICH IS MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 207 AND COMMON LOTS I AND J OF TRACT NO.
17413 -1 AS SHOWN BY MAP ON FILE IN BOOK 207 PAGES 9 THROUGH
21 OF MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;
EXCEPT ALL THE COAL AND OTHER MINERALS IN THE LANDS RESERVED
BY THE UNITED STATES OF AMERICA IN THE PATENT TO SAID LAND
RECORDED MARCH 13, 1940 IN BOOK 447 PAGE 488 OF OFFICIAL
RECORDS OF RIVERSIDE COUNTY;
ALSO EXCEPT 1 /16TH OF ALL COAL, OIL, GAS AND OTHER MINERAL
DEPOSITS IN SAID LAND AS RESERVED IN PATENT FROM THE STATE
OF CALIFORNIA, RECORDED OCTOBER 19, 1926 IN BOOK 9 PAGE 177
OF PATENTS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
LA1-259673.V1 A -1 01/22/93
T
if
ADEN A !'.'EV N
PAGE % Orj_q_
EXHIBIT B
DESCRIPTION OF AGREEMENTS
I. Development Agreement dated January 31, 1990, by and
between the City of Lake Elsinore and Homestead Land
Development Corporation for Tuscany Hills Development.
2. Purchase Agreement and Escrow Instructions dated June
5, 1989, by and between Homestead Land Development
Corporation and The Buie Corporation.
3. Agreement for Construction of Improvements dated August
7, 1989, by and between Tuscany Hills Development
Company and the City of Lake'Elsinore.
4. Agreement for Acquisition (Canyon Lake Hills Project)
dated January 26, 1988, by g of Lake
Elsinore, Canyon Lake Hills and Homestead Land
Development Corporation.
5. Service Letter dated August 8, 1990, from Elsinore
Valley Municipal Water District to The Buie
Corporation.
6. Letter Agreement dated September 6, 1989, by and
between Hunnsaker & Associates Irvine, Inc. and The
Buie Corporation.
LA1-259673.V1
B -1
a
AGENDA ITct,4 NO. —L—�-
pAOE_..1(�_ OFJ—q --
01/22/93
LA1-259671.V1
EXHIBIT C
FORM OF CONSENT TO ASSIGNMENT OF PROJECT AGREEMENTS
AND PROJECT PLANS AND SPECIFICATIONS
C -1
r.
AGENDA ITEM NO.��
FAG' 10 OF ILI
01/22/9]
CONSENT 0 AND PR ASSIGNMENT SPECIFICATIONS GREEMENTS
OD CT PLANS AND
The undersigned, on behalf of HUNNSAKER &
ASSOCIATES IRVINE, INC., hereby consents to the foregoing
Assignment of Project Agreements and Project Plans (therms
"Assignment"), and agrees to p pursuant
and conditions of its Agreement with Assignor described in
Exhibit_B attached to said Assignment, notwithstanding the
occurrence of any default on the part of Assignor under the
Loan Agreement or the foreclosure of the Property by
Assignee. The undersigned also agrees that, in the event of
a breach by Assignor of any of the terms and conditions of
said Agreement, the undersigned will give prompt written
notice to Assignee of such breach. Assignee shall have
sixty (60) days from the receipt of such notice of default
to remedy or cure said default; provided, however, that
nothing herein shall require Assignee to cure said default,
but Assignee shall, in its sole discretion, have the option
to do so. All capitalized terms used in this consent shall_
have the same meaning as in the Assignment. The Agreement
with Assignor and the undersigned is in full force and
effect and no default on the part of Assignor is known to
exist by the undersigned as of the date hereof.
LAI-259673.V1
DATED as of _, 1993
HUNNSAKER & ASSOCIATES
IRVINE, INC.,
a corporation
By:
Printed Name:
Its:
By:
Printed Name:
Its:
C -2
01/22/93
s:
z
AGENDA ITEtv', NO. �
PALS! L ar
CONSENT OF ELSINORE VALLEY MUNICIPAL WATER DISTRICT TO
ASSIGNMENT OF PROJECT AGREEMENTS
AND PROJECT PLANS AND SPECIFICATIONS
The undersigned, on behalf of ELSINORE VALLEY
MUNICIPAL WATER DISTRICT, hereby consents to the foregoing
Assignment of Project Agreements and Project Plans (the
"Assignment "), and agrees to perform pursuant to the terms
and conditions of its Agreement with Assignor described in
Exhibit B attached to said Assignment, notwithstanding the
occurrence of any default on the part of Assignor under the
Loan Agreement or the foreclosure of the Property by
Assignee. The undersigned also agrees that, in the event of
a breach by Assignor of any of the terms and conditions of
said Agreement, the undersigned will give prompt written
notice to Assignee of such breach. Assignee shall have
sixty (60) days from the receipt of such notice of default
to remedy or cure said default; provided, however, that
nothing herein shall require Assignee to cure said default,
but Assignee shall, in its sole discretion, have the option
to do so. All capitalized terms used in this consent shall
have the same meaning as in the Assignment. The Agreement
with Assignor and the undersigned is in full force and
effect and no default on the part of Assignor is known to
exist by the undersigned as of the date hereof.
DATED as of
LAI- 259673.V1
C -3
_, 1993
ELSINORE VALLEY MUNICIPAL
WATER DISTRICT
By:
Its:
01/22/93
it
=8:
AGENDA ITEM NO.(0
PAGE I Z OF I u
CONSENT OF THE CITY OF LARS ELSINORE TO ASSIGNMENT OF
PROJECT AGREEMENTS
AND PROJECT PLANS AND SPECIFICATIONS
The undersigned, on behalf of the CITY OF LAKE
ELSINORE, hereby consents to the foregoing Assignment of
Project Agreements and Project Plans (the "Assignment "), and
agrees to perform pursuant to the terms n ZXh1bittB attached
its Agreements with Assignor described in
to said Assignment, notwithstanding the occurrence of any
or
default on the part of Assignor under the Loan Agreement
the foreclosure of the Property by Assignee. The
undersigned also agrees that, in the event of a breach by
Assignor of any of the terms and conditions of said
Agreements, or any of them, the undersigned will give prompt
written notice to Assignee of such breach. Assignee shall
have sixty (60) days from the receipt of such notice of
default to remedy or cure said default; provided, however,
that nothing herein shall require Assignee to cure said
default, but Assignee shall, in its sole discretion, have
the option to do so. All capitalized terms used in this
consent shall have the same meaning as in the Assignment.
Each of the Agreements with Assignor and the undersigned is
in full force and effect and no default on the part of
Assignor is known to exist by the undersigned as of the date
hereof.
DATED as of _, 1993
CITY OF LARS ELSINORE,
a municipal corporation and
political subdivision of the
State of California
By:
Title or Office:
ATTEST:
City Clerk
C -4 01 /22 /93
v1- 259673. V1
AGENDA ITEM NO. � -
PAGE -U OF!_!._
CONSENT OF HOMESTEAD LAND DEVELOPMENT CORPORATION TO
ASSIGNMENT OF PROJECT AGREEMENTS
AND PROJECT PLANS AND SPECIFICATIONS
The undersigned, on behalf of HOMESTEAD LAND
DEVELOPMENT CORPORATION, hereby consents to the foregoing
Assignment of Project Agreements and Project Plans (the
"Assignment "), and agrees to perform pursuant to the terms
and conditions of its Agreements with Assignor described in
Exhibit B attached to said Assignment, notwithstanding the
occurrence of any default on the part of Assignor under the
Loan Agreement or the foreclosure of the Property by
Assignee. The undersigned also agrees that, in the event of
a breach by Assignor of any of the terms and conditions of
said Agreements, or any of them, the undersigned will give
prompt written notice to Assignee of such breach. Assignee
shall have sixty (60) days from the receipt of such notice
of default to remedy or cure said default; provided,
however, that nothing herein shall require Assignee to cure
said default, but Assignee shall, in its sole discretion,
have the option to do so. All capitalized terms used in
this consent shall have the same meaning as in the
Assignment. Each of the Agreements with Assignor and the
undersigned is in full force and effect and no default on
the part of Assignor is known to exist by the undersigned as
of the date hereof.
DATED as of _, 1993
HOMESTEAD LAND DEVELOPMENT CORPORATION,
a California corporation
By:
Printed Name:
Its:
By:
Printed Name:
Its:
{./11- 259673. V 1 C-5 01/22/93
:x
AUEtZk, 1TEa� NO-10. ... .
N �PAOSE nc � 1_