Collateral Loan Assignment - Substantial Final Form
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WHEN RECORDED, RETURN TO: City of Glendale Community Revitalization Division 5850 West Glendale Avenue Glendale, Arizona 85301 COLLATERAL ASSIGNMENT OF DEED OF TRUST THIS COLLATERAL ASSIGNMENT OF DEED OF TRUST (“Assignment”) is made as of [_____], 2023 by Mercy Housing Mountain Plains., a nonprofit corporation organized and existing under the laws of the State of Colorado (“Assignor”), to the City of Glendale, an Arizona municipal corporation (“City”) (“Assignee”). R E C I T A L S: A. Assignee has made a loan in the principal amount of ($500,000.00) (the “Loan”) to Assignor in order to provide Assignor with funds (the “HOME Funds”) that will be loaned by Assignor to MHMP 19 Glendale Senior Apartments LLLP, an Arizona limited liability limited partnership (the “Partnership”) in order to partially finance the Partnership’s construction of a 148-unit multifamily senior housing project located in Glendale, Arizona (the “Project”). B. The Partnership has evidenced its intent to repay the HOME Funds loaned by the Assignor to the Partnership (the “Underlying Loan”) by executing that certain Promissory Note in the principal amount of ($500,00.00) in favor of the Assignor and dated as of [____], 2023 (the “Underlying Note”). C. The Underlying Note is secured by a Deed of Trust and Assignment of Rents by the Partnership in favor of the Assignor dated as of [____] and recorded concurrently herewith (the “Underlying 2 Deed of Trust”). The Underlying Deed of Trust encumbers the Partnership’s fee simple interest of the property legally described on Exhibit “A” attached hereto. D. The Loan is evidenced by that certain Promissory Note by the Assignor in favor of the Assignee dated [____], 2023 in the principal amount of ($500,000.00) from Assignor to Assignee (the “Note”). The Note is issued pursuant to that certain Developer Agreement of even date herewith between Assignor and Assignee (the “Developer Agreement”). E. A condition precedent to Assignee’s extension of the Loan to Assignor is the execution and delivery by Assignor of this Assignment. NOW, THEREFORE, in consideration of the foregoing, acknowledged to be true and correct by Assignor, and of the covenants, conditions and agreements herein after contained and as a material inducement for Assignee to make the Loan, Assignor agrees as follows: 1. Assignor hereby further covenants that it will, upon request of the Assignee, execute and deliver such further instruments and do and perform such other acts and things as the Assignee may reasonably deem necessary or appropriate to more effectively vest in and secure to the Assignee the rights which are intended to be assigned to the Assignee hereunder. 2. Assignor covenants and agrees not to do or permit to be done anything to impair the Underlying Deed of Trust, not to further assign or encumber its rights under the Underlying Deed of Trust or its rights to the sums due or to become due thereunder and not suffer or permit the Underlying Deed of Trust to be subordinated to any other liens or encumbrances whatsoever (except for those encumbrances listed on Exhibit B attached hereto), and any such subordination to be null and void unless done with the written consent of Assignee. Assignor further covenants and agrees that it will submit the executed original of the Underlying Deed of Trust to Assignee. Upon written request by Assignee, Assignor shall exercise all of Assignor’s rights and remedies under the Underlying Note upon the occurrence of an event of default thereunder and any proceeds realized from a sale or other disposition of collateral secured by the Underlying Deed of Trust received by Assignor shall be held in trust for the benefit of Assignee and shall promptly be paid to Assignee. 3. The acceptance by Assignee of this Assignment, with all of the rights, powers, privileges and authority so created, shall not obligate Assignee to perform or discharge any obligation, duty or liability of Assignor under the Underlying Deed of Trust under or by reason of this Assignment. Assignee shall have no liability to Assignor or anyone for any action taken or omitted to be taken by it hereunder. Should Assignee incur any liability, loss or damage under or by reason of this Assignment or for any action taken by the Assignee hereunder, or in defense against any claim or demand whatsoever which may be asserted against the Assignee arising out of the Underlying Deed of Trust, the amount thereof, including reasonable costs, expenses and reasonable attorneys' fees (to the extent not prohibited by relevant Arizona law), together with interest thereon at the interest rate specified in the Underlying Note shall be secured by this Assignment, and Assignor shall reimburse Assignee therefor immediately upon demand; provided, however, that Assignor shall not be obligated to reimburse Assignee for any claim or demand arising out of the gross negligence or malfeasance of Assignee. 4. This Assignment is solely for the benefit and protection of Assignee and its successors and assigns. Assignee shall have no obligation to exercise any of the foregoing rights, powers, privileges or remedies in any event. 5. Upon the occurrence of a default hereunder or under the Underlying Promissory Note that has not been cured in accordance with applicable time periods, Assignee shall be entitled 3 to exercise all the rights and remedies of Assignor under the Underlying Deed of Trust. Notwithstanding the foregoing, prior to the exercise of any remedies hereunder, Assignor agrees to provide notice to the limited partner of the Partnership of such default and a 30-day period in which to cure such default following the receipt of such notice. Furthermore, all amounts received by Assignor from the Partnership in repayment of the Underlying Note shall he held in trust by Assignor for the benefit of Assignee and shall be paid over to Assignee in the same form as so received (with any necessary endorsement) to be applied (in the case of cash) to, or held as collateral (in the case of non-cash property or securities) for, the payment or performance of the obligations under the Underlying Promissory Note and Underlying Deed of Trust. 6. The delivery of this Assignment to the Assignee shall not affect the release of any collateral now or hereafter held by Assignee as security for the Obligations, nor shall the taking of additional security for the Obligations hereafter affect a release or termination of this Assignment, or of any terms or provisions hereof. 7. Assignor hereby appoints Assignee its true and lawful attorney-in-fact to execute, on behalf of and in the name of Assignor, all documents and instruments necessary or desirable, in Assignee's judgment, to further perfect the Assignee's rights in the interests assigned herein. 8. This Assignment and the rights and obligations of the parties hereunder shall be construed and interpreted in accordance with the laws of the State of North Arizona. 9. The term "Assignor" as used in this Assignment shall refer to all such persons jointly and severally, and all promises, agreements, covenants, waivers, consents, representations, warranties and other provisions in this Assignment are made by and shall be binding upon each and every such undersigned person, jointly and severally. 10. Time is of the essence hereof. This Assignment shall be binding upon Assignor and its successors and assigns, and shall inure to the benefit of the Assignee and its successors and assigns, but is not intended to confer upon any person other than the parties hereto and their respective successors and assigns any rights, privileges, powers or remedies as third-party beneficiary or otherwise. 26194801v3 Remainder of this page intentionally left blank. Signature page follows. Signature Page to Collateral Assignment of Deed of Trust – HOME IN WITNESS WHEREOF, the undersigned have caused this Assignment to be executed as of the date written above. ASSIGNEE: CITY OF GLENDALE, an Arizona municipal corporation ___________________________________ Kevin R. Phelps City Manager ATTEST: ______________________________ Julie K. Bower City Clerk (SEAL) APPROVED AS TO FORM: ______________________________ Michael D. Bailey City Attorney Signature Page to Collateral Assignment of Deed of Trust – HOME ASSIGNOR: Mercy Housing Mountain Plains a Colorado nonprofit corporation By: _______________________________ Name: Shelly Marquez Its: President STATE OF ___________ ) ) ss. County of ____________ ) This Collateral Assignment of Deed of Trust is subscribed and sworn to before me this _____ day of _________________, 2023, by Shelly Marquez, the President of Mercy Housing Mountain Plains , a Colorado nonprofit corporation, as Assignor, who signed the above document. ____________________________________ Notary Public My Commission Expires: A-1 EXHIBIT A (Legal Description) Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF MARICOPA, STATE OF ARIZONA, AND IS DESCRIBED AS FOLLOWS: [INSERT LEGAL DESCRIPTION] APN: [XXX-XX-XXXX] B-1 EXHIBIT B (Permitted Encumbrances) Those matters set forth on and B-II of the loan policy of title insurance (File No. [_____]) issued by [title company to be inserted].