[Desert Hills]
SETTLEMENT AND FORBEARANCE AGREEMENT
THIS SETTLEMENT AND FORBEARANCE AGREEMENT (this
"Agreement") is made as of the 31st day of July, 1995, by and
among DESERT HILLS--264, LTD., an Oregon limited partnership
having an office c/x Xxxxxxx Realty Corp., 0000 XX Xxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 ("Borrower"), SUMMIT
TAX EXEMPT X.X. XX, a Delaware limited partnership having an
office c/o Related Capital Company, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000 ("Summit"), XXXXXXX REALTY CORP., an Oregon
corporation having an office at 0000 XX Xxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxx 00000 (the "Corporation"), XXXXXX X.
XXXXXXX, an individual having an office c/x Xxxxxxx Realty Corp.,
0000 XX Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000
("Xxxxxxx") and CTL MANAGEMENT, INC., an Oregon corporation
having an office at 0000 XX Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxx 00000 ("CTL Management"). Borrower and Desert
Hills (defined below) may hereinafter be referred to, individual-
ly, as a "Borrower" and, collectively, as the "Borrowers".
RECITALS:
A. Borrower is the owner and holder of fee title in
certain premises located in the City of Lancaster, County of Los
Angeles, State of California, which premises are commonly known
as Sunset Downs Apartments and are more particularly described in
Exhibit A attached hereto (such premises, together with the
improvements located thereon, are hereinafter referred to as the
"Property").
B. Pursuant to a certain Indenture of Trust (the
"Indenture") dated as of February 1, 1987 from the Lancaster
Redevelopment Agency ("Issuer") to The Bank of California, N.A.,
predecessor in interest to First Trust California, as trustee
("Trustee"), Issuer issued certain Multifamily Housing Revenue
Refunding Bonds (Sunset Downs Project) 1987 Series A (the
"Bonds") in the aggregate principal amount of $15,000,000, the
proceeds of which were used to fund a certain mortgage loan (the
"Loan"), in the original principal amount of $15,000,000, made by
Issuer as of February 12, 1987 to Borrower.
C. The Loan was made pursuant to a certain Loan
Agreement dated as of February 1, 1987 among Borrower, Issuer and
Trustee (the "Loan Agreement"), is evidenced by a promissory note
(the "Note") executed by Borrower, and is secured by a
Construction Trust Deed, Security Agreement, Assignment of Rents
and Fixture Filing dated as of February 1, 1987 (the "Deed of
Trust") covering the Property, and various other loan documents
described in the Loan Agreement (collectively, the "Loan
Documents"). Reference is also made to a certain letter
agreement dated July 10, 1992 between Borrower and Summit, which
letter agreement hereby constitutes one of the Loan Documents.
D. Pursuant to the Indenture, and with the consent of
Borrower, the Loan Agreement, the Note, the Deed of Trust,
certain other documents and property and all payments to be made
by Borrower under the Loan Agreement (except certain specified
payments) were assigned by Issuer to the Trustee as security for
the Bonds.
E. All of the Bonds issued pursuant to the Indenture
are owned and held by Summit.
F. In accordance with Section 7.02(a) of the
Indenture, as the single owner of the Bonds, Summit is the
"Acting Party", and has the sole authority to take actions in
respect of any "Event of Default" under the Indenture and has the
right to exercise certain remedies under the Loan Agreement.
G. By letter dated as of May 18, 1995, Borrower
acknowledged and agreed that an "Event of Default" (as defined in
the Loan Documents) has occurred under the Loan Documents by
reason of the failure of Borrower to pay the full amount of Base
Interest (as defined in the Loan Documents) when due.
H. As a result of the default under the Loan
Documents, Summit is entitled to declare the obligations of
Borrower under the Loan Documents to be immediately due and
payable.
I. Borrower has requested that Summit forbear from
exercising its right (i) to declare the obligations of Borrower
under the Loan Documents immediately due and payable and (ii) to
commence an action to foreclose the Deed of Trust.
J. Summit is willing to forbear from exercising its
rights (i) to declare the obligations of Borrower under the Loan
Documents immediately due and payable and (ii) to commence an
action to foreclose the Deed of Trust only if Borrower and the
Corporation enter into a settlement with Summit with respect to
the Property on the terms and conditions hereinafter set forth,
including, without limitation, the delivery by the Corporation of
a certain guaranty of payment, a copy of which is annexed hereto
as Exhibit B (the "Vanishing Guaranty").
K. Desert Terrace--184, Ltd., an Oregon limited
partnership ("Desert Terrace"), is the owner and holder of fee
title in certain premises located in the City of Lancaster,
County of Los Angeles, State of California, which premises are
commonly known as Sunset Terrace Apartments and are more
particularly described in Exhibit A-1 attached hereto (such
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premises, together with the improvements located thereon, are
hereinafter referred to as the "Desert Terrace Property").
NOW, THEREFORE, in light of the foregoing facts and in
consideration of the respective undertakings of the parties
hereto, it is hereby agreed as follows:
1. Acknowledgments of Borrower, Corporation and
Xxxxxxx. Each of Borrower, the Corporation and Xxxxxxx
acknowledges that:
(i) the Loan Documents are in full force and effect
and are valid and enforceable in accordance with their terms
against Borrower;
(ii) pursuant to the Loan Documents, Summit has a
valid and perfected first lien and security interest in and
to the Property and the other property secured under the
Deed of Trust, the Indenture and the other Loan Documents;
(iii) pursuant to the Loan Documents, Summit has a first
priority, fully perfected security interest in all rents,
issues, profits, rent equivalent income, receipts, insurance
proceeds, tax refunds, security deposits and any other
revenues, income or proceeds of any nature whatsoever
generated by, arising from or otherwise related to the
Property and any other payments covered by any assignment of
rents that has been or will be executed and delivered by
Borrower to Summit and/or Issuer as security for its
obligations under the Loan Documents (collectively,
"Rents");
(iv) an event of default has occurred under the terms
of the Loan Documents;
(v) each of Summit and Issuer has fully complied with
its obligations under the Loan Documents, and Borrower does
not have any defenses, offsets or claims of any kind or
nature with respect to Borrower's obligations under the Loan
Documents which would in any manner limit, diminish or
eliminate any of the rights or remedies of Summit or Issuer
under the Loan Documents and that to the extent that any
such defenses, claims or offsets exist as of the date these
acknowledgments are made, they are hereby waived and
released; and
(vi) the existing accrued and unpaid base interest
under the Loan as of July 31, 1995 is $655,770.43 (and
continues to accrue in accordance with the terms of the Note
and the other Loan Documents) and the existing principal
balance of the Loan as of the date hereof is $15,000,000
(exclusive of any deferred or other interest of any nature
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thereon and all fees, costs and expenses of Summit and
Issuer with respect to the Loan).
2. Agreement by Summit to Forbear. Notwithstanding
the existing events of default under the Loan Documents, Summit
shall, until the occurrence of a Forbearance Termination Event,
forbear from declaring the obligations of Borrower under the Loan
Documents immediately due and payable and from demanding payment
thereof, and from foreclosing or commencing a foreclosure action
as a result of such existing defaults. For purposes of this
Agreement, a "Forbearance Termination Event" shall mean the
occurrence of any one or more of the following events which is
not cured within applicable notice and cure periods, if any:
(a) if Borrower, Xxxxxxx, the Corporation or any of
their respective affiliates shall commit a material default or
otherwise materially breach any of their material
representations, warranties or covenants under the terms of this
Agreement, the Management Agreement (defined below), the
Vanishing Guarantee or any of the other material documents and
material agreements executed in connection with the Loan or the
transactions contemplated hereby (collectively, the "Forbearance
Documents");
(b) if on or before 3:00 p.m. New York, New York time
on January 30, 1997, time being of the essence, Summit shall not
have received all principal, all accrued and unpaid base
interest, accrued interest, deferred interest, contingent
interest and other interest of any nature whatsoever, and sums
other than principal and interest (including, without limitation,
all fees, costs, and expenses of Summit) due under the Loan
Documents, and any other amounts of any nature whatsoever due
under the Loan Documents (it being expressly agreed that there
shall be no grace, notice or cure period with respect to the
obligations under this sub-paragraph (b);
(c) if at any time during the term of this Agreement:
(i) Xxxxxxx or his heirs, executors or personal representatives
shall cease to be the sole general partner of Borrower; (ii)
without the prior written consent of Summit, which shall not be
unreasonably withheld, one hundred (100%) percent of the
ownership interest in Borrower and in the profits and losses of
Borrower shall cease to be owned and controlled on an
unencumbered basis (A) one (1%) percent by Xxxxxxx, (B) twenty-
four (24%) percent by Pacific Frontier Wood Markets, Inc., (C)
fifteen (15%) percent by Xxxxxxx X. Xxxxxxx and (D) sixty (60%)
percent by CSL Properties, Inc.; or (iii) Xxxxxxx shall sell,
transfer of otherwise dispose of all or any portion of his
interest in Borrower;
(d) if a voluntary case, or an involuntary case which
is not dismissed within 90 days, is commenced under title 11 of
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the United States Code (the "Bankruptcy Code") or under any other
federal or state bankruptcy or insolvency statute by or against
any one or more of Borrower, Xxxxxxx or the Corporation;
(e) if the Certificate and Agreement of Limited
Partnership Agreement, dated as of October 10, 1984, with respect
to Borrower, or any other or similar agreement or instrument
governing Borrower (it being acknowledged and agreed that Summit
shall be deemed to be and hereby is a third party beneficiary of
such documents, agreements and instruments, collectively,
"Organizational Documents") shall not be modified or amended (x)
in any material respect without the prior written approval of
Summit or (y) in a non-material respect without notice to Summit;
(f) if any of Borrower's Organizational Documents
shall be violated or breached in any way that material adversely
affects the interests of Summit;
(g) if any one or more of Borrower, Xxxxxxx, the
Corporation, or any person, party or entity acting by, for or
under the control (either directly or indirectly) of Borrower,
Xxxxxxx or the Corporation shall take any step or action which
has the effect of materially interfering with or preventing the
implementation of any one or more of the material terms,
provisions or conditions of this Agreement, or which has the
effect of materially interfering with or preventing in any manner
whatsoever the collection or application of the Rents (as set
forth herein;
(h) (i) the termination or dissolution of any one or
more of Borrower or the Corporation, or (ii) the failure of any
one or more of Borrower or the Corporation to maintain its
corporate/partnership existence; provided, however, any of such
acts by the Corporation shall not be a Forbearance Termination
Event if the Corporation shall have been replaced as a guarantor
under the Vanishing Guaranty in accordance with the terms
thereof;
(i) the occurrence of a Forbearance Termination Event
under that certain settlement and forbearance agreement dated as
of the date hereof among Xxxxxxx, CTL, the Corporation, Summit
Tax Exempt Bond Fund, L.P. ("Summit Fund") and Desert Terrace
(the "Other Forbearance Agreement");
(j) the failure by any of Borrower's Affiliates,
including, without limitation, CTL, Xxxxxxx and the Corporation
to fulfill any of its material covenants or other material
obligations under that certain Settlement Agreement dated as of
July 31, 1995 among Desert Xxxxxx--000, Xxxxxx Xxxxx Xxxx.--000
Xxx., Xxxxxxxxx--000, Ltd., the Corporation, Xxxxxxx, CTL
Management, Summit II and Summit Tax Exempt L.P. III (the
"Settlement Agreement"); and
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(k) if that certain property and cash management
agreement dated as of the date hereof among Summit, Related
Management Company ("New Manager") and Borrower (the "Management
Agreement") is modified, amended or terminated by an act of
Borrower without Summit's prior written consent;
provided, however, the occurrence of any one or more of
the events set forth in clauses (a), (c), (e), (f), (g), (h), (j)
and (k) above shall not constitute a "Forbearance Termination
Event" if any such event is fully cured (including indefeasible
payment to Summit of any loss, cost or expense resulting from
such breaches, default or act) as of the tenth (10th) day after
receipt of written notice by Summit to Borrower of such event or
default; provided, further, that such ten (10) day cure period
shall be extended to forty-five (45) days if and to the extent
that Borrower has commenced curing such default and is diligently
prosecuting the completion of same.
3. Post-Forbearance Transfer of the Property.
(a) Upon the occurrence of a Forbearance Termination
Event, and without the necessity of any other or further notice
to Borrower, Xxxxxxx, the Corporation, any limited partner in
Borrower or any other person, party or entity (i) all obligations
of Borrower under the Loan Documents shall automatically, and
without the necessity of any other or further act or instrument,
become immediately due and payable in full, (ii) the Property
shall be transferred pursuant to a Post-Forbearance Transfer of
the Property, as hereinafter described, and (iii) only if the
Transfer Documents shall not be unconditionally delivered
pursuant to a Post-Forbearance Transfer of the Property within
five (5) days after written demand by Summit, Summit shall have
the absolute and unconditional right to pursue all rights and
remedies available to Summit under the Loan Documents including,
without limitation, commencing a foreclosure action with respect
to the Property; provided that Seller shall not be required to
grant Borrower such five (5) day period prior to pursuing any
right or remedy including, without limitation, commencing a
foreclosure action, and shall be entitled to immediately exercise
its remedies under the Loan Documents, if the Forbearance
Termination Event occurred under Section 2(b) hereof. However,
notwithstanding the foregoing, in the event that the Borrower
unconditionally delivers the Transfer Documents prior to a
Forbearance Termination Event, and the Desert Hills Property is
not subject to any liens, encumbrances or tenancies other than
those permitted by the Loan Documents, then Summit shall have no
right to commence a Foreclosure (defined below) against Borrower,
Corporation or Xxxxxxx in respect of the Loan Documents prior to
or after recording the Desert Hills Deed (defined below).
(b) For purposes of this Agreement, a "Post-
Forbearance Transfer of the Property" shall mean a transfer of
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the Property that occurs at the election of Summit, which
election shall be made by Summit in the exercise of its sole and
absolute discretion (i) by unconditional execution, acknowledg-
ment and delivery by Borrower of the Transfer Documents (defined
below), in which event the Property will be transferred subject
to the Deed of Trust and the other Loan Documents, without any
offsets or counterclaims of any kind or nature (a "Title
Transfer") or (ii) if the Transfer Documents shall not be
unconditionally delivered within five (5) days after demand and
after the occurrence of a Forbearance Termination Event by Summit
(as to which date time shall be of the essence) pursuant to a
consensual non-judicial foreclosure (or judicial foreclosure, if
Summit elects) of the Deed of Trust under applicable California
law (a "Foreclosure"). In connection with such foreclosure
action, Summit shall have all rights against its collateral
available to a mortgagee or a trust deed beneficiary under the
applicable California law. Borrower hereby agrees not to
contest, impede or in any way interfere with such foreclosure by
Summit of the Deed of Trust, including, without limitation,
filing any documents or papers (such as answers, motions, claims
or counterclaims).
(c) The term "Transfer Documents" means, collectively,
a certain grant deed (the "Desert Hills Deed"), substantially in
the form of Exhibit C annexed hereto, the transfer documents
listed on Exhibit C-1 and such further documents or instruments
that Summit may reasonably request for the purpose of
transferring title to the Property to Summit or its nominee,
assignee or designee (such person or entity acquiring title to
the Property is defined as the "Transferee"), including, without
limitation, such other customary and reasonable affidavits,
documents or instruments as the Transferee's Title Company may
require in order to issue its fee title policy, which may include
affidavits of title and other affidavits regarding the payment of
franchise or other similar taxes with respect to matters not
subject to accurate disclosure by public records at de minimis
cost.
In connection with a Post-Forbearance Transfer of the Property,
whether by means of a Title Transfer or a Foreclosure, Borrower
hereby agrees to cooperate fully with Summit and the Transferee
and hereby agrees to take any and all steps or actions reasonably
requested by Summit and the Transferee to effectuate any such
transfer, including, without limitation, supplying information
regarding the Property, providing all appropriate consents
required under applicable California law and otherwise assisting
Summit in any reasonable manner to effectuate such transfer of
the Property. Notwithstanding the foregoing, Borrower shall not
be required to incur any material costs or expenses in connection
with a transfer of the Property; provided, however, it is the
intent and agreement of the parties that (A) Borrower shall be
obligated to effectuate transfer of the Property as and when
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required under the terms of this Agreement even if such transfer
results in cost, expense or liability to such Borrowers and any
provision herein with respect to actions being taken "at no
material cost or expense" is limited to an alternative action (an
"Alternative Action") requested by Summit which could be
accomplished in a less costly manner by Borrower while still
accomplishing the intent and requirements of this Agreement and
(B) Borrower shall be required to perform such Alternative Action
if and to the extent the costs and expenses thereof are
reimbursed by cash flow from the Property and not by Xxxxxxx, the
Corporation or any of their respective affiliates.
(d) The parties hereto agree that, notwithstanding
Transferee's acquisition of the Property, the indebtedness
evidenced by the Loan Documents shall not be cancelled and all of
the Loan Documents shall remain in full force and effect after
the transaction contemplated by this Agreement has been consum-
mated but Borrower shall have no further liability therefor. The
parties hereto further agree that the Transferee's interest in
the Property after its acquisition thereof shall not merge with
the interest of Summit in the Property under the Loan Documents.
It is the express intention of each of the parties hereto (and
all of the conveyances provided for in this Agreement shall so
recite) that such interest of Summit in the Property shall not
merge, but be and remain at all times separate and distinct,
notwithstanding any union of said interest in Summit at any time
by purchase, termination or otherwise and that the respective
liens of the Loan Documents on the Property shall be and remains
at all times a valid and continuous liens on the Property.
(e) The agreements by Summit to forbear from declaring
the obligations of Borrower under the Loan Documents to be
immediately due and payable and from demanding payment thereof in
the manner set forth herein shall in no event or under any
circumstance be construed as a waiver by Summit, in whole or in
part, of the existing events of default under the Loan Documents.
(f) Notwithstanding anything contained herein to the
contrary, Borrower shall have and shall retain, through and
including the date of any transfer of the Property by means of a
Foreclosure or a Title Transfer, the right to bring current the
Property by paying to Summit the full amount of all principal,
interest (including, without limitation, Base Interest (as
defined in the Loan Documents), accrued interest, deferred
interest, contingent interest and any other type or kind of
interest payable under the Loan Documents), fees, costs and
expenses of Summit and any other amounts payable under the Loan
Documents, which principal, interest, fees, costs and expenses of
Summit and other amounts shall be deemed to be due and payable in
full, without any offsets or counterclaims of any kind, at such
time.
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4. Management of the Property.
(a) Simultaneously with the execution of this
Agreement, (i) CTL Management shall be terminated as the property
manager and leasing agent for the Property, and (ii) New Manager
shall replace CTL Management as the sole managing and leasing
agent for the Property pursuant to the Management Agreement; it
hereby being understood and agreed that CTL Management has and
shall have no claim or recourse of any nature against Summit (or
any nominees, assignees or designees of Summit) or Property
arising from or resulting from the termination of CTL Management
as managing and leasing agent for Property or for any other
reason, and CTL Management is a signatory to this Agreement for
the purpose of effectuating this understanding. Borrower agrees
not to terminate, replace or attempt to replace New Manager as
the sole managing and leasing agent of the Property without the
prior written consent of Summit.
(b) Borrower and New Manager shall each procure and
maintain the casualty and liability insurance required to be
procured and maintained under the Loan Documents and the
Management Agreement, as the case may be, and each party shall
cause the other party to be a named additional insured on such
insurance policy, it being the intent of the parties that all
parties be fully protected from liability with respect to the
Property to the extent of such insurance coverage. The costs of
such insurance to be procured and maintained by Borrower and New
Manager hereunder shall be paid from funds in the Cash Collateral
Disbursement Account (as such term is defined in the Management
Agreement).
5. Intentionally Deleted.
6. Forbearance. During the period (the "Forbearance
Period") commencing with the date of execution of this Agreement
through and including the earlier of January 30, 1997 and the
date a Forbearance Termination Event occurs, Base Interest (as
defined in the Indenture) and all other interest accrued and
payable shall continue to accrue on the outstanding principal
balance of the Loan in accordance with the Loan Documents. In
lieu of making the payments required under the Loan Documents,
all Excess Cash Collateral (as such term is defined in the
Management Agreement) shall be applied on a monthly basis first
to the payment of Base Interest for that month, and the balance,
if any, shall thereafter be applied in accordance with the
provisions of the Indenture, the Note, the Loan Agreement and the
other Loan Documents. Any amounts of unpaid interest outstanding
on the principal balance of the Loan at any time and from time to
time shall themselves bear interest and be payable at the rates
and in the manner set forth in Section 3.06 of the Indenture and
Section 3.2 of the Loan Agreement.
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7. Conditions to Effectiveness of Agreement. The
provisions of this Agreement shall not become effective unless
and until each and every one of the conditions set forth below
shall have been satisfied:
(a) The Corporation shall have executed,
acknowledged and delivered the Vanishing Guaranty to
Summit;
(b) The general partner and each limited partner
in Borrower shall have given and delivered,
irrevocably, its written consent to this Agreement and
the transactions contemplated hereunder and in
connection herewith;
(c) Borrower shall have delivered to Summit (i) all
cash in its various accounts and (ii) the agreed upon amount
representing a portion of all security deposits;
(d) The Corporation's counsel shall have delivered an
opinion of counsel with respect to power and authority, due
authorization, due execution, and due authority, with
respect to the Guaranty and the grantor thereunder in form
and substance acceptable to Summit;
(e) The Management Agreement and the Initial Release
(defined below) shall have been executed, acknowledged and
delivered by all parties thereto; and
(f) All material conditions precedent to the
effectiveness of the Other Forbearance Agreement and the
Settlement Agreement shall have been satisfied or waived in
writing.
8. Releases.
Concurrently with the execution and delivery of this
Agreement, Borrower shall deliver to Summit the initial release
in a form satisfactory to Summit (the "Initial Release").
Immediately following the closing of a transfer of the Property
pursuant to this Agreement, (i) Borrower shall execute and
deliver to Summit the Summit Final Release in the form of Exhibit
E-1; and (ii) provided a Forbearance Termination Event resulting
in actual damage to Summit or its affiliates shall not have
occurred and not cured, Summit shall execute and deliver to
Borrower the Desert Hills Release in the form of Exhibit E-2
annexed hereto.
9. Borrowers' Professional Fees. Borrower and
Xxxxxxx personally shall each be jointly and severally
responsible for and liable for the payment of all professional
fees, costs, and expenses (including, without limitation,
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attorneys' fees) incurred by or otherwise accrued against
Borrower in connection with this Agreement and the transactions
contemplated herein or relating thereto; provided, however, that
Xxxxxxx shall not be personally responsible for the payment of
the professional fees, costs and expenses of Summit.
Notwithstanding the foregoing, (i) Summit shall be entitled to
reimburse itself out of the Desert Hills Lockbox Account for all
costs, including attorneys fees and expenses, and other
professional fees, costs and expenses incurred by Summit in
connection with the transactions contemplated by this Agreement
out of any amounts disbursed to Summit in accordance with the
provisions of the Cash Management Agreement and (ii) a portion of
Borrower's legal fees and other costs and expenses in connection
with the transactions contemplated hereby in the amount of $5,000
have been paid from the cash flow of the Property; and any fees
and expenses in excess of such amount shall be paid by Xxxxxxx
from a source other than the cash flow of the Property.
10. Assignment. Upon prior (or simultaneous) written
notice to Borrower, Summit may sell or assign, in whole or in
part, its interest in the Loan, subject to the terms and
provisions of this Agreement.
11. Notices. Any notice, request or demand given or
made under this Agreement shall be in writing and shall be hand
delivered or sent by Federal Express or other reputable courier
service, and shall be deemed given when received at the following
addresses whether hand delivered or sent by Federal Express or
other reputable national overnight courier service:
If to Summit:
Summit Tax Exempt X.X. XX
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Mr. Xxxxx Xxxxx
With a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
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If to Borrower:
Desert Hills--264, Ltd.
c/x Xxxxxxx Realty Corp.
0000 XX Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Attention: Xx. Xxx Xxxx
With a copy to:
O'Melveny & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to Xxxxxxx:
Xx. Xxxxxx X. Xxxxxxx
c/x Xxxxxxx Realty Corp.
0000 XX Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
If to the Corporation:
Xxxxxxx Realty Corp.
0000 XX Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
If to CTL Management
CTL Management, Inc.
0000 XX Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Each party to this Agreement may designate a change of address by
notice given to the other party fifteen (15) days prior to the
date such change of address is to become effective.
12. Loan Documents Remain Binding. Borrower
acknowledges that all of the obligations to be performed by
Borrower under the Loan Documents are valid and shall continue in
full force and effect notwithstanding the execution of this
Agreement, except to the extent expressly stated herein to the
contrary. Borrower acknowledges that the Loan Documents are and
shall at all times continue to be absolute and unconditional in
all respects, and shall at all times be valid and enforceable
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irrespective of any other agreements or circumstances of any
nature whatsoever which might otherwise constitute a defense to
the Loan Documents, the obligations of Borrower under the Loan
Documents, the obligations of any other person or party relating
to the Loan Documents, or the obligations of Borrower hereunder
or otherwise with respect to the Loan Documents. The agreement
by Summit to forbear from exercising any of its rights and
remedies under the Loan Documents in accordance with the
provisions of this Agreement shall in no event or under any
circumstance be construed as a waiver by Summit in whole or in
part of any existing default with respect to the Loan Documents,
or of the absolute and unconditional right of Summit, from and
after the occurrence of a Forbearance Termination Event (and
expiration of all applicable grace, cure and notice periods)
hereunder or under the Other Forbearance Agreement, to seek to
enforce its rights and remedies with respect to the Loan in
accordance with the Loan Documents; provided, however, Summit
agrees that it shall not commence a foreclosure action against
Borrower, Corporation or Xxxxxxx with respect to the Desert Hills
Property prior to or after recording the Desert Hills Deed if the
Transfer Documents are unconditionally delivered to Summit, or
its nominee, designee or affiliate, within fifteen (15) days of
demand after the occurrence of a Forbearance Termination Event
therefrom by Summit. Borrower absolutely, unconditionally and
irrevocably waives any and all right to assert any setoff,
counterclaim (except for a compulsory counterclaim in a court of
federal jurisdiction) or crossclaim of any nature whatsoever
(i) with respect to the Loan Documents and the documents
contemplated hereby and executed and delivered in connection
herewith, or (ii) with respect to the obligations of Borrower
under the Loan Documents and the documents contemplated hereby
and executed and delivered in connection herewith, or (iii) with
respect to the obligations of any other person or party relating
to the Loan Documents and the documents contemplated hereby and
executed and delivered in connection herewith, or (iv) otherwise
with respect to the Loan or (v) in any action or proceeding
brought by Summit to collect the sums due under the Loan
Documents and the documents contemplated hereby and executed and
delivered in connection herewith, or any portion thereof, or to
enforce, foreclose and realize upon the liens and security
interests created by the Deed of Trust, the other Loan Documents
and the documents contemplated hereby and executed and delivered
in connection herewith. Borrower acknowledges that no oral or
other agreements, understandings, representations or warranties
exist with respect to the Loan Documents or with respect to the
obligations of Borrower under the Loan Documents, except those
specifically set forth in the documents contemplated hereby and
executed and delivered in connection herewith; provided, however,
that where the terms and conditions of the Loan Documents
conflict with the terms and conditions of this Agreement and the
Forbearance Documents, then the terms and conditions of the
Forbearance Documents shall control.
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13. Not a Novation. This Agreement, together with the
other Forbearance Documents is not intended to and shall not
terminate or extinguish any of the indebtedness or obligations
under the Loan Documents in such a manner as would constitute a
novation of the original indebtedness or obligations under the
Loan Documents, nor shall this Agreement affect or impair the
priority of any liens created thereby, it being the intention of
the parties hereto to carry forward all liens and security
interests securing payment of the Note.
14. Further Assurances. Borrower shall execute and
deliver or cause to be executed and delivered such assignments,
agreements, partnership authorization and other documentation as
Summit shall require to create, evidence and assure the
agreements herein contained and the rights conferred upon the
parties hereby, at no additional cost to any of them and without
the incurrence of any additional obligations or liabilities by
any of them.
15. Time of the Essence. Time shall be of the essence
with respect to the payment and performance of the obligations of
each of the Borrowers to be paid and performed hereunder and with
respect to all dates and deadlines set forth herein (whether or
not specifically so indicated) including, without limitation, the
dates specified in the defined term "Forbearance Termination
Event".
16. WAIVER OF TRIAL BY JURY. EACH BORROWER
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN
CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THE LOAN
DOCUMENTS, THIS AGREEMENT OR ANY OTHER DOCUMENT OR INSTRUMENT NOW
OR HEREAFTER EXECUTED AND DELIVERED IN CONNECTION THEREWITH.
17. Agreement Binding. This Agreement and all the
covenants and agreements herein contained, shall be and are
binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, legal
representatives, successors and assigns except as expressly set
forth herein.
18. Construction of Agreement. The titles and
headings of the paragraphs of this Agreement have been inserted
for convenience of reference only and are not intended to
summarize or otherwise describe the subject matter of such
paragraphs and shall not be given any consideration in the
construction of this Agreement.
19. Waivers. Summit may at any time and from time to
time waive any one or more of the conditions contained herein,
but any such waiver shall be deemed to be made in pursuance
hereof and not in modification thereof, and any such waiver in
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any instance or under any particular circumstance shall not be
considered a waiver of such condition in any other instance or
any other circumstance.
20. Severability. If any term, covenant or provision
of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be construed
without such term, covenant or provision.
21. No Beneficiary. No person, party or entity other
than Summit Fund shall under any circumstances have the right to
assert that it is a third party beneficiary of this Agreement.
22. Counterparts. It is understood and agreed that
this Agreement may be executed in telecopied or original
counterparts, each of which shall, for all purposes, be deemed an
original and all of such counterparts, taken together, shall
constitute one and the same Agreement, event though all of the
parties hereto may not have executed the same counterpart of this
Agreement.
23. Entire Agreement. The Loan Documents and the
documents contemplated hereby and executed and delivered in
connection herewith set forth the entire agreement and
understanding of Borrower, Xxxxxxx, the Corporation, CTL
Management and Summit with respect to the matters set forth
herein.
24. Modifications. This Agreement may only be
modified, amended, changed, discharged or terminated by an
agreement in writing signed by all of the parties to this
Agreement.
25. Full Authority. Each of the parties to this
Agreement (and the undersigned representatives of such parties,
if any) has the full power and authority and legal right to
execute this Agreement and to keep and observe all of the terms,
covenants and provisions of this Agreement on the respective
parts of such parties to be performed or observed.
26. No Third Party Liability. Borrower acknowledges
and agrees that the mechanism established in this Agreement for
the transfer of the Property, and the participation of Summit in
the process, is a legitimate and reasonable exercise of Summit's
rights and remedies as the principal secured creditor of
Borrower. Summit's participation in this process (and pursuant
to this Agreement) is as a secured creditor, and not as a co-
owner, partner, joint venturer, operator, insider, control
entity, employer in fact or law, or any other equity participant
with Borrower. As such, Summit shall have no liability to any
third party as co-owner, partner, joint venturer, operator,
insider, control entity, employer in fact or law, or any other
-15-
equity participant for exercising its rights under this Agreement
as regards any of the Properties.
27. Choice of Law. This Agreement shall be governed
and construed in accordance with the internal laws of the State
of California.
28. Advice of Counsel. Each of Borrower, Xxxxxxx, the
Corporation, CTL Management and Summit acknowledges that it (i)
has had the opportunity to obtain advice of counsel of its own
choosing in the negotiations for and preparation of this
Agreement; (ii) has read the Agreement and has had the Agreement
fully explained by such counsel, and is fully aware of its
contents and legal effects; (iii) has entered into this Agreement
of its own free will and accord and without threats, coercion,
fraud or duress of any kind and (iv) is not relying on any
representation, statement or warranty of any party regarding this
Agreement or the transactions contemplated hereby, except as set
forth in this Agreement.
29. Conveyance. Borrower agrees that the conveyance
of the Property to Summit or its assignee, designee or nominee
according to the terms of this Agreement is and shall be an
absolute conveyance of all of its right, title and interest in
and to the Property in fact as well as form and was not and is
not now and shall not be intended as a mortgage, trust convey-
ance, deed of trust or security instrument of any kind, and that
the consideration for such conveyance is as exactly as recited
herein and that, following delivery of the Transfer Documents,
Borrower shall have no further interest (including right of
redemption) or claims in and to the Property or to the proceeds
and profits which may be derived thereof, of any kind whatsoever.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK;
THE SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
DESERT HILLS--264, LTD.,
an Oregon limited partnership,
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
Xxxxxxx Realty Corp.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
CTL MANAGEMENT
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
SUMMIT TAX EXEMPT X.X. XX, a
Delaware limited partnership
By: Related Tax Exempt Bond
Associates, Inc., a general
partner
By: /s/ Xxxxxx Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx
Title: Vice-President
By: Prudential-Bache Properties,
Inc., a general partner
By: /s/ Xxxxxx X. Xxxxx, III
---------------------------
Name: Xxxxxx X. Xxxxx, III
Title: President
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The undersigned, being all of the limited partners of
Desert Hills --264, Ltd., an Oregon limited partnership (the
"Partnership") hereby consent to the execution by the Partnership
of this Agreement and the completion of the transactions contem-
plated hereby.
PACIFIC FRONTIER WOOD MARKETS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
CSL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
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Acknowledgments
(To Be Attached)
-1-
EXHIBIT A
(Description of Property)
(To Be Attached)
-2-
EXHIBIT A-1
(Description of Desert Terrace Property)
-3-
EXHIBIT B
(Vanishing Guaranty)
(To Be Attached)
-4-
EXHIBIT C
(Form of Desert Hills Deed)
(grant deed)
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EXHIBIT D
(Management Agreement)
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EXHIBIT E
(Form of Summit Final Release)
EXHIBIT E-1
(Form of Desert Hills Release)
--------------------------------------------------------
SETTLEMENT AND FORBEARANCE AGREEMENT
among
DESERT HILLS - 264, LTD.,
XXXXXXX REALTY CORP.,
XXXXXX X. XXXXXXX,
CTL MANAGEMENT
and
SUMMIT TAX EXEMPT X.X. XX
Dated as of July 31, 1995
Premises:
SUNSET DOWNS APARTMENTS
LOS ANGELES COUNTY, CALIFORNIA
--------------------------------------------------------
