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1e App Cont/SW Tech Center CITY OF CHANHASSEN 690 City Ctnl" Drillt, J'(} &x 147 . ChanhlllSm,Minnmt455317 Phon, 612.937.1900 Gmmzl Fax 612.937.5739 Engineering Fax 612.937.9152 Public Safety Fax 612.934.2524 ~b www.ci.chanhlllSm.mn.us - .-.. .1~ MEMORANDUM TO: Scott A. Botcher, City Manager Todd Gerhardt, Assistant City Manage~' January 18, 2000 FROM: DATE: SUBJ: Request for Assignment of the Development Contract ITom'CSM Investors to U.S. Bank National Association; Lot 1, Block 1, Southwest Tech Center Attached for the city council's consideration is a request for Assignment of the Development Contract for Lot 1, Block 1, Southwest Tech Center ITom CSM Investors, Inc. to U.S. Bank National Association. Approving this contract does not release CSM Investors ITom their obligations to perform under this contract, but makes U.S. Bank National Association a party to the development contract. If for some reason CSM Investors defaults on their loan, U.S. Bank National Association will then be bound by the conditions not completed in the Development Contract. Staff would recommend approving the Assignment of the Development Contract ITom CSM Investors to U.S. Bank National Association for Lot 1, Block 1, Southwest Tech Center. ATTACHMENT 1. Assignment of Development Contract g:\admin\tg~outhwest tech de assign.doc b, City ofChallhllSSm. A y,rowin¡ communit¡ with dtan lakes, q1I41it¡ schools, a charminr downtown. thrivinr businesses. and beaulifù! parks. A mal place to liv,. work. and p/av, I 'j: 2 ASSIGNMENT OF DEVELOPMENT CONTRACT . THIS ASSIGNMENT OF DEVELOPMENT CONTRACT is made and executed .by CSM INVESTORS, INC., a Minnesota corporation ("Borrower"), to U.S. BANK. NATIONAL ASSOCIATION, fonnerly known as First Bank National Association, a national banking association ("Lender"), as of the day of .1999. WITNES SETH: WHEREAS, Lender and Borrower have entered into a Revolving Construction Loan Agreement dated as of October 10, 1996, as amended and as supplemented by Project Addenda (collectively "Loan Agreement"), pursuant to which Lender has agreed to lend to Borrower, on a revolving basis, up to $22,000,000.00 to fmance acquisition, construction and equipping of real estate projects, including but not limited to an existing building located on certain land ("Land"), which, together with said building, is referred to herein as the "Premises", located in the City of Chanhassen, Hennepin County, Minnesota, and is legally described on ExhibitA attached hereto and hereby made a part hereof; and WHEREAS, in accordance with the Loan Agreement, Borrower has executed and delivered to Lender its Amended and Restated Revolving Note in the face principal amount of $22,000,000.00, which is secured by, among other instruments, a Combination Mortgage, Security Agreement and Fixture Financing Statement (as amended) covering Borrower's right, title and interest in and to the Premises, which prohibits construction of additional improvements on the Land without Lender's prior written consent; and WHEREAS, Borrower has requested Lender's consent to the construction upon a portion of the Land legally described on Exhibit B attached hereto and hereby made a part her-eof.of certain new improvements described on Exhibit C attached hereto and hereby made a part hereof (''New Improvements''); and WHEREAS, Borrower has entered into and executed a Development C<lntract, dated as of September 13, 1999 ("Development Contract"), with the City of Chanhassen, Minnesota ("City"); and WHEREAS, Lender will not consent to construction of the New Improvements UQless and until this Assignment is fully executed; and WHEREAS, Borrower desires to execute this Assignment, in accordance with the terms and provisions hereof, in order to induce Lender to consent to construction of the New Improvements; NOW, THEREFORE, in consideration of the foregoing and of the mutual promises contained herein, and for the additional consideration ofTen Dollars ($10.00), the receipt and sufficiency of which are hereby acknowledged by Borrower, the parties hereto hereby agree that the foregoing recitals are true and correct and are by this reference hereby made a part hereof as if fully set forth below, and further covenant and agree as follows: 1. Borrower hereby assigns its rights, title and interests in, under and pursuant to the Development Contract to Lender, it being understood and agreed that, if an event of default (as that tenn is defined in the Loan Agreement) does not occur; the New Improvements are completed in accordance with that certain Consent and Agreement of even date herewith, by and between Borrower and Lender relating to the New Improvements ("Agreement"); all obligations of Borrower under the Development Contract have been perfonned to the satisfaction of the City; and all amounts advanced by Lender to or for the benefit of Borrower pursuant to the Agreement with respect to the Premises are paid in full when due, and all other'obligations of Borrower under the Agreement are fully perfonned, then this Assignment shall terminate. 2. If such an event of default does occur, then Lender may, at its option, take over Borrower's position under the Development Contract. In such event, Lender shall have all of the rights of Borrower under the Development Contract. 3. Lender's taking over of Borrower's position under the Development Contract shall be preceded by at least three (3) Business Days' (as that tenn is defined in the Loan Agreement) prior written notice to all other parties thereto, but Lender shall have no obligations under the Development Contract unless and until Lender gives such notice and agrees in writing to assume some or all of the obligations of Borrower under the Development Contract, in which event Lender shall be bound by said obligations so assumed. ' 4. Borrower shall not pennit the Development Contract to be modified or amended, and Borrower shall not waive any of its rights under the Development Contract, without the prior written consent of Lender. 5. In addition, Borrower hereby grants to Lender a security interest in Borrower's rights, title and interests in, to and under the Development Contract, if and to -2- · the extent that a security interest may be granted therein under the Minnesota Unifonn Commercial Code, and Borrower acknowledges that Lender shall have all of the rights and remedies with respect thereto provided for by the Minnesota Unifonn Commercial Code, in addition to the other rights and remedies herein granted to Lender, in the event of the occurrence of an event of default under the Loan Agreement. 6. Subject to the provisions hereof, this Assignment shall be binding upon Borrower and its successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. Lender may assign its rights under this Assignment, without the consent of Borrower, but Borrower may not assign its rights or obligations under the Development Contract or under this Assignment without the prior written consent of Lender. 7. Any notice required or permitted to be given under or pursuant to this Assignment shall be given in the manner provided for the giving of notice in the Loan Agreement. IN WITNESS WHEREOF, Borrower has caused this instrument to be executed as of the day and year first above written. CSM INVESTORS, INC., a Minnesota corporation By Its vti:Ø 1¡L.e;liJliTNr -3- CONSENT THE CITY OF CHANHASSEN, a Minnesota municipal corporation ("City''), hereby (a) consents to the foregoing assignment; (b) agrees to provide Lender with a copy of each notice sent by the City to Borrower under the Development Contract by hand delivery or by registered mail at the following address: U.s. Bank National Association, Mail Station - MPFP0509. 60 1 Second Avenue South, Minneapolis, Minnesota 55402-4302, Attn: Real Estate Banking Division Head; (c) agrees to accept perfonnance by Lender under the Development Contract as equivalent to perfonnance by Borrower thereunder, if Lender elects to perform thereunder; and (d) agrees not to enter any amendment or modification of the Development Contract without the prior written consent of Lender. CITY OF CHANHASSEN By Its And Its -4- · EXHIBIT A EXIDBIT B Lot 1, Block 1, Southwest Tech Center, Hennepin County, Minnesota. I EXHIBIT C An approximately 46,644 square foot, I-story office building of rock face decorative concrete block and glass construction, together with related improvements including at least 144 automobile parking spaces.