SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT is made as of the 31st day of
July, 1995, by and among DESERT VALLEY--204, LTD., an Oregon
limited partnership having an office c/x Xxxxxxx Realty Corp.,
0000 XX Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000
("Desert Valley"), DESERT SANDS APTS.--148, LTD., an Oregon
limited partnership having an office c/x Xxxxxxx Realty Corp.,
0000 XX Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000
("Desert Sands"), XXXXXXXXX-148, LTD., an Oregon limited
partnership having an office c/x Xxxxxxx Realty Corp., 0000 XX
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000
("Xxxxxxxxx"), 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 II"),
SUMMIT TAX EXEMPT L.P. III, a Delaware limited partnership having
an office c/o Related Capital Company, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000 ("Summit III"), 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"). Desert Valley,
Desert Sands and Xxxxxxxxx may hereinafter be referred to,
individually, as a "Borrower" and, collectively, as the
"Borrowers". Summit II and Summit III may hereinafter be
referred to, individually, as a "Summit Entity" and,
collectively, as the "Summit Entities".
RECITALS:
A. Desert Valley 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 Village 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 "Desert Valley Property").
B. Pursuant to a certain Indenture of Trust (the
"Desert Valley Indenture") dated as of March 1, 1988 from
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 Village
Project) 1988 Series A (the "Desert Valley Bonds") in the
aggregate principal amount of $11,375,000, the proceeds of which
were used to fund a certain mortgage loan (the "Desert Valley
Loan"), in the original principal amount of $11,375,000, made by
Issuer as of March 1, 1988 to Desert Valley.
C. The Desert Valley Loan was made pursuant to a
certain Loan Agreement dated as of March 1, 1988 among Desert
Valley, Issuer and Trustee (the "Desert Valley Loan Agreement"),
is evidenced by a promissory note (the "Desert Valley Note")
executed by Desert Valley, and is secured by a Construction Trust
Deed, Security Agreement, Assignment of Rents and Fixture Filing
dated as of March 1, 1988 (the "Desert Valley Deed of Trust"),
covering the Desert Valley Property, and various other loan
documents described in the Desert Valley Loan Agreement
(collectively, the "Desert Valley Loan Documents"). Reference is
also made to a certain letter agreement dated July 10, 1992
between Desert Valley and Summit III, which letter agreement
hereby constitutes one of the Desert Valley Loan Documents.
D. Pursuant to the Desert Valley Indenture, and with
the consent of Desert Valley, the Desert Valley Loan Agreement,
the Desert Valley Note, the Desert Valley Deed of Trust, certain
other documents and property and all payments to be made by
Desert Valley under the Desert Valley Loan Agreement (except
certain specified payments) were assigned by Issuer to the
Trustee as security for the Desert Valley Bonds.
E. All of the Desert Valley Bonds issued pursuant to
the Desert Valley Indenture are owned and held by Summit III.
F. In accordance with Section 7.02(a) of the Desert
Valley Indenture, as the single owner of the Desert Valley Bonds,
Summit III is the "Acting Party", and has the sole authority to
take actions in respect of any "Event of Default" under the
Desert Valley Indenture and has the right to exercise certain
remedies under the Desert Valley Loan Agreement.
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G. By letter dated as of May 18, 1995, Desert Valley
acknowledged and agreed that an "Event of Default" (as defined in
the Desert Valley Loan Documents has occurred under the Desert
Valley Loan Documents by reason of the failure of Desert Valley
to pay the full amount of Base Interest (as defined in the Desert
Valley Loan Documents) when due.
H. As a result of the default under the Desert Valley
Loan Documents, Summit III is entitled to declare the obligations
of Desert Valley under the Desert Valley Loan Documents to be
immediately due and payable.
I. Desert Valley has acknowledged that it will not be
able to make the payments due under the Desert Valley Note and
therefore will not be able to cure the existing defaults under
the Desert Valley Loan Documents.
J. Desert Valley has requested that Summit III
release Desert Valley from the obligation to repay the Desert
Valley Loan and from all other obligations arising under the
Desert Valley Loan Documents following the transfer of the Desert
Valley Property to Sunset Creek/Village Investors, Inc., a
Delaware corporation ("Sunset Creek"), a nominee, assignee or
designee of Summit III.
K. Summit III is willing to release Desert Valley
from the obligation to repay the Desert Valley Loan and from all
other obligations arising under the Desert Valley Loan Documents
following the transfer of the Desert Valley Property to Sunset
Creek, a nominee, assignee or designee of Summit III.
L. Desert Sands 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 Creek Apartments and are more particularly
described in Exhibit B attached hereto (such premises, together
with the improvements located thereon, are hereinafter referred
to as the "Desert Creek Property").
M. Pursuant to a certain Indenture of Trust (the
"Desert Sands Indenture") dated as of March 1, 1988 from Issuer
to Trustee, pursuant to which Issuer issued certain Multifamily
Housing Revenue Refunding Bonds (Sunset Creek Project) 1988
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Series B (the "Desert Sands Bonds") in the aggregate principal
amount of $8,275,000, the proceeds of which were used to fund a
certain mortgage loan (the "Desert Sands Loan"), in the original
principal amount of $8,275,000, made by Issuer as of March 1,
1988 to Desert Sands.
N. The Desert Sands Loan was made pursuant to a
certain Loan Agreement dated as of March 1, 1988 among Desert
Sands, Issuer and Trustee (the "Desert Sands Loan Agreement"), is
evidenced by a promissory note (the "Desert Sands Note") executed
by Desert Sands, and is secured by a Construction Trust Deed,
Security Agreement, Assignment of Rents and Fixture Filing dated
as of March 1, 1988 (the "Desert Sands Deed of Trust"), covering
the Desert Sands Property, and various other loan documents
described in the Desert Sands Loan Agreement (collectively, the
"Desert Sands Loan Documents"). Reference is also made to a
certain letter agreement dated July 10, 1992 between Desert Sands
and Summit III, which letter agreement hereby constitutes one of
the Desert Sands Loan Documents.
O. Pursuant to the Desert Sands Indenture, and with
the consent of Desert Sands, the Desert Sands Loan Agreement, the
Desert Sands Note, the Desert Sands Deed of Trust, certain other
documents and property and all payments to be made by Desert
Sands under the Desert Sands Loan Agreement (except certain
specified payments) were assigned by Issuer to the Trustee as
security for the Desert Sands Bonds.
P. All of the Desert Sands Bonds issued pursuant to
the Desert Sands Indenture are owned and held by Summit III.
Q. In accordance with Section 7.02(a) of the Desert
Sands Indenture, as the single owner of the Desert Sands Bonds,
Summit III is the "Acting Party", and has the sole authority to
take actions in respect of any "Event of Default" under the
Desert Sands Indenture and has the right to exercise certain
remedies under the Desert Sands Loan Agreement.
R. By letter dated as of May 18, 1995, Desert Sands
acknowledged and agreed that an "Event of Default" (as defined in
the Desert Sands Loan Documents has occurred under the Desert
Sands Loan Documents by reason of the failure of Desert Sands to
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pay the full amount of Base Interest (as defined in the Desert
Sands Loan Documents) when due.
S. As a result of the default under the Desert Sands
Loan Documents, Summit III is entitled to declare the obligations
of Desert Sands under the Desert Sands Loan Documents to be
immediately due and payable.
T. Desert Sands has acknowledged that it will not be
able to make the payments due under the Desert Sands Note and
therefore will not be able to cure the existing defaults under
the Desert Sands Loan Documents.
U. Desert Sands has requested that Summit III release
Desert Sands from the obligation to repay the Desert Sands Loan
and from all other obligations arising under the Desert Sands
Loan Documents following the transfer of the Desert Sands
Property to Sunset Creek, a nominee, assignee or designee of
Summit III.
V. Summit III is willing to release Desert Sands from
the obligation to repay the Desert Sands Loan and from all other
obligations arising under the Desert Sands Loan Documents
following the transfer of the Desert Sands Property to Sunset
Creek, a nominee, assignee or designee of Summit III.
X. Xxxxxxxxx is the owner and holder of fee title in
certain premises located in the City of Pittsburg, County of
Contra Costa, State of California, which premises are commonly
known as Xxxxxxxxx Terrace Apartments and are more particularly
described in Exhibit C attached hereto (such premises, together
with the improvements located thereon, are hereinafter referred
to as the "Xxxxxxxxx Property", and together with the Desert
Valley Property and the Desert Sands Property, the "Properties").
X. Pursuant to a certain Indenture of Trust (the
"Xxxxxxxxx Indenture") dated as of November 1, 1986 from the
Redevelopment Agency of the City of Pittsburg ("Xxxxxxxxx
Issuer") to Trustee, pursuant to which Xxxxxxxxx Issuer issued
certain Multifamily Housing Revenue Bonds (Xxxxxxxxx Apartments
Project) 1986 (the "Xxxxxxxxx Bonds") in the aggregate principal
amount of $8,550,000, the proceeds of which were used to fund a
certain mortgage loan (the "Xxxxxxxxx Loan", and together with
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the Desert Valley Loan and the Desert Sands Loan, the "Loans"),
in the original principal amount of $8,550,000, made by Xxxxxxxxx
Issuer as of November 1, 1986 to Xxxxxxxxx.
Y. The Xxxxxxxxx Loan was made pursuant to a certain
Loan Agreement dated as of November 1, 1986 among Xxxxxxxxx,
Xxxxxxxxx Issuer and Trustee (the "Xxxxxxxxx Loan Agreement"), is
evidenced by a promissory note (the "Xxxxxxxxx Note") executed by
Xxxxxxxxx, and is secured by a Construction Trust Deed, Security
Agreement, Assignment of Rents and Fixture Filing dated as of
November 1, 1986 (the "Xxxxxxxxx Deed of Trust"), covering the
Xxxxxxxxx Property, and various other loan documents described in
the Xxxxxxxxx Loan Agreement (collectively, the "Xxxxxxxxx Loan
Documents", and together with the Desert Valley Loan Documents
and the Desert Sands Loan Documents, the "Loan Documents").
Z. Pursuant to the Xxxxxxxxx Indenture, and with the
consent of Xxxxxxxxx, the Xxxxxxxxx Loan Agreement, the Xxxxxxxxx
Note, the Xxxxxxxxx Deed of Trust, certain other documents and
property and all payments to be made by Xxxxxxxxx under the
Xxxxxxxxx Loan Agreement (except certain specified payments) were
assigned by Xxxxxxxxx Issuer to the Trustee as security for the
Xxxxxxxxx Bonds.
AA. All of the Xxxxxxxxx Bonds issued pursuant to the
Xxxxxxxxx Indenture are owned and held by Summit II.
AB. In accordance with Section 7.02(a) of the
Xxxxxxxxx Indenture, as the single owner of the Xxxxxxxxx Bonds,
Summit II is the "Acting Party", and has the sole authority to
take actions in respect of any "Event of Default" under the
Xxxxxxxxx Indenture and has the right to exercise certain
remedies under the Xxxxxxxxx Loan Agreement.
AC. By letter dated as of May 18, 1995, Xxxxxxxxx
acknowledged and agreed that an "Event of Default" (as defined in
the Xxxxxxxxx Loan Documents has occurred under the Xxxxxxxxx
Loan Documents by reason of the failure of Xxxxxxxxx to pay the
full amount of Base Interest (as defined in the Xxxxxxxxx Loan
Documents) when due.
AD. As a result of the default under the Xxxxxxxxx
Loan Documents, Summit II is entitled to declare the obligations
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of Xxxxxxxxx under the Xxxxxxxxx Loan Documents to be immediately
due and payable.
AE. Xxxxxxxxx has acknowledged that it will not be
able to make the payments due under the Xxxxxxxxx Note and
therefore will not be able to cure the existing defaults under
the Xxxxxxxxx Loan Documents.
AF. Xxxxxxxxx has requested that Summit II release
Xxxxxxxxx from the obligation to repay the Xxxxxxxxx Loan and
from all other obligations arising under the Xxxxxxxxx Loan
Documents following the transfer of the Xxxxxxxxx Property to
Xxxxxxxxx Project Investors, Inc., a Delaware Corporation
("Xxxxxxxxx Investors"), a nominee, assignee or designee of
Summit II.
AG. Summit II is willing to release Xxxxxxxxx from the
obligation to repay the Xxxxxxxxx Loan and from all other
obligations arising under the Xxxxxxxxx Loan Documents following
the transfer of the Xxxxxxxxx Property to Xxxxxxxxx Investors, a
nominee, assignee or designee of Summit II.
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 Borrowers, Corporation and
Xxxxxxx. (a) Each of Desert Valley, the Corporation and Xxxxxxx
acknowledges that:
(i) the Desert Valley Loan Documents are in full force
and effect and are valid and enforceable in accordance with
their terms against Desert Valley;
(ii) pursuant to the Desert Valley Loan Documents,
Summit III has a valid and perfected first lien and security
interest in and to the Desert Valley Property and the other
property secured under the Desert Valley Deed of Trust, the
Desert Valley Indenture and the other Desert Valley Loan
Documents;
(iii) pursuant to the Desert Valley Loan Documents,
Summit III has a first priority, fully perfected security
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interest in all rents, issues, profits, rent equivalent
income, hotel receipts, security deposits and any other
revenues, income or proceeds of any nature whatsoever
generated by, arising from or otherwise related to the
Desert Valley Property and any other payments covered by any
assignment of rents that has been executed and delivered by
Desert Valley to Summit III as security for its obligations
under the Desert Valley Loan Documents (collectively,
"Desert Valley Rents");
(iv) an event of default has occurred under the terms
of the Desert Valley Loan Documents, and Desert Valley is
unable to cure such event of default;
(v) each of Summit III and Issuer has fully complied
with its obligations under the Desert Valley Loan Documents,
and Desert Valley does not have any defenses, offsets or
claims of any kind or nature with respect to Desert Valley's
obligations under the Desert Valley Loan Documents which
would in any manner limit, diminish or eliminate any of the
rights or remedies of Summit III or Issuer under the Desert
Valley 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.
Desert Valley, based on the above acknowledgments, hereby waives
(x) any and all rights to receive any notice of default under the
Desert Valley Note, the Desert Valley Deed of Trust or the other
Desert Valley Loan Documents relating to the Desert Valley Loan
with respect to any events of default currently existing or
hereinafter arising under the Desert Valley Loan Documents, and
(y) any and all rights to cure such events of default.
(b) Each of Desert Sands, the Corporation and Xxxxxxx
acknowledges that:
(i) the Desert Sands Loan Documents are in full force
and effect and are valid and enforceable in accordance with
their terms against Desert Sands;
(ii) pursuant to the Desert Sands Loan Documents,
Summit III has a valid and perfected first lien and security
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interest in and to the Desert Sands Property and the other
property secured under the Desert Sands Deed of Trust, the
Desert Sands Indenture and the other Desert Sands Loan
Documents;
(iii) pursuant to the Desert Sands Loan Documents,
Summit III has a first priority, fully perfected security
interest in all rents, issues, profits, rent equivalent
income, hotel receipts, security deposits and any other
revenues, income or proceeds of any nature whatsoever
generated by, arising from or otherwise related to the
Desert Sands Property and any other payments covered by any
assignment of rents that has been executed and delivered by
Desert Sands to Summit III as security for its obligations
under the Desert Sands Loan Documents (collectively, "Desert
Sands Rents");
(iv) an event of default has occurred under the terms
of the Desert Sands Loan Documents, and Desert Sands is
unable to cure such event of default;
(v) each of Summit III and Issuer has fully complied
with its obligations under the Desert Sands Loan Documents,
and Desert Sands does not have any defenses, offsets or
claims of any kind or nature with respect to Desert Sands'
obligations under the Desert Sands Loan Documents which
would in any manner limit, diminish or eliminate any of the
rights or remedies of Summit III or Issuer under the Desert
Sands 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.
Desert Sands, based on the above acknowledgments, hereby waives
(x) any and all rights to receive any notice of default under the
Desert Sands Note, the Desert Sands Deed of Trust or the other
Desert Sands Loan Documents relating to the Desert Sands Loan
with respect to any events of default currently existing or
hereinafter arising under the Desert Sands Loan Documents, and
(y) any and all rights to cure such events of default.
(c) Each of Xxxxxxxxx, the Corporation and Xxxxxxx
acknowledges that:
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(i) the Xxxxxxxxx Loan Documents are in full force and
effect and are valid and enforceable in accordance with
their terms against Xxxxxxxxx;
(ii) pursuant to the Xxxxxxxxx Loan Documents, Summit
II has a valid and perfected first lien and security
interest in and to the Xxxxxxxxx Property and the other
property secured under the Xxxxxxxxx Deed of Trust, the
Xxxxxxxxx Indenture and the other Xxxxxxxxx Loan Documents;
(iii) pursuant to the Xxxxxxxxx Loan Documents, Summit
II has a first priority, fully perfected security interest
in all rents, issues, profits, rent equivalent income, hotel
receipts, security deposits and any other revenues, income
or proceeds of any nature whatsoever generated by, arising
from or otherwise related to the Xxxxxxxxx Property and any
other payments covered by any assignment of rents that has
been executed and delivered by Xxxxxxxxx to Summit II as
security for its obligations under the Xxxxxxxxx Loan
Documents (collectively, "Xxxxxxxxx Rents");
(iv) an event of default has occurred under the terms
of the Xxxxxxxxx Loan Documents, and Xxxxxxxxx is unable to
cure such event of default;
(v) each of Summit II and Xxxxxxxxx Issuer has fully
complied with its obligations under the Xxxxxxxxx Loan
Documents, and Xxxxxxxxx does not have any defenses, offsets
or claims of any kind or nature with respect to Xxxxxxxxx'x
obligations under the Xxxxxxxxx Loan Documents which would
in any manner limit, diminish or eliminate any of the rights
or remedies of Summit II or Xxxxxxxxx Issuer under the
Xxxxxxxxx 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.
Xxxxxxxxx, based on the above acknowledgments, hereby waives (x)
any and all rights to receive any notice of default under the
Xxxxxxxxx Note, the Xxxxxxxxx Deed of Trust or the other
Xxxxxxxxx Loan Documents relating to the Xxxxxxxxx Loan with
respect to any events of default currently existing or
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hereinafter arising under the Xxxxxxxxx Loan Documents, and (y)
any and all rights to cure such events of default.
2. Transfer of the Desert Valley Property, the Desert
Sands Property and the Xxxxxxxxx Property (collectively, the
"1995 Properties").
(a) Transfer of Desert Valley Property. Desert Valley
acknowledges and agrees that Summit III has the absolute and
unconditional right to declare the Desert Valley Loan immediately
due and payable as a result of the occurrence of a default under
the Desert Valley Loan Documents, and that no such right or
remedy, and no such default, has been waived in any respect by
Summit III. Desert Valley acknowledges and agrees that Summit
III is required to seek to enforce the rights and remedies of
Summit III and Issuer under the Desert Valley Loan Documents in
order to protect its interests in the Desert Valley Property. In
order to induce Summit III not to accelerate the Desert Valley
Loan and pursue the remedies available to it and Issuer against
Desert Valley under the Desert Valley Loan Documents, or under
any other applicable law, rule or regulation (or in equity),
Desert Valley has simultaneously with the execution and delivery
of this Agreement transferred to Sunset Creek, a nominee,
assignee or designee of Summit III, all right, title and interest
of Desert Valley in the Desert Valley Property, subject to the
Desert Valley Note, the Desert Valley Deed of Trust and the other
Desert Valley Loan Documents, by executing and delivering to
Sunset Creek a grant deed (the "Desert Valley Deed") and certain
other transfer documents (the "Desert Valley Transfer
Documents"); it hereby being understood and agreed that the
provisions of this Agreement shall have no force or effect unless
and until the Desert Valley Deed has been properly recorded in
the appropriate recording office.
(b) Transfer of Desert Sands Property. Desert Sands
acknowledges and agrees that Summit III has the absolute and
unconditional right to declare the Desert Sands Loan immediately
due and payable as a result of the occurrence of a default under
the Desert Sands Loan Documents, and that no such right or
remedy, and no such default, has been waived in any respect by
Summit III. Desert Sands acknowledges and agrees that Summit III
is required to seek to enforce the rights and remedies of Summit
III and Issuer under the Desert Sands Loan Documents in order to
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protect its interests in the Desert Sands Property. In order to
induce Summit III not to accelerate the Desert Sands Loan and
pursue the remedies available to it and Issuer against Desert
Sands under the Desert Sands Loan Documents, or under any other
applicable law, rule or regulation (or in equity), Desert Sands
has simultaneously with the execution and delivery of this
Agreement transferred to Sunset Creek, a nominee, assignee or
designee of Summit III, all right, title and interest of Desert
Sands in the Desert Sands Property, subject to the Desert Sands
Note, the Desert Sands Deed of Trust and the other Desert Sands
Loan Documents, by executing and delivering to Sunset Creek a
grant deed (the "Desert Sands Deed" and certain other transfer
documents (the "Desert Sands Transfer Documents"); it hereby
being understood and agreed that the provisions of this Agreement
shall have no force or effect unless and until the Desert Sands
Deed has been properly recorded in the appropriate recording
office.
(c) Transfer of Xxxxxxxxx Property. Xxxxxxxxx
acknowledges and agrees that Summit II has the absolute and
unconditional right to declare the Xxxxxxxxx Loan immediately due
and payable as a result of the occurrence of a default under the
Xxxxxxxxx Loan Documents, and that no such right or remedy, and
no such default, has been waived in any respect by Summit II.
Xxxxxxxxx acknowledges and agrees that Summit II is required to
seek to enforce the rights and remedies of Summit II and
Xxxxxxxxx Issuer under the Xxxxxxxxx Loan Documents in order to
protect its interests in the Xxxxxxxxx Property. In order to
induce Summit II not to accelerate the Xxxxxxxxx Loan and pursue
the remedies available to it and Xxxxxxxxx Issuer against
Xxxxxxxxx under the Xxxxxxxxx Loan Documents, or under any other
applicable law, rule or regulation (or in equity), Xxxxxxxxx has
simultaneously with the execution and delivery of this Agreement
transferred to Xxxxxxxxx Investors, a nominee, assignee or
designee of Summit II, all right, title and interest of Xxxxxxxxx
in the Xxxxxxxxx Property, subject to the Xxxxxxxxx Note, the
Xxxxxxxxx Deed of Trust and the other Xxxxxxxxx Loan Documents,
by executing and delivering to Xxxxxxxxx Investors the grant deed
(the "Xxxxxxxxx Deed") and certain other transfer documents (the
"Xxxxxxxxx Transfer Documents"); it hereby being understood and
agreed that the provisions of this Agreement shall have no force
or effect unless and until the Xxxxxxxxx Deed has been properly
recorded in the appropriate recording office.
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(d) The parties hereto agree that, notwithstanding the
Summit Entities' or their respective designee's acquisition of
the Properties, 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 consummated but the Borrowers shall have
no further liability therefor. The parties hereto further agree
that the interest of the Summit Entities or their respective
designee in the Properties after the Summit Entities or their
respective assignee's, designee's or nominee's acquisition of the
Properties, shall not merge with the interest of the Summit
Entities in the Properties 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 the Summit Entities in the Properties shall not
merge, but be and remain at all times separate and distinct,
notwithstanding any union of said interest in the Summit Entities
at any time by purchase, termination or otherwise and that the
respective liens of the Loan Documents on the Properties shall be
and remains at all times a valid and continuous liens on the
Properties.
(e) Transfer Taxes/Borrowers' Expenses.
Notwithstanding anything contained herein, each of Desert Valley,
Desert Sands and Xxxxxxxxx shall be solely responsible for the
payment of any and all real estate transfer taxes or transfer
gains taxes that may be imposed, assessed or collected in
connection with the transfer of the Desert Valley Property, the
Desert Sands Property or the Xxxxxxxxx Property, respectively,
and the transfer and recordation of the Desert Valley Deed, the
Desert Sands Deed or the Xxxxxxxxx Deed, respectively, it hereby
being understood and agreed that such fees, costs and expenses
shall be paid from a source other than the cash flow of the
Desert Valley Property, the Desert Sands Property or the
Xxxxxxxxx Property.
(f) Payment of Prior Expenses. As of the effective
date of this Agreement, each Summit Entity agrees to be
responsible for and pay, as, if and when due all reasonable
amounts due under any service contract which service contracts
are hereby being assumed by such Summit Entity with respect to
the applicable 1995 Property (a list of such service contracts
are annexed hereto as Schedule 1) but only to the extent such
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amounts (i) were incurred strictly in the ordinary course of
business by the applicable Borrower, (ii) were incurred, and were
first due and payable, on or after July 1, 1995, and (iii) would
otherwise be the obligation of, and be payable by, the Borrower
which previously owned such Property.
(g) Management of Properties. As of the effective
date of this Agreement: (i) all management and control of the
Properties shall be transferred to Related Management Company
("New Manager"), as the agent of Summit II (in the case of the
Xxxxxxxxx Property) and Summit III (in the case of the Desert
Valley Property and the Desert Sands Property) and (ii) CTL
Management shall resign, or be terminated, as the managing and
leasing agent for the Desert Valley Property, the Desert Sands
Property and the Xxxxxxxxx Property, it hereby being understood
and agreed that CTL Management shall have no claim or recourse of
any nature against the Desert Valley Property, the Desert Sands
Property, the Xxxxxxxxx Property, Summit II, Summit III or any
nominees, assignees or designees of Summit II or Summit III.
Simultaneously herewith, each of Desert Valley, Desert Sands,
Loveridge, and CTL Management shall transfer to New Manager all
cash and other funds arising from or relating to the Desert
Valley Property, the Desert Sands Property and the Xxxxxxxxx
Property, respectively, attributable to prior or current periods,
including, without limitation, all funds held by any of the
Borrowers or CTL (with respect to the Properties) in any
operating accounts, tax escrow accounts, insurance escrow
accounts, reserve accounts, or any other accounts of any type or
nature, and security deposits under leases in the aggregate
amount of $35,884.45.
(h) Further Assurances. Each of Desert Valley, Desert
Sands and Xxxxxxxxx hereby agrees to execute and deliver such
other and further documents or instruments, including, without
limitation, assignments and partnership authorizations, as may
reasonably be requested by Summit II and Summit III, as
applicable, to effectuate the transfer of title to the Desert
Valley Property, the Desert Sands Property and the Xxxxxxxxx
Property in accordance with and as contemplated by this paragraph
2 of this Agreement.
3. Conditions to Effectiveness of Agreement. The
provisions of this Agreement shall not become effective unless
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and until each general partner and each limited partner in each
of the Borrowers shall have given and delivered, irrevocably, its
written consent to this Agreement and the transactions
contemplated hereunder and in connection herewith.
4. Releases.
(a) Simultaneously with the execution and delivery of
this Agreement, and as a condition to the effectiveness of this
Agreement: (i) each of Desert Valley and Desert Sands shall have
executed and delivered to Summit III a release (the "Summit III
Releases"); and (ii) Xxxxxxxxx shall have executed and delivered
to Summit II a release (the "Summit II Release").
(b) Simultaneously with the execution and delivery of
this Agreement, and as a condition to the effectiveness of this
Agreement: (i) Summit II shall have executed and delivered to
Xxxxxxxxx a release (the "Xxxxxxxxx Release"); and (ii) Summit
III shall have executed and delivered to each of Desert Valley
and Desert Sands a release (the "Desert Valley Release" and the
"Desert Sand Release").
5. Borrowers' Professional Fees. Borrower and
Xxxxxxx personally shall each be jointly and severally
responsible for and liable for the payment of all "Professional
Fees" incurred by or otherwise accrued against any of the
Borrowers in connection with this Agreement and the transactions
contemplated herein or relating thereto; provided, however, that
each of the Borrowers shall have $5,000 of its Professional Fees
reimbursed out of cash flow from its respective transferred
property; provided, that Xxxxxxx shall not be personally
responsible for the payment of the professional fees, costs and
expenses of any of the Summit Entities. For purposes of this
paragraph 5, "Professional Fees" shall mean all fees, costs and
expenses incurred in connection with this Settlement Agreement
and the documents and instruments entered into in connection
herewith by any attorney, accountant, financial consultant or
other consultant or professional person. The parties acknowledge
and consent to the fact that each Borrower has been reimbursed in
the amount of $5,000 for its Professional Fees from the cash flow
of its respective Property.
-15-
6. Not a Novation. This Agreement, together with the
other documents executed in connection with the transactions
contemplated hereby is not intended to and shall not terminate or
extinguish any of the indebtedness or obligations under the
Desert Valley Loan Documents, the Desert Sands Loan Documents and
the Xxxxxxxxx Loan Documents and all other documents executed in
connection with the transactions contemplated thereby in such a
manner as would constitute a novation of the original indebted-
ness 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
Desert Sands Note, the Desert Valley Note and the Xxxxxxxxx Note.
7. Further Assurances. Each of the Borrowers shall
execute and deliver or cause to be executed and delivered such
assignments, agreements and partnership authorizations as may be
necessary or desirable to carry out the purposes of this
Agreement.
8. 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.
9. 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.
10. 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.
11. Waivers. Any Summit Entity may at any time and
from time to time waive any one or more of the conditions
-16-
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 any instance or under any particular circumstance shall
not be considered a waiver of such condition in any other
instance or any other circumstance.
12. 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.
13. No Beneficiary. No person, party or entity shall
under any circumstances have the right to assert that it is a
third party beneficiary of this Agreement.
14. 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.
15. 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.
16. Full Authority. Each of the parties to this
Agreement (and the undersigned representatives of such parties,
if any) has 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.
17. No Third Party Liability. Each of the Borrowers
acknowledges and agrees that the mechanism established in this
Agreement for the transfer of the Properties, and the
participation of the Summit Entities in the process, is a
legitimate and reasonable exercise of the applicable Summit
Entity's rights and remedies as the principal secured creditor of
the applicable Borrower. The Summit Entities' participation in
this process (and pursuant to this Agreement) is as a secured
-17-
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 any of the Borrowers. As such,
no of the Summit Entities 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 equity
participant for exercising its rights under this Agreement as
regards any of the Properties.
18. Choice of Law. This Agreement shall be governed
and construed in accordance with the internal laws of the State
of California.
19. Advice of Counsel. Each of the Borrowers,
Xxxxxxx, the Corporation, CTL Management and each of the Summit
Entities 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.
20. Conveyance. The Borrowers agree that the
conveyance of the Properties to the Summit Entities or their
respective assignees, designees or nominees according to the
terms of this Agreement is an absolute conveyance of all of their
respective right, title and interest in and to the Property in
fact as well as form and was not and is not now intended as a
mortgage, trust conveyance, deed of trust or security instrument
of any kind, and that the consideration for such conveyance is as
exactly as recited herein and that the Borrowers have no further
interest (including right of redemption) or claims in and to the
Properties or to the proceeds and profits which may be derived
thereof, of any kind whatsoever.
21. Summit Reliance. The Summit Entities acknowledge
that they are relying solely on their own inspections, tests,
audits, studies and investigations conducted in connection with,
-18-
and on their own judgment with respect to, the acquisition of the
Properties. The Summit Entities further acknowledge that (A) the
Borrowers have made and are making no representations or
warranties as to the accuracy or completeness of any third party
reports or studies regarding the Properties or any of the tenants
(except as specifically provided for herein), and (B) the
Borrower Entities disclaim any representations or warranties
regarding any matter with respect to the Properties, and (C) the
Summit Entities shall accept the Properties in the condition in
which they exist on the date the Properties are transferred to
the Summit Entities or their nominee "AS IS" and "WHERE IS," with
all faults (e.g., faults (latent or patent) discovered by the
Summit Entities or their nominee at any time (whether or not such
faults (latent or patent) are disclosed to the Summit Entities by
Borrowers) without any further representation or warranty,
express or implied, in fact or by law.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK;
THE SIGNATURE PAGES FOLLOW
-19-
IN WITNESS WHEREOF, each of the Borrowers, Xxxxxxx, the
Corporation, CTL Management and each of the Summit Entities have
duly executed this Agreement as of the day and year first above
written.
DESERT VALLEY--204, LTD.,
an Oregon limited partnership,
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
DESERT SANDS APTS.--148, LTD.,
an Oregon limited partnership,
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: General Partner
XXXXXXXXX-148, 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: President
-20-
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 Associates
II, 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
-21-
SUMMIT TAX EXEMPT L.P. III, a
Delaware limited partnership
By: Related Tax Exempt Associates
III, 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
-22-
The undersigned, being all of the limited partners of Desert
Valley - 204, Ltd., an Oregon limited partnership (the
"Partnership") hereby consent to the execution by the Partnership
of this Agreement and the completion of the transactions
contemplated hereby.
PACIFIC FRONTIER WOOD MARKETS,
INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CSL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
The undersigned, being all of the limited partners of Desert
Sands Apts. -- 148, Ltd., an Oregon limited partnership (the
"Partnership") hereby consent to the execution by the Partnership
of this Agreement and the completion of the transactions
contemplated hereby.
PACIFIC FRONTIER WOOD MARKETS,
INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
CSL PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
The undersigned, being the sole limited partner of Xxxxxxxxx
- 148, Ltd., an Oregon limited partnership (the "Partnership")
hereby consents to the execution by the Partnership of this
Agreement and the completion of the transactions contemplated
hereby.
PACIFIC FRONTIER WOOD MARKETS,
INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
EXHIBIT A
(Description of Desert Valley Property)
(To Be Attached)
EXHIBIT B
(Description of Desert Sands Property)
(To Be Attached)
EXHIBIT C
(Description of Xxxxxxxxx Property)
(To Be Attached)
SCHEDULE 1
(Service Contracts)
----------------------------------------------------
SETTLEMENT AGREEMENT
among
DESERT VALLEY -- 204, LTD.
DESERT SANDS APTS. -- 148, LTD.,
XXXXXXXXX - 148, LTD.,
XXXXXXX REALTY CORP.,
XXXXXX X. XXXXXXX,
CTL MANAGEMENT
and
SUMMIT TAX EXEMPT X.X. XX
and SUMMIT TAX EXEMPT L.P. III
Dated as of July 31, 1995
Premises:
XXXXXXXXX TERRACE APARTMENTS
CONTRA COSTA COUNTY, CALIFORNIA
SUNSET CREEK APARTMENTS
LOS ANGELES COUNTY, CALIFORNIA
SUNSET VILLAGE APARTMENTS
LOS ANGELES COUNTY, CALIFORNIA
----------------------------------------------------
