Exhibit Number 10.3
FORBEARANCE AGREEMENT
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THIS FORBEARANCE AGREEMENT ("Agreement") is entered into on March 27, 1995 by
and between UNIVERSITY REAL ESTATE PARTNERSHIP V, a California limited
partnership ("Borrower") and IMPERIAL BANK, a California banking corporation
("Imperial").
RECITALS
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A. Prior to the date hereof, Imperial made a loan ("Loan 164") to
Borrower in the original principal sum of $7,650,000.00. Loan 164 is evidenced
by that certain promissory note ("Loan 164 Note") dated November 29, 1989, in
the original principal sum of $7,650,000.00, executed by Borrower in favor of
Imperial. The Loan 164 Note is secured by, among other things, that certain
deed of trust ("Loan 164 Deed of Trust") dated November 29, 1989, executed by
Borrower in favor of Imperial, and recorded December 1, 1989 as Instrument
No. 89-650874 in the Official Records of San Diego County, California,
encumbering that certain real property ("Property") more particularly described
in Exhibit "A", attached hereto.
B. Prior to the date hereof, Imperial made a loan ("Loan 197") to
Borrower in the original principal sum of $1,500,000.00. Loan 197 is evidenced
by that certain promissory note ("Loan 197 Note") dated September 9, 1993, in
the original principal sum of $1,500,000.00, executed by Borrower in favor of
Imperial. The Loan 197 Note is secured by, among other things, that certain
deed of trust ("Loan 197 Deed of Trust") dated September 9, 1993, executed by
Borrower in favor of Imperial, and recorded September 15, 1993 as Instrument
No. 00-0000000 in the Official Records of San Diego County, California,
encumbering the Property.
C. Borrower is currently in default under Loan 164 and Loan 197, and all
outstanding principal under the Loan 164 Note and the Loan 197 Note, together
with accrued but unpaid interest and other charges thereon is currently due and
payable in full.
D. Imperial has caused to be recorded: (i) a Notice of Default in
connection with Loan 164, which recorded January 17, 1995 as instrument
no. 00-0000000 in the Official Records of San Diego County, California; and (ii)
a Notice of Default in connection with Loan 197, which recorded January 17, 1995
as instrument no. 00-0000000 in the Official Records of San Diego County,
California.
E. Borrower and Imperial desire to enter into this Agreement for the
purposes of affording Borrower the opportunity to cure its defaults under Loan
164 and Loan 197 prior to Imperial pursuing its remedies for Borrower's defaults
thereunder, including without limitation, the foreclosure of the Loan 164 Deed
of Trust and the Loan 197 Deed of Trust.
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OPERATIVE PROVISIONS
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Now therefore, for valuable consideration, the receipt and adequacy of which are
hereby agree as follows:
1. Forbearance from Proceeding with Foreclosure
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(a) Provided that Borrower: (i) makes the payments described in paragraph 3
below to Imperial, in immediately available funds, and at the times and in the
manner set forth in said paragraph 3; and (ii) performs each of its additional
obligations under this Agreement, at the times and in the manner set forth
herein, then in such event, Imperial shall forbear from preceding with
foreclosure or take any other action in connection with the default with respect
to the Loan 164 Deed of Trust and the Loan 197 Deed of Trust for a period
("Forbearance Period") commencing as of the date hereof through December 1,
2000.
(b) Upon the earlier to occur of: (i) the termination of the Forbearance
Period; or (ii) a default by Borrower under this Agreement, including without
limitation, the failure by Borrower to make any payment to Imperial described in
paragraph 2 below, at the time and in the manner set forth in said paragraph 2,
then in such event, the provisions of this paragraph shall be null and void, and
Imperial shall have the right to enforce any of the remedies afforded to
Imperial for any default by Borrower under Loan 164 or Loan 197 including
without limitation, and subject to applicable California law, the sale of the
Property.
2. Payments.
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(a) On April 1, 1995, Borrower shall pay to Imperial, in immediately available
funds, an aggregate amount equal to the sum of: (i) an amount equal to the
interest which has accrued on the outstanding principal balance of Loan 164
during the period commencing September 1, 1994 through and including March 31,
1995, at an interest rate ("Accrual Rate") equal to nine percent (9%) per year;
and (iii) an amount equal to the interest which has accrued on the outstanding
principal balance of Loan 197 during the period commencing September 1, 1994
through and including March 31, 1995, at an interest rate equal to eleven
percent (11%) per year. Promptly thereafter, Imperial shall rescind the Notice
of Default on Loan 164 described in paragraph D above.
(b) Commencing on May 1, 1995 and thereafter on the first day of each month
during the Forbearance Period, Borrower shall pay to Imperial, in immediately
available funds: (i) the sum of $6,595.00, which sum shall be applied to pay
accrued interest and other charges then due and payable under Loan 164.
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(c) On December 1, 2000, provided that Borrower complies with the terms and
conditions contained in this Agreement, and that no event of default then exists
or has been declared on Loan 164 or Loan 197 from the date of the execution
hereof, Imperial shall forgive the amount of interest on Loan 197 accruing from
April 1, 1995 to December 1, 2000, that remains unpaid after the receipt and
application of the amount set forth in paragraph 4(b) above.
3. Entire Agreement. No employee or agent of any of the parties hereto
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has the authority to orally modify any term or condition of this Agreement nor
any authority to make any representation or agreement other than as contained in
this Agreement, and unless any representation or agreement is contained in this
Agreement or added by written agreement executed by each of the parties hereto,
it shall not be binding nor otherwise affect the validity of this Agreement.
4. Amendment of Agreement. No modification of, deletion from, or
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addition to this Agreement shall be effective unless made in writing and
executed by each of the parties hereto.
5. Waiver. The failure by any party to enforce any term or provision of
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this Agreement, the Notes or the Deeds of Trust shall not constitute a waiver of
the right to enforce the same term or provision or any other term or provision,
thereafter. No wavier by any party of any term or provision of this Agreement,
the Notes or the Deeds of Trust shall be deemed or shall constitute a waiver of
any other provision of this Agreement, the Notes or the Deeds of Trust (whether
or not similar), nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided in writing.
6. Severability. In the event any clause, sentence, term or provision of
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this Agreement shall be held by any court of competent jurisdiction to be
illegal, invalid or unenforceable for any reason, the remaining portions of this
Agreement shall nonetheless remain in full force and effect.
7. Construction of Agreement. The section headings contained in this
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Agreement have been inserted for convenience only, and shall not be considered
or referred to in resolving questions or interpretation or construction. In
determining the meaning of, or resolving any ambiguity with respect to, any
word, phrase or provision of this Agreement, no uncertainty or ambiguity shall
be construed or resolved against any party under any rule of construction,
including the party primarily responsible for the drafting and preparation of
this Agreement. The parties hereto acknowledge that they were represented by
legal counsel in conjunction with this transaction.
8. Gender and Intonation. Wherever the context of this Agreement may so
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require, the gender shall include the masculine, feminine and neuter, and the
intonation shall include the singular and plural.
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9. Governing Law. This Agreement is made under and shall be construed in
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accordance with and governed by the laws of the State of California, without
giving effect to the principals of conflicts of law.
10. Attorneys' Fees. In the event either party to this Agreement shall
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commence legal proceedings against the other to enforce the provisions of this
Agreement or to declare rights and/or obligations under this Agreement, the
prevailing party shall be entitled to recover from the losing party its costs of
suit, including reasonable attorneys' fees, as shall be determined by the court.
11. Time of Essence. Time is of the strictest essence with respect to the
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obligations of each party under this Agreement.
12. Inurement. This Agreement shall inure to the benefit of and be
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binding upon the parties hereto, and their respective successors and assigns.
13. Execution Date. Notwithstanding anything contained herein to the
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contrary, in the event Borrower fails to: (i) execute and deliver a copy of this
Agreement to Imperial; and (ii) make the payment described in paragraph 2(a)
above to Imperial on or before April 1, 1995, then in such event this Agreement
shall immediately terminate, and each of the provisions hereof shall be null and
void, and of no further force or effect.
14. Incorporation of Recitals. The foregoing Recitals are incorporated
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herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first hereinabove written.
SIGNATURES ON THE FOLLOWING PAGE
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SIGNATURE PAGE ATTACHED TO THAT CERTAIN FORBEARANCE AGREEMENT DATED MARCH 27,
1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA LIMITED
PARTNERSHIP, IN FAVOR OF IMPERIAL BANK, A CALIFORNIA CORPORATION.
IMPERIAL BANK, a California banking corporation
By:
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Xxxxx Xxxxx, Xx. Vice President
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Executive Vice President
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EXHIBIT "A" LEGAL DESCRIPTION ATTACHED TO THAT CERTAIN FORBEARANCE AGREEMENT
DATED MARCH 27, 1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A
CALIFORNIA LIMITED PARTNERSHIP IN FAVOR OR IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION.
PARCEL 1:
XXXX 0, 0 XXX 0 XX XXXXXX XXXXXXXX, XX THE CITY OF SAN DIEGO, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 3802, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 10, 1953.
PARCEL 2:
THAT PORTION OF PUEBLO XXX 000 XX XXX XXXXXX XXXXX XX XXX XXXXX, XX THE CITY OF
SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF BY
XXXXX XXXXXX, A CERTIFIED COPY OF WHICH WAS FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, NOVEMBER 14, 1921, AND IS KNOWN AS MISCELLANEOUS
MAP NO. 36, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE SOUTHEASTERLY LINE OF SAID PUEBLO LOT 335
WITH A LINE WHICH IS PARALLEL WITH AND 60 FEET NORTHEASTERLY AT RIGHT ANGLES
FROM THE SOUTHWESTERLY LINE OF SAID PUEBLO LOT 335; THENCE ALONG SAID PARALLEL
LINE NORTH 53(degrees)5655" WEST 124.47 FEET; THENCE NORTH 30(degrees)16 EAST
95.59 FEET; THENCE NORTH 5(degrees)0239" WEST 7.00 FEET TO THE TRUE POINT OF
BEGINNING BEING THE BEGINNING OF AN 88 FOOT RADIUS CURVE, CONCAVE NORTHWESTERLY
THE RADIAL LINE OF SAID CURVE BEARING SOUTH 67(degrees)0801" WEST TO SAID
BEGINNING OF CURVE; THENCE SOUTHWESTERLY ALONG SAID CURVE 121.41 FEET THROUGH AN
ANGLE OF 79(degrees)0251" TO SAID LINE WHICH IS PARALLEL WITH AND 60 FEET
NORTHEASTERLY AT RIGHT ANGLES FROM THE SOUTHWESTERLY LINE OF SAID LOT 335;
THENCE ALONG SAID PARALLEL LINE NORTH 53(degrees)5655" WEST TO THE NORTHWESTERLY
LINE TO THE MOST NORTHERLY CORNER OF SAID LOT; THENCE ALONG THE NORTHEASTERLY
LINE OF SAID LOT SOUTH 53(degrees)5840" EAST TO A LINE WHICH BEARS NORTH
5(degrees)0239" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH
5(degrees)0239" EAST 407.47 FEET TO THE TRUE POINT OF BEGINNING.
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