Form 10-26

Assignment of Architect’s Agreement and Consent

Basic Information

Date:

Borrower:

Borrower’s Mailing Address:

Lender:

Lender’s Mailing Address:

Architect:

Architect’s Mailing Address:

Architect’s Agreement:

Plans:

Project:

Construction Loan Agreement

Date:

Loan (amount):

Deed of Trust:

Date:

Trustee:

Property:

A.Background

A.1.Borrower is entering into the Construction Loan Agreement with Lender under which Lender will provide the Loan for construction of the Project.

A.2.As security for the Loan, Borrower has executed and delivered the Deed of Trust.

A.3.It is a requirement for the advance of the Loan that Lender, Borrower, and Architect enter into this Assignment of Architect’s Agreement and Consent.

B.Assignment

B.1.Borrower hereby assigns to Lender the Architect’s Agreement and its rights to all Plans as security for the Loan.

B.2.Borrower and Architect, by executing this Assignment, agree that Lender does not assume any of Borrower’s obligations or duties concerning the Plans or the Architect’s Agreement, including but not limited to the obligation to pay for the preparation of the Plans or to compensate Architect for performance of the Architect’s Agreement. Borrower agrees to indemnify and hold Lender harmless against and from any loss, cost, liability, or expense (including but not limited to reasonable attorney’s fees) resulting from any failure of Bor­rower to perform its obligations or duties under the Architect’s Agreement or with regard to the Plans.

B.3.Borrower hereby irrevocably constitutes and appoints Lender as its attorney-in-fact to demand, receive, and enforce Borrower’s rights with respect to the Plans or the Archi­tect’s Agreement; to give appropriate receipts, releases, and satisfactions for and on behalf of Borrower; and to do all acts in the name of Borrower or in the name of Lender with the same force and effect as Borrower could do if this Assignment had not been made.

C.Borrower’s Representations and Warranties

Borrower hereby represents and warrants to and agrees with Lender as follows:

C.1.Exhibit A attached hereto is a complete and accurate description of all of the Plans.

C.2.The Plans have no modifications except as described in Exhibit A.

C.3.Borrower agrees that it will deliver a true and correct copy of the Architect’s Agreement to Lender.

C.4.Lender may use the Plans or the Architect’s Agreement for any purpose relating to the Project including but not limited to inspections of construction and the completion of the Project.

C.5.Lender’s acceptance of this Assignment shall not constitute approval of the Plans by Lender. Lender has no liability or obligation whatsoever in connection with the Plans and no responsibility for their adequacy or for the construction of the Project contemplated by the Plans. Lender has no duty to inspect the Project, and if Lender should inspect the Project, Lender shall have no liability or obligation to Borrower arising out of such inspection. No such inspection nor any failure by Lender to make objections after any such inspection shall constitute a waiver of Lender’s right thereafter to insist that the Project be constructed in accordance with the Plans.

C.6.Borrower has made no previous assignment of its interest in the Plans or the Architect’s Agreement and agrees not to assign, sell, pledge, transfer, mortgage, or otherwise encumber its interest in the Plans or the Architect’s Agreement as long as this Assignment is in effect.

D.Architect’s Representations

Architect represents and warrants to Lender that as of the date hereof:

D.1.Architect has not reached any agreement or entered into any contract, written or oral, with respect to the construction of the Project, other than the Architect’s Agreement, which has been duly executed and is in full force and effect.

D.2.The attached copy of the Architect’s Agreement is true, correct, and complete, and it has no amendments or modifications (other than those attached, if any).

D.3.Architect has no counterclaims, rights of setoff, or defenses to Borrower’s enforcement of Borrower’s rights under the Architect’s Agreement.

D.4.To the best of Architect’s knowledge, (a) the Plans have been or will be approved by all appropriate applicable Governmental Authorities (as defined in the Construc­tion Loan Agreement); (b) such Plans are the plans to be used in actual construction of the Project; (c) the Plans are sufficient to the extent indicated in the Architect’s Agreement for the construction of the Project; (d) if the Project is constructed in accordance with the Plans, it will not violate any applicable and enforced codes and requirements as interpreted by the appropriate agency; (e) all Required Permits (as defined in the Construction Loan Agreement) have been or will be obtained; (f) the attached list is a comprehensive list of the plans and drawings by name, page number, and date; and (g) there have been no modifications thereof except as described in Exhibit A.

E.Default and Remedies

Architect consents and agrees in all respects to the creation in favor of Lender by Bor­rower of a security interest in Borrower’s rights in the Architect’s Agreement as security for the full and complete payment and performance of Borrower’s indebtedness and obligations to Lender, and Architect further agrees with Lender as follows:

E.1.If a default occurs in connection with the Loan, Architect will, upon notice from Lender, and at Lender’s election, (a) complete the performance of the work in accordance with the Architect’s Agreement for the benefit of Lender notwithstanding any previous default thereunder by Borrower, and Architect agrees that Lender’s rights in this agreement are solely to protect its rights as a lender, and Lender shall have no liability to Architect what­soever by reason of any such default by Borrower unless Architect receives notice from Lender as provided herein to complete the performance of the work in accordance with the Architect’s Agreement, and that Architect shall not seek payment from Lender for any perfor­mance of the work performed before Lender’s notice, provided that Architect is paid, in accordance with the Architect’s Agreement, for all work thereafter rendered by Architect for the benefit of Lender; or (b) immediately cease performance of the work in accordance with the Architect’s Agreement and vacate the Project.

E.1.If a default occurs in connection with the Loan, Architect will, upon notice from Lender, and at Lender’s election, (a) complete the performance of the work in accordance with the Architect’s Agreement for the benefit of Lender notwithstanding any previous default thereunder by Borrower, and Architect agrees that Lender’s rights in this agreement are solely to protect its rights as a lender, and Lender shall have no liability to Architect what­soever by reason of any such default by Borrower unless Architect receives notice from Lender as provided herein to complete the performance of the work in accordance with the Architect’s Agreement, in which case Lender shall be responsible for payment of amounts due to Architect, whether performed before or after receipt of notice from Lender; or (b) immedi­ately cease performance of the work in accordance with the Architect’s Agreement and vacate the Project.

E.2.Upon the occurrence of a default by Borrower under the Loan, Architect will not exercise any remedies thereunder (other than the cessation of the work for monetary defaults pending either the cure thereof or the request by Lender that, in accordance with para­graph E.1., Architect complete the work for the benefit of Lender) until it has notified Lender in writing and granted Lender thirty days (or a reasonable time if the default cannot be cured in thirty days) after receipt by Lender of that notice, during which Lender shall be entitled, but not obligated, to cure the default.

E.2.Upon the occurrence of a default by Borrower under the Loan, Architect will not exercise any remedies thereunder (other than the cessation of the work for monetary defaults pending the cure thereof) until it has notified Lender in writing and granted Lender thirty days (or a reasonable time if the default cannot be cured in thirty days) after receipt by Lender of that notice, during which Lender shall be entitled, but not obligated, to cure the default.

E.3.In the event any of the proceeds of the Loan are disbursed by Lender directly to Architect, Architect will receive all such disbursements, will hold them as a trust fund for pay­ing the costs of the work under the Architect’s Agreement, and will apply them only to the payment of such costs and for no other purposes.

E.4.Upon request by Lender, Architect shall furnish to Lender a current list of all persons or firms with whom Architect has entered into subcontracts or other agreements relat­ing to the work in connection with the Project, together with a statement of the status of each such subcontract or agreement and the respective amounts, if any, owed by Architect thereun­der.

E.5.After execution and delivery of the Architect’s Agreement, Architect will not amend the Architect’s Agreement without the prior written consent of Lender, except upon terms similar to those negotiated by and between Lender and Borrower in the Construction Loan Agreement.

E.6.Lender and Lender’s successors may use the Plans for any purpose relating to the Project including but not limited to inspections of construction and the completion of the Project without any further cost to Lender or its successors, regardless of whether Architect is retained to complete the Project.

F.General Provisions

F.1.Architect hereby subordinates all liens in its favor to the Deed of Trust and all other liens in favor of Lender with the same force and effect as though the Deed of Trust and any other instrument creating or evidencing liens in favor of the Lender had been executed, delivered, and recorded before the creation or inception of the liens in favor of Architect.

F.2.Nothing herein shall be construed to impose upon Lender any duty to see to the application of the proceeds of the Loan. Architect acknowledges that Lender is obligated with respect thereto only to Borrower and to no other person or entity.

F.3.This instrument shall be binding upon Architect and its heirs, personal represen­tatives, successors, and assigns and shall inure to the benefit of Lender and its successors and assigns.

   
[Name of architect]

   
[Name of borrower]

   
[Name of lender]

Exhibit A

Plans