HomeMy WebLinkAboutAssignment and Agreement, dated as of April 20, 2006, between Ashby USA, LLC and Ohio Savings Bank
ASSIGNMENT AND AGREEMENT (Roripaugh Ranch) THIS ASSIGNMENT AND AGREEMENT ("Agreement") is made and entered into as of April 20, 2006, by and between OHIO SAVINGS BANK, a federal savings
bank (the "Lender"), whose address is 1801 East Ninth Street, Suite 200, Mail Code OH99-0204, Cleveland, Ohio 44114, Attn: Frank J. Bolognia, and ASHBY USA, LLC, a California limited
liability company ("Borrower"), whose address is c/o Fiesta Development, 470 East Harrison Street, Corona, California 92879. RECITALS A. Lender is the owner and holder of a land development
loan (the "Land Loan") to Borrower evidenced by a Revolving Deed of Trust Note dated August 29, 2005 ("Land Note"), in the original principal sum of One Hundred Six Million Five Hundred
Thousand and No/One-Hundredths Dollars ($106,500,000.00), and a letter of credit loan (the "Letter of Credit Loan;" the Land Loan and the Letter of Credit Loan are hereinafter referred
to collectively as the "Loan") evidenced by a Replacement Deed of Trust Note (Letter of Credit) of even date herewith in the original principal amount of up to Eight Million Five Thousand
and No/Onehundredths Dollars ($8,005,000.00) ("Letter of Credit Note;" the Land Note and the Letter of Credit Note are hereinafter referred to collectively as the "Note") which Loan
shall be disbursed in accordance with a Loan Agreement dated August 29, 2005 as amended by a Modification Agreement dated February 14, 2006 ("Loan Agreement") and secured by among other
instruments (i) a Construction Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing of even date herewith (the "Deed of Trust") recorded in the Official Records
of Riverside County, California, as amended by Modification of Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated of even date therewith, which Deed of Trust
constitutes a first lien and encumbrance on certain real property owned by Borrower more particularly described therein ("Property"); (ii) various assignments of contract rights dated
August August 29, 2005 ("Assignments"); and (iii) an Unconditional and Continuing Guaranty and Indemnity Agreement dated August 29, 2005 executed by Richard Ashby and by Justin Ashby,
for the benefit of Lender (as reaffirmed pursuant to the Modification Agreement, the "Guaranty") (the Note, Deed of Trust, Assignments, Guaranty and all other documents securing the
Loan, as amended by the Modification Agreement, being hereinafter referred to collectively as the "Loan Documents"). B. Pursuant to the Acquisition Agreement dated as of March 1, 2006
(the "Acquisition Agreement") entered into or to be entered into by and between Borrower and the Temecula Public Financing Authority (the "Authority"), a joint exercise of powers authority
organized and existing under the laws of the State of California (the "Acquisition Agreement") and related agreements to which the Borrower is a party (collectively, the "CFD Agreements"),
Borrower, subject to satisfaction of certain conditions, is entitled to receive payment for Discrete Components by means of a Payment Request made as described therein, and to payments
for the Budgeted Cost of certain Facilities from funds held in the Improvement Fund, including amounts with respect to the Parity Bonds, as such italicized terms are defined in the Acquisition
Agreement (which payments are, collectively, "Acquisition Agreement Reimbursements").Temecula 462174.10 17810-977
C. In addition, on October 21, 2004, the City of Temecula (the "City") and the Borrower entered into that certain "First Operating Memorandum to the Recorded Development Agreement between
the City of Temecula and Ashby USA, LLC (Roripaugh Ranch Project)" pursuant to Section 3.55 of the Development Agreement ("First Operating Memorandum," and together with the CFD Agreements,
the "Borrower Agreements"). The First Operating Memorandum was recorded as Document No. 2004-0874441 in the Official Records of the County of Riverside on November 3, 2004. Pursuant
to the First Operating Memorandum, the Borrower shall be reimbursed the Fire Station Advances (as defined below) from the first proceeds of the Bond Issue (and any supplemental bond
issue, if the proceeds of the Bond Issue are insufficient) after the funding of only the following: (i) the Reserve Fund; (ii) the costs of issuance; and (iii) capitalized interest,
if any. No other improvement or fee shall be financed by the Bond Issue until the Fire Station Advances are reimbursed to the Borrower from the proceeds of the Bond Issue. The term "Fire
Station Advances" shall mean all amounts paid by the Borrower for the fire station in an amount equal to (i) the $2 million advanced pursuant to the Development Agreement and (ii) the
$1.1 million advanced pursuant to the First Operating Memorandum. The reimbursement of the Fire Station Advances shall be referred to herein as the "First Operating Memorandum Reimbursements,"
and together with the Acquisition Agreement Reimbursements, the "Borrower Reimbursements." D. The CFD Agreements provide for development of infrastructure and other uses and purposes
related to the project known as Roripaugh Ranch (the "Project"), as more particularly described in the Acquisition Agreement. Payments due Borrower under the Acquisition Agreement and
the First Operating Memorandum are distributed by a fiscal agent (the "Fiscal Agent") pursuant to the CFD Agreements after receiving direction from the Authority and/or the City. E.
Borrower Borrower has advised Lender that initial Borrower Reimbursements will be payable to Borrower following issuance of the Series 2006-A Bonds and, if applicable, the Parity Bonds,
(collectively, the "Bonds") as defined in the Acquisition Agreement. Pursuant to the Deed of Trust, Borrower has granted Lender a security interest in the Borrower Reimbursements. F.
It is a condition to the closing of the Loan that Borrower, in addition to its grant of such security interest, execute this Agreement and agree to cause the Borrower Reimbursements
otherwise payable to Borrower to be paid to Lender and held or applied to amounts due under the Loan on the terms and conditions set forth in this Agreement and the Loan Agreement. AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree and covenant as follows: 1. Assignment. Borrower hereby assigns and
sets over to Lender its right, title and interest in and to the aggregate Borrower Reimbursements payable to Borrower pursuant to the Acquisition Agreement and the First Operating Memorandum,
including, without limitation, the right to receive all payments and reimbursements. 462174.10 17810-977
2. Irrevocable Instructions. Concurrently with issuance of the Bonds, Borrower shall execute irrevocable instructions in the form attached as Exhibit "A" directing the City and the Authority,
and their successors and assigns, to pay or cause to be paid, to Lender, by wire transfer, each Borrower Reimbursement otherwise payable to Borrower pursuant to the Acquisition Agreement
and the First Operating Memorandum. All amounts received by Lender pursuant to such instructions shall be held or applied as described in the Loan Agreement. 3. Representations and Warranties
of Borrower. Borrower hereby represents and warrants to Lender that: (a) It has no knowledge of, and has not made any prior assignments or transfers of, its interest in the Borrower
Reimbursements or the Borrower Agreements. (b) Borrower is authorized to make this assignment. (c) The Borrower Agreements provided to Lender are true, correct and complete copies of
the same, and the same have not been altered, modified or amended in any manner whatsoever, except as may have been approved by Lender. (d) The Borrower Reimbursements to which Borrower
is or will be entitled on completion of the Facilities and satisfaction of all conditions set forth in the Borrower Agreements is expected to be not less than $40,000,000.00, payable
from the Improvement Fund following the issuance of the 2006 Series A Bonds. 4. Covenants of Borrower. (a) Borrower covenants and agrees that it shall obtain the prior written consent
of Lender, which consent may be granted or withheld in Lender's sole discretion, to any change, amendment or modification of the Borrower Agreements, recognizing that the form and substance
of the Borrower Agreements constitutes a material inducement to the making of the Loan. (b) The interest of Borrower under the Borrower Agreements or in Borrower Reimbursements shall
not be further pledged, assigned or encumbered by Borrower, nor will Borrower consent to any such assignment, pledge or encumbrance. (c) Borrower shall execute such other and further
documents as are reasonably required to carry out the intent of this Agreement. (d) Borrower agrees that the assignment described in this Agreement is an absolute and unconditional assignment,
irrevocable by the assignor, and not merely an assignment for security purposes. (e) Borrower hereby irrevocably constitutes and appoints Lender, and any agent or officer thereof, as
its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Borrower, and in its name or in the name of Lender, from time to time, for the
purpose of carrying out the terms of this Agreement, to any and all appropriate action and to execute any and all documents and instruments which may be necessary or appropriate to accomplish
the purpose of this Agreement, such appointment being coupled with an interest. 462174.10 17810-977
5. Attorneys Fees. If either party is required to file an action to enforce the terms of this Agreement or to recover damages for the violation of the same or for a declaration of rights
hereunder, the prevailing party as determined by the court, in addition to what other remedies and damages it may be entitled, shall be entitled to recover costs and attorneys fees as
a result from the losing party. 6. Effect of Assignment. Notwithstanding Lender's rights hereunder, Lender shall not be obligated to perform, and Lender does not undertake to perform,
any obligation, duty or liability with respect to the Borrower Agreements on account of this Agreement. 7. Notices to City and Agency. A copy of all notices sent by Borrower, Justin
Ashby or Richard Ashby to the Authority under the Borrower Agreements shall also be sent to Lender at the address set forth below. 8. Successors. The term "Lender" shall be deemed to
include OHIO SAVINGS BANK, a federal savings bank, and its successors and assigns, including any affiliate of Lender which shall have acquired any of the Property through a foreclosure
proceeding. 9. Severance. Each covenant, condition and provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any covenant,
condition or provision of this Agreement shall be held to be void or invalid, the same shall not affect the remainder hereof which shall be effective as though the void or invalid covenant,
condition or provision had not been contained herein. 10. Amendment. This Agreement may not be amended or modified orally and may only be amended or modified by an agreement in writing
signed by the parties hereto or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their successors and assigns.
11. Choice of Law. This Agreement shall be governed by and construed according to the laws of the State of California without giving effect to conflict of laws principles. 12. Counterparts.
This Agreement may be executed and recorded in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document. 13. Notice. Any notice
which any party hereto may desire or may be required to give to any other party hereto shall be in writing, and shall be deemed effective at the earlier of the time when actually received,
or at 6:00 P.M. on the second (2nd) business day after deposit of the same in the U.S. mail, first class postage prepaid, addressed to a party at its address set forth below, or at such
other place as such party may have designated to all other parties by notice in writing in accordance herewith: (a) If to Borrower: c/o Fiesta Development 470 East Harrison Street Corona,
California 92879 462174.10 17810-977
(b) If to Lender: Ohio Savings Bank 200 Ohio Savings Plaza 1801 East Ninth Street Mail Code: OH99-0204 Cleveland, Ohio 44114 Attn: Senior Executive Vice President, Commercial Construction
Lending [Signature Page Follows] 462174.10 17810-977
462174.10 17810-977 ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, Its ManagTng\Member " t-""Justin K. Ashby, President-''
........ _... By: USA Investment Partners, LLC, -, a Nevada limited liability company, its Membep-, ,/By: //"/'//i''''l//JosepnT). Milanowski Manager OHIO SAVINGS BANK, a federal savings
bank By: Its:
462174.10 17810-977 ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, Its Managing Member By: Justin K. Ashby, President
By: USA Investment Partners, LLC, a Nevada limited liability company, its Member By: Joseph D. Milanowski Manager OHIO SAVINGS BANK, a federal savings bank
Exhibit A Form of Irrevocable Instructions IRREVOCABLE INSTRUCTIONS To: City of Temecula Temecula City Hill 43200 Business Park Drive Temecula, CA 92589-9033 Attn: Genie Roberts, Director
of Finance Temecula Public Financing Authority Temecula City Hall 43200 Business Park Drive Temecula CA 92589-9033 Attn: Genie Roberts, Director of Finance Pursuant to Section 5.06 (B)
of the Acquisition Agreement, the undersigned, Ashby USA, LLC, a California limited liability company, hereby irrevocably instructs the City of Temecula (the "City") and the Temecula
Public Financing Authority, a joint exercise of powers authority organized and existing under the laws of the State of California (the "Authority") to direct the Fiscal Agent to pay
from the proceeds of the Bonds all funds payable to the undersigned pursuant to a "Payment Request" made by the undersigned under the certain Acquisition Agreement between the Authority
and the undersigned dated as of March 1, 2006 (referred to as the "Assigned Funds") directly to Ohio Savings Bank, a federal savings bank in accordance with the wire transfer instructions
attached. These instructions are irrevocable unless revocation or amendment is consented to by Ohio Savings Bank until such time as Ohio Savings Bank has released the undersigned from
its obligations under the certain Assignment and Agreement (Roripaugh Ranch) dated as of April 20, 2006 (the "Assignment Agreement"). In addition, pursuant to the First Operating Memorandum,
Ashby USA, LLC, a California limited liability company, hereby irrevocably instructs the City and the Authority to direct the Fiscal Agent to pay from the proceeds of the Bonds any reimbursements
for the Fire Station Advances payable to the undersigned pursuant to the First Operating Memorandum directly to Ohio Savings Bank, a federal savings bank in accordance with the wire
transfer instructions attached. These instructions are irrevocable unless revocation or amendment is consented to by Ohio Savings Bank until such time as Ohio Savings Bank has released
the undersigned from its obligations under the certain Assignment Agreement. You are further instructed and authorized to accept all instructions of Ohio Savings Bank with respect to
the Assigned Funds without further authorization or consent of the undersigned, and Temecula 462174.10 17810-977
regardless of any contrary or conflicting instructions you may at any time receive from the undersigned. All capitalized terms used herein shall have the meanings given to such terms
in the Assignment Agreement. Dated: April ,2006 ASHBY USA, LLC, a California limited liability company By: Ashby Development Company, Inc., a California corporation, its Managing Member
By: Justin K. Ashby President By: USA Investment Partners, LLC, a Nevada limited liability company, its Member By: Joseph D. Milanowski Manager 462174.10 17810-977
The undersigned hereby acknowledge receipt of these Irrevocable Instructions. Dated: ,2006 CITY OF TEMECULA By: Dated: ,2006 City Manager TEMECULA PUBLIC FINANCING AUTHORITY By: Executive
Director 462174.10 17810-977
OHIO SAVINGS BANK WIRING INSTRUCTIONS OHIO SAVINGS BANK 1801 EAST NINTH STREET CLEVELAND, OHIO 44114 ABA NUMBER: 241070433 DEPOSIT TO ACCT: 146410 ATTN: Construction Lending 480-945-8333
x!7 REF: Ashby USA, LLC #6035-343938 462174.10 17810-977