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HomeMy WebLinkAboutPR 14852: STONECREEK APARTMENTS LTD. AND OAKMONT PROPERTIES, INC.interoffice MEMORANDUM To: Mayor, City Council, anal City Manager From: Mark T. Sokolow, City Attorney ~'L,ti,~t ~ ~~2'Yi(~"-- Date: July 25, 2008 Subject: P. R. No.14852; Council Meeting July 29, 2008 Attached is P. R. No. 19:851 as it pertains to Stone Creek Apartments Ltd. and Oakmont Properties, Inc. MTS:gt Attachment cc: Campbell & Riggs z.pr14852 memo P. R. No.. 14852 07/25/08 gt RESOLUTION' NO. A RESOLUTION AS IT PERTAINS TO STONE CREEK APARTMENTS LTD. AND OAKMONT PROPERTIES, INC. WHEREAS, the City Council deems it in the best interest of the public to authorize the City Manager to execute an Assignment of Reimbursement Agreement between Stone Creek Apartments Ltd., Oakmont Properties, Inc., the City of Port Arthur, and Amegy Bank National Association, in substantially the same form as attached hereto as Exhibit "A". NOW THEREFORE, BE IT RESOLVEI) BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. true and correct. Section 2. That the facts and opinions in the preamble are That the City Council herein authorizes the City Manager to execute an Assignment of Reimbursement Agreement between Stone Creek Apartments Ltd., Oakmont Properties, Inc., the City of Port Arthur, and Amegy Bank National Association, in substantially the same form as attached hereto as Exhibit "A" Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the Corporation. READ, ADOPTED AND APPROVED on this day of A.D., 2008, at a Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: z.pr14852 Mayor NOES: Mayor ATTEST: ACTING CITY SECRETARY APPROVED AS TO FORM: ~~ ~~~-- CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER z.pr14852 EXHIBIT ~A" ASSIGNMENT OF REIMBURSEMENT AGREEMENT THIS ASSIGNMENT OF REIMBURSEMENT AGREEMENT (this "Agreement") is made as of July 25, 2008, by STONE CREEK APARTMENTS LTD., a Texas limited partnership (the "Borrower"), OAKMONT PROPERTIES, INC., a Texas corporation ("Oakmont" and together with Borrower, "Developer"), THE CITY OF PORT ARTHUR (the "City"), and AMEGY BANK NATIONAL ASSOCIATION, a national banking association (the "Lender"). RECITALS: A. Borrower and Lender entered into that certain Construction Loan Agreement dated as of even date herewith (as the same miay be supplemented, amended or modified from time to time, the "Loan Agreement") whereby Lender agreed to make a loan (the "Loan") to Borrower for the construction of a 246-unit, class A, garden-style apartment community to be known as Stone Creek Aparl:ments (the "Improvements") located on the real property described on Exhibit "A" attached hereto and incorporated herein for all purposes (the "Property"), which construction shall also include the completion by Borrower of the extension of Anchor Drive along the boundary of the Property to a point of intersection with Lake Arthur Drive (the "Public Improvements"). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement. B. Developer and the City have entered into a Developer Participation Contract, pursuant to Sections 212.071 to 212.074 of the Local Government Code, V.T.C.A., dated as of July 8, 2008 (the "City Agreement"), whereby the City has agreed to reimburse Developer for a portion of the cost of the Public Improvements up to $200,000.00. G. As a condition to making the Loan, Lender requires (i) Developer to assign and pledge to Lender, and grant to Lender a~ security interest in, all rights to payment arising out of the City Agreement, and payments to be received by Developer under the City Agreement, and (ii) certain consents by they City. NOW, THEREFORE, in consideration of the foregoing and other valuable consideration, the receipt and sufficiency of v\rhich are hereby acknowledged, the parties agree as follows: ARTI('I F I Security Interest and Consent Section 1.1. Grant of Security Interest. To secure prompt and full payment and performance of the Obligations (hereinafter defined), Developer hereby irrevocably transfers, pledges and assigns to Lender, and €;rants to Lender a security interest in, all of Developer's right, title and interest in and to the City Agreement, including without limitation the right to receive reimbursement payments under the City Agreement, and the right to enforce, collect, and receive such payments, together with all proceeds thereof (collectively, the "Collateral"). Section 1.2. Consent to Security Interest. The City hereby consents to (a) the transfer, pledge and assignment set forth in Sec"lion 1.1 of this Agreement and (b) any future ownership of the Collateral and control of the Property and Improvements (collectively, the "Project") by Lender pursuant to exercise of its remedies in accordance with the Loan Agreement or the Loan Documents (as defined in the Loan Agreement) but otherwise subject to the terms and conditions of the Cit)r Agreement. Lender represents to the City that it has reviewed the terms and conditions of the City Agreement and understands and recognizes the contingencies associated with the City's obligations to make reimbursements to Developer thereunder. Section 1.3. Payments. Prior to payment in full of the Loan (solely evidenced by written notice to the City from Lender), the Cifiy shall remit to Lender all payments payable to Developer under the City Agreement for application to the Loan. Developer hereby consents to all such remittances by the City, and agrees that the City may rely upon this Agreement and any future notice received by the City from Lender, without further inquiry. Lender shall apply any such remittances upon receipt to the Obligations under the Loan Agreement or the Loan Documents, or to amounts due to Lender under any agreements between Borrower and Lender with respect 'to the Loan, and will remit any excess to Developer. Section 1.4. Notice of Default; Right to Cure. If the City notifies Developer of a default under the City Agreement, the City shall send a copy of the notice to Lender. If Lender chooses to itself cure the default, and does so within the cure period specified in the notice or after the expiration of that cure period but before the City terminates the City Agreement, the City shall accept the cure by Lender and shall deem the City Agreement reinstated . Section 1.5. Contract Obligations. If Lender gains control of the Project through exercise of its remedies under the Loan Agreement or the Loan Documents, Lender shall have the option (but not the obligation) to assuime responsibility for the construction of the Project and Developer's obligations under the City Agreement, and, so long as lender complies with the obligations of Developer under the City Agreement, the City Agreement shall not be deemed in default on the part of Developer. Section 1.6. Obligations. The Collateral shall secure the following obligations, indebtedness, and liabilities (all such obligations, indebtedness, and liabilities being hereinafter sometimes called the "Obligations"): (a) the obligations and indebtedness of Borrower to Lender evidenced by the Note (as defined in the Loan Agreement); (b) the obligations and indebtedness of Borrower to Lender under the Loan Agreement and the Loan Documents; -2-- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimburserrient Agreement.v2.doc (c) all obligations of Borrower to Lender with respect to this Agreement; (d) all costs and expenses, including, without limitation, all reasonable attorneys' fees and legal expenses, incuirred by Lender to preserve and maintain the Collateral, collect the obligations herein described, and enforce this Agreement; (e) all other obligations, indebtedness, and liabilities of Borrower to Lender, now existing or hereafter arising, regardless of whether such obligations, indebtedness, and liabilities are similar, dissimilar, related, unrelated, direct, indirect, fixed, contingent, primary, secondary, joint, several, or joint and several; and (f) all extensions, renewals, and modifications of any of the foregoing and all promissory notes given in extension, renewal, modification, substitution or replacement of any of the foregoing. Section 1.7. Limitations of the City. Thie City makes no representations, covenants, agreements or obligations under this Agreement other than those contained in Sections 1.2, 1.3, 1.4 and 1.5. The City specifically makes no representation, covenant or agreement that the Collateral may ever be sufficient to satisfy the Loan Agreement, the Loan or the Note or the sufficiency or legality of the :security interest in the Collateral created hereunder. ARTICLE II Representations and Warranties of Developer To induce Lender to enter into this Agreement and the Loan Agreement, Developer represents and warrants to Lender as set forth below: Section 2.1. Ownership and Title. Developer is the sole owner of the Collateral; there are no security interests, liens or encumbrances, or any other interest whatsoever in any of the Collateral except as created by this Agreement; and no financing statement or other security interest covering the Collateral or any portion thereof or any proceeds thereof exists or is on file in any public office. Section 2.2. True and Complete Disclosure. All written information furnished on or before the date hereof by or on behalf of Ceveloper to Lender in connection with this Agreement and the Collateral are true, complete and accurate in every material respect on the date as of which such information is stated nor certified. Section 2.3. No Breach. Neither (a) thie execution and delivery of this Agreement nor (b) the consummation of the transactions herein contemplated will conflict with or -3-- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursemient Agreement.v2.doc result in a breach of the organizational documents of Developer, or, in any material respect, any applicable law, rule or regulation, or any order, writ, injunction or decree of any governmental authority or other material agreement or instrument to which Developer is a party or by which it is bound, or to which it is subject, or constitute a default under any such material agreement or instrument. Section 2.4. No Liens. Except for the lien and security interest granted herein, Developer owns, and with respect to Collateral acquired after the date hereof Developer will own, the Collateral free and clear of any lien, security interest or other encumbrance. No other person or entity has or will have any right in or to the Collateral. Section 2.5. Financing Statements. The execution and delivery of this Agreement by Developer, and the filing in the office of the Texas Secretary of State of such UCC financing statements relating to the Collateral,, validly and fully perfect Lender's security interest in and to all of the Collateral, and no further filings are necessary to perfect such security interest. No financing statement, security agreement, or other lien or security instrument covering all or any part of the Collateral is on file in any public office. Section 2.6. No Defaults. No default exists under the City Agreement, and Developer is in compliance with all the provisions of the City Agreement. Developer knows of no event or act or omission of Developer or the City which could prevent Developer or the City from meeting its obligations under the City Agreement. ARTICLE III Covenants of Developer Developer covenants and agrees with Lender that until the Obligations are paid and performed in full, Developer will perform the covenants set forth below: Section 3.1. Defense of Collateral. Developer will defend the Collateral against all claims or demands of all persons at any time claiming the same or any interest therein. Developer shall comply with all legal requirements that apply to the Collateral. Section 3.2. No Transfer. Developer shall not, without Lender's prior written consent, in any way encumber or hypothecate, or create or permit to exist any lien, security interest or encumbrance on, or other interest in the Collateral except those created by this Agreement, nor shall Developer sell, transfer, assign, exchange or otherwise dispose of the Collateral. If the Collateral, or any apart thereof, is sold, transferred, assigned, exchanged, or otherwise disposed of in violation of these provisions, Lender's security interest shall continue in such Collateral or part thereof notwithstanding such sale, transfer, assignment, exchange or other disposition, andl Developer, shall hold the proceeds thereof in trust in a separate account for Lender's benefit. Developer shall, at Lender's request, transfer such proceeds to Lender in kind. -4-- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursem~ent Agreement.v2.doc Section 3.3. Consent. Developer shall not consent or agree to any modification or amendment of the Collateral, or any subordination of the Collateral to any other estate or interest, without Lender's prior written consent, which may be withheld for any reason or no reason. Section 3.4. Costs and Expenses. Lendler is authorized to pay, and Developer shall promptly reimburse, all reasonable costs and expenses incurred in the exercise of enforcement of Lender's rights hereunder, including reasonable attorneys' fees, and to apply any Collateral or proceeds thereof against such amounts, and to credit or use any further proceeds of the Collateral for the payment of any other amounts secured hereunder. ARTICLE VI Rights and Remedies Upon Default Section 4.1. Events of Default. The term "Event of Default" shall mean an Event of Default as defined in the Loan Agreement. Section 4.2. Rights and Remedies. Upon the occurrence of an Event of Default, Lender shall have the following rights and remedies: (a) Lender may declare the Obligations or any part thereof immediately due and payable, without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Developer; provided, however, that upon the occurrence of an Event of Default under Section 9.1 (d) or Section 9.1 (e) of the Loan Agreement, the Obligations shall become immediately due and payable vvithout notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, protest, or other formalities of any kind, all of which are hereby expressly waived by Developer. (b) In addition to all other rights and remedies granted to Lender in this Agreement and in any other instrument or agreement securing, evidencing, or relating to the Obligations or any part thereof, Lender shall have all of the rights and remedies of a secured party under the Uniform Commercial Code as adopted by the State of Texas. Without limiting the I;enerality of the foregoing, Lender may (i) without demand or notice to Developer, collect, receive, or take possession of the Collateral (including the reimbursement payments) or any part thereof and for that purpose Lender may enter upon any premises on which the Collateral is located and remove the Collateral therefrom or render it inoperable, and/or (ii) sell, lease, or otherwise dispose of the Collateral, or any part thereof, in one or more parcels at public or private sale or sales, at Lender's offices or elsewhere, for cash, on credit, or for future delivery. Upon the request of Lender, Developer shall assemble the Collateral and make it available to Lendler at any place designated by Lender that is -5-- ):Wmegy Bank\Oakmonteroup -Stone Creek Apartments\Reimburserrient Agreement.v2.doc reasonably convenient to Lender. Developer agrees that Lender shall not be obligated to give more than ten (10) days written notice of the time and place of any public sale or of the time after which arty private sale may take place and that such notice shall constitute reasonable notices of such matters. Developer shall be liable for all expenses of retaking, holding, preparing for sale, or the like, and all reasonable attorneys' fees, legal expenses, and all other costs and expenses incurred by Lender in connection with the collection of the Obligations and the enforcement of Lender's rights under this Agreement. Lender may apply the Collateral against the Obligations in such order and manner as Lender may elect in its sole discretion. Developer shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay the Obligations in full. Developer waives all rights of marshalling in respect of the Collateral. (c) Lender may cause any or all of the Collateral held by it to be transferred into the name of Lender or the name or names of Lender's nominee or nominees. ARTICLE V Mic~PllainPniic Section 5.1. Further Assurances. Developer, at its sole cost and expense, shall execute, acknowledge, deliver, file and record such further assignments, notices of assignments, financing statements, and other documents and agreements as Lender from time to time reasonably requires in order to perfect or further assure Developer's assignment, transfer and pledge of the City Agreement to Lender and Lender's resulting interest in the City Agreement. Section 5.2. No Waiver; Cumulative R:emedies. No failure on the part of Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided for in this Agreement are cumulative and not exclusive of any rights and remedies provided by law. Section 5.3. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Developer and Lender and their respective heirs, successors, and assigns, except that Developer may not assign any of its rights or obligations under this Agreement without the prior written consent of Lender. Section 5.4. Amendment. The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the parties hereto. Section 5.5. Notices. All notices and other communications provided for in this Agreement shall be in writing and may be mailed by certified mail return receipt requested, -6-- J:Wmegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursement Agreement.v2.doc or delivered by hand or overnight courier service to the intended recipient at the addresses specified below or at such other address as shall be designated by any party listed below in a notice to the other parties listed below given iin accordance with this Section. Notices intended for Developer shall be addressed to: Stone Creek Apartments, Ltd. 109 North Post Oak Lane, Suite 400 Houston, Texas 77024 Attention: William M. Burney, III Notices intended for Lender shall be addressed to: Amegy Bank National Association Five Post Oak Park 4400 Post Oak Parkway Houston, Texas 77027 Attention: Brent Reed Notices intended for the City shall be addressed to: City of Port Arthur 444 Fourth Street Port Arthur, Texas 77641 Attention: Stephen Fitzgikrbons, City Manager Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when delivered if by hand or overnight courier service or, in the case of a mailed notice, when duly deposited in the mails, in each case given or addressed as aforesaid. Section 5.6. Applicable Law; Venue; Service of Process. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas ar~d the applicable laws of the United States of America. This Agreement has been entered into in Jefferson County, Texas, and it shall be performable for all purposes in Jefferson County, Texas. The venue of, and provisions regardin;; service of process in connection with any action or proceeding hereunder shall be determined as provided in the Loan Agreement. Section 5.7. Headings. The headings,, captions, and arrangements used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. Section 5.8. Survival of Representations and Warranties. All representations and warranties made in this Agreement or in any certificate delivered pursuant hereto shall - ~ -- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursemment Agreement.v2.doc survive the execution and delivery of this Agreement, and no investigation by Lender shall affect the representations and warranties or the right of Lender to rely upon them. Section 5.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Section 5.10. Waiver of Bond. In the event Lender seeks to take possession of any or all of the Collateral by judicial process, Developer hereby irrevocably waives any bonds and any surety or security relating thereto that may be required by applicable law as an incident to such possession, and waive any demand for possession prior to the commencement of any such suit or action. Notwithstanding the foregoing, nothing herein shall adversely effect any payment and performance bonds obtained in compliance with the City Agreement. Section 5.11. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceabilitytyithout invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 5.12. Effect on City Agreement. Except as explicitly provided above, this Agreement does not affect the City's rights under the City Agreement, nor constitute a waiver of any such rights by the City. Section 5.13. Release of Security Interest. Upon payment in full of the Loan and provided that Borrower has no further Obligations (as defined in the Loan Agreement) outstanding and Lender has no further commitiment to fund monies to Borrower under the Loan Agreement, Lender shall upon the request of Developer, and at Developer's expense, provide a written release of its security interests and liens created under this Agreement. Section 5.13. Joint and Several Obligations. The obligations, representations and covenants of Borrower and Oakmont as Developer under this Agreement are joint and several in all respects, and all references to "Developer" or "Developers" in this Agreement are references to Borrower and Oakmont, jointly and severally. Section 5.14. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO OF:AL AGREEMENTS AMONG THE PARTIES HERETO. -8-- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimburserrient Agreement.v2.doc above. IN WITNESS WHEREOF, this instrument shall be effective as of the date set forth STONE CREEK APARTMENTS LTD., a Te~:as limited partnership By: Its general partner Stone Creek GP LLC By: William M. Burney III President OAKMONT PROPERTIES, INC. By:_ Name: Title: THE CITY OF PORT ARTHUR By:_ Name: Title: AMEGY BANK NATIONAL ASSOCIATION By:_ Brent Reed Assistant Vice President I ict of Fxhihitc Exhibit "A" -Property Description -9-~ ):Wmegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursement Agreement.v2.doc Exhibit "A" Property Description -10- J:\Amegy Bank\Oakmonteroup -Stone Creek Apartments\Reimbursement Agreement.v2.doc