EXHIBIT 10.79
GREEN XXXXXXX I
LENDER LOAN NO. 003-35219
AGREEMENT
THIS AGREEMENT is dated as of the 30th day of September, 2005 (this
"Agreement"), between GENERAL ELECTRIC CREDIT EQUITIES, INC., a Delaware
corporation ("Lender"), and H.P. KNOLLS I ASSOCIATES, L.P., a New York limited
partnership ("Grantor").
R E C I T A L S:
A. Grantor executed that certain Mortgage Note dated December 1, 1998, in
the stated principal amount of SEVENTEEN MILLION FIVE HUNDRED EIGHT THOUSAND AND
NO/100 DOLLARS ($17,508,000.00) (the "Note"), payable to the order of Mellon
Mortgage Company, a Colorado corporation ("Original Lender"), bearing interest
and being payable as therein provided, said Note being secured by that certain
Mortgage dated December 1, 1998 to Original Lender, filed for record in Mortgage
Book Volume 18224, Page 475 et seq. of the Real Property Records of Allegheny
County, Pennsylvania (the "Mortgage"), and said Note additionally secured by
that certain Security Agreement dated December 1, 1998, from Grantor to Original
Lender (the "Security Agreement").
B. Original Lender assigned (i) the Note, (ii) the Mortgage, (iii) the
Security Agreement, and (iv) all other documents or instruments evidencing,
governing, or securing the loan (collectively, the "Loan Documents") to Midland
Loan Services, Inc., who thereafter assigned the Loan Documents to the Secretary
of Housing and Urban Development of Washington, D.C. ("HUD"), and HUD thereafter
assigned the Loan Documents to Condor One, Inc., a Delaware corporation
("Condor") and Condor assigned the Loan Documents to Lender.
C. The obligations under the Note and Loan Documents are subject to
satisfaction solely by foreclosure against the Project and no recourse can be
had against Grantor personally for any deficiency claim following foreclosure.
D. Grantor has failed to make regularly scheduled principal and interest
payments to Lender as provided in the Note, and to pay other amounts becoming
due thereunder and under the Loan Documents, and a default currently exists
under the Loan Documents.
E. Grantor has been notified of such defaults and has advised Lender that
Grantor does not intend to cure such defaults and that Grantor instead desires
to convey the Property (hereunder defined) to Lender as hereinafter described.
F. Grantor has proposed to execute and deliver a Deed in Lieu of
Foreclosure transferring the Project to Lender or its designee without the need
of legal proceedings and related costs.
G. Lender and Grantor have reached an agreement with respect to the matters
described above and desire to evidence their agreement as hereinafter provided.
AGREEMENT:
NOW, THEREFORE, the undersigned, in consideration of Ten and No/100 Dollars
($10.00), the premises contained herein, and other good and valuable
consideration exchanged by each to the other, the receipt and sufficiency of
which are hereby acknowledged and confessed, including the conveyance by Grantor
to Lender (acting in such capacity as grantee, the "Grantee"), of the real
property described in the Mortgage and all improvements and personal property
situated on it, together with all personal property described in the Security
Agreement (collectively, the "Property") and the release by Grantor, as
hereinafter provided, and the covenant by Lender not to xxx with respect to
certain aspects of the financing of the Property as hereinafter provided, do
hereby covenant and agree as follows, intending to be legally bound:
1. The Recitals set forth above are hereby incorporated herein and made a
part of this Agreement.
2. Grantor agrees that an event of default has occurred under the Loan
Documents, that Lender has the immediate right to exercise its remedies under
the Loan Documents, the indebtedness evidenced by the Note has been accelerated
and is fully due and payable, there is no defense or offset to such debt and
that the outstanding amounts under the Loan Documents as of September, 2005 are
as follows:
Principal $16,625,376.64
Interest $490,217.70
Late Charges $8,193.50
Attorney's Fees $40,737.88
Other 0.00
Total: $17,164,525.72
The Indebtedness continues to accrue interest at the rate of $2,539.99 per day.
3. Each of Lender and Grantee does hereby acknowledge that, as set forth in
Recital C, the obligations under the Note and the Loan Documents are
non-recourse obligations. Nothing herein shall make Grantor personally liable
for obligations on the Note or the Loan Documents.
4. Grantor does hereby release, discharge, hold harmless and forever acquit
Lender, its managers, officers, directors, shareholders, representatives,
agents, employees, successors and assigns, from all claims, liabilities,
actions, suits, demands, obligations, costs, expenses, damages and causes of
action which Grantor has asserted or could have asserted or could ever assert in
connection with (a) the loan evidenced by the Note (the "Loan") and/or any other
indebtedness secured by the Loan Documents, (b) the Note, the Mortgage, the
Security Agreement and/or any of the other Loan Documents, (c) the Property,
and/or (d) any transactions arising out of the financing of the Property.
5. Lender hereby covenants not to xxx, claim or bring any action against
Grantor, its successors or assigns, for any personal liability beyond Grantor's
interest in the Property for failure to make any and all further payments due to
Lender under the Note or for any other matters in connection with the Loan
Documents other than this Agreement and the Deed (hereinafter defined);
provided, however, that the lien and security interests of the Mortgage, the
security interests created by the Security Agreement and all other rights in and
to the Property created by the Loan Documents shall remain in full force and
effect to secure all unpaid amounts owing thereunder or secured thereby, and
Lender shall continue to have the right to foreclose the lien and security
interests of the Mortgage, Security Agreement, and the other Loan Documents, and
to pursue such other remedies as it may have under the Mortgage, Security
Agreement, and the other Loan Documents with respect to the Property, including
without limitation to bring an action or actions under the Note, Mortgage or
other Loan Documents as well as an action under the Pennsylvania Deficiency
Judgment Act, all as may be necessary to perfect, continue or realize on the
Property and the liens of the Loan Documents; provided, however, that Lender
makes clear in such actions that the judgments therein are restricted to the
Property and do not impose a lien on other assets of Grantor, and further
provided that this covenant not to xxx shall terminate and Lender may take any
and all legal action to, among other things, collect the Indebtedness if (i)
Grantor or any other person or entity in conjunction with or at the
encouragement of Grantor takes any action to hinder, delay or interfere with (a)
conveyance of the Property to Lender, or (b) the subsequent foreclosure by
Lender of the liens or security interests of the Mortgage, Security Agreement
and other Loan Documents or (ii) Grantor is otherwise in default of its
obligations under this Agreement.
6. Grantor warrants and represents to Lender that it owns the Property in
fee simple and that, to the best of its current knowledge and belief after
reasonable investigation, all persons, firms, corporations, materialmen,
artisans, contractors and subcontractors who have furnished services, labor or
materials used in improving the Property have been paid in full and that there
are no claims outstanding which would entitle the holder thereof to affix a lien
or security interest against the Property, all except as may be described on
Schedule 1 attached hereto and made a part hereof.
7. Grantor warrants and represents to Lender that, to the best of its
current knowledge and belief (without special investigation), there has been no
(a) deposit, storage, disposal, burial, discharge, spillage, seepage or
filtration of petroleum products, chemical liquids or solids, asbestos
containing material or any hazardous wastes, hazardous substances or toxic
substances or presence of any toxic mold (collectively, "Hazardous Substances")
upon, under or within the Property or any contiguous real estate; (b) liens or
claims against the Property or Grantor with respect to any Hazardous Substances;
or (c) notices of any violation of any federal, state or local rule, law,
regulation or ordinance regarding the Property or any Hazardous Substances, all
except as may be described on Schedule 2 attached hereto and made a part hereof.
8. Grantor warrants and represents to Lender that, except for ad valorem
taxes in the amount of $266,541.22 due and payable on October 31, 2005, there
are no taxes affecting the Property which are due, payable or delinquent as of
the effective date hereof (any "Taxes Owed") and Grantor agrees to transfer to
Lender, contemporaneously with the execution of this Agreement, all amounts in
any escrow accounts for the payment of Taxes Owed. Grantee acknowledges that
upon the previous transfer of the Loan Documents to HUD, HUD applied then
existing tax escrow amounts toward amounts owed under the Loan Documents.
9. Grantor covenants that Grantor shall not take any actions to hinder,
delay or interfere with (i) conveyance of the Property to Lender, or (ii) the
subsequent foreclosure by Lender of the liens or security interests of the
Mortgage, Security Agreement and other Loan Documents.
10. This Agreement is executed in connection and contemporaneously with,
and in reliance by Lender upon, the execution and delivery by Grantor to
Grantee, of (a) that certain Deed in Lieu of Foreclosure in the form attached
hereto as Exhibit "A" (the "Deed"), (b) that certain Assignment and Assumption
of Leases in the form attached hereto as Exhibit "B" (the "Assignment of
Leases"), (c) that certain Assignment of Intangibles in the form attached hereto
as Exhibit "C" (the "Assignment of Intangibles"), (d) that certain Xxxx of Sale
(the "Xxxx of Sale") in the form attached hereto as Exhibit "D" and (e) that
certain Declaration of Covenants (the "Declaration of Covenants") in the form
attached hereto as Exhibit "E". The Deed, Assignment and Assumption of Leases,
Assignment of Intangibles, Xxxx of Sale and Declaration of Covenants are
sometimes collectively referred to herein as the "Closing Documents". Grantor
shall execute and deliver the Closing Documents simultaneously with the
execution and delivery to Grantee of this Agreement.
11. Upon the execution and delivery of the Closing Documents, Grantor shall
deliver possession of the Property to Grantee in good condition, including, but
not limited to, all personal property, fixtures, and furnishings, as well as all
leases, agreements, tenant security deposits, prepaid rents, deposit and other
accounts, all of Grantor's right, title and interest in and to deposits with
utility providers and others for goods and services related to or to be provided
at the Property, all of Grantor's right, title and interest in and to any escrow
accounts and funds, records, plans, surveys, and other documents and property
relating to, affecting or utilized by Grantor (or Grantor's employees, agents,
and contractors) with respect to the Property, and/or operation, maintenance,
repair, or replacement of the Property (or any portion thereof) in any way.
Among other things, Grantor shall deliver to Grantee the following:
a) a list of all accounts payable along with copies of all
outstanding bills or invoices;
b) a list of all outstanding purchase orders and copies of the same;
c) copies of any and all contracts or records pertaining to the
Property or the maintenance or operation thereof;
d) a detailed prior year and year end to date income and expense
statement and detailed general ledger;
e) the leases with original signatures for all tenants with all
original amendments thereto;
f) any tenants' security deposits or prepaid rent;
g) lists identifying all transferable and nontransferable utility
deposits;
h) a list of the names and account numbers of all utility companies
servicing the Property;
i) all keys and key code books to entrance doors, storage areas,
boiler rooms, mechanical rooms, rest rooms, etc.;
j) all electronic card access keys and records pertaining thereto,
if applicable;
k) a certification of each tenant's current rental payment status;
l) reproducible copies of all site plans, architectural drawing or
plans, engineering and electrical plans, including but not
limited to final construction as-builts, current as-builts of all
tenant space, and original construction specifications for all
improvements on the Property to the extent in Grantor's
possession or control;
m) all operating and maintenance manuals, warranties and service
contracts for all equipment and appliances at the Property to the
extent in Grantor's possession or control;
n) all marketing materials, brochures, fliers, floor plans, site
plans, and advertisements, including camera ready original art
work for the same, for the Property or any part thereof to the
extent in Grantor's possession or control;
o) any art boards, building standard finish boards, renderings or
other art work depicting or relating to the Property or any part
thereof to the extent in Grantor's possession or control;
p) all original permits, licenses, certificates of occupancy along
with all records regarding governmental approvals and/or
compliance with zoning ordinances, fire codes and state, county
or municipal laws, regulations or ordinances to the extent in
Grantor's possession or control;
q) copies of any and all notices identified on Schedule 2 to this
Agreement;
r) all records relating to taxes or other municipal, state or
federal liens;
s) all leasing brokers owed or entitled to commissions and copies of
all commission agreements;
t) a list of all suppliers, contractors and vendors;
u) all collected and unapplied rents received by Grantor for rents
accruing as of April 1, 2005 or thereafter; and
v) certificates of title to all vehicles used in connection with the
Property.
12. Grantor represents to Grantee that there are currently no Housing
Assistance Payment contracts ("HAP Contracts") in effect with respect to the
Property or in any way binding upon Grantor or the Property and that Section 8
vouchers accepted from tenants on the Property are accepted voluntarily and not
pursuant to any obligation to accept such vouchers.
13. Contemporaneously with the execution of this Agreement, Grantor shall
deliver to Grantee copies of all documentation relating to past or currently
effective tax credits relating to the Property, including, without limitation,
any agreements with any current or prior limited partners of Grantor and any
payments made to any such limited partners with respect to tax credits.
14. Grantor shall forward to Grantee any rents received by Grantor after
September 30, 2005 within three (3) business days of Grantor's receipt of same
and, on October 1, 2005, shall deliver to Grantee any rents or other amounts
from or pertaining to the Property which are then in Grantor's possession or
control.
15. All transfers made herein are made on an "AS IS, WHERE IS" basis, with
no warranties, express or implied, except for warranties of title, and Grantor
makes no warranty or representation, express or implied, of any kind, nature or
description whatsoever as to the condition of the Property except as expressly
provided in this Agreement.
16. Each of Lender and Grantee acknowledges that it has had an opportunity
to conduct any and all due diligence regarding the Property (including, without
limitation, a Phase I investigation) prior to transfer and that it is relying
solely on its own inspection and/or investigation of the Property and this
Agreement. Each of Lender and Grantee did not rely upon any written or oral
statement or representation whatsoever by Grantor regarding the Property other
than those expressly set forth in this Agreement.
17. Grantor indemnifies and holds Lender and its successors and assigns
harmless from and against all claims, liens, suits, actions, debts, damages,
costs, losses, allegations, judgments, charges and/or expenses of any nature
whatsoever arising as a result of (i) any of Grantor's representations contained
in this Agreement being false or materially misleading, and/or (ii) any breach
by Grantor of its covenants set forth in this Agreement.
18. Except with respect to any reasonable and customary costs payable to
any third parties not affiliated with or related to Grantor or any of its
affiliated or related parties, incurred in the ordinary course of business in
operating the Property prior to September 30, 2005 and relating to services
rendered prior to September 30, 2005, and which relate solely to the Property
and are typical of expenses incurred in connection with operating properties
such as the Property ("Customary Operating Costs"), Grantor indemnifies and
holds Lender and its successors and assigns harmless from and against any loss,
claim, damage or expense (including, without limitation, reasonable attorney's
fees) related to or arising out of any claim made against Lender for sums due
and owing in connection with or related to the Property which arose prior to the
date of this Agreement as a result of Grantor's actions. If a claim is made
against Lender for which indemnification is sought hereunder, Lender shall
notify Grantor of the claim and Grantor shall have the option of defending the
claim at its sole cost and expense by a law firm reasonably acceptable to Lender
provided Grantor elects to provide such defense by notice to Lender within five
(5) days of receipt of the claim for indemnity from Lender. Grantee agrees to
pay the Customary Operating Costs.
19. Grantor hereby covenants and agrees that in the event that Grantor
shall (a) file a petition in any court or be the subject of any petition filed
in any court under title 11 of the United States Code, 11 U.S.C.ss.101, et seq.
(as such title may be amended from time to time, the "Bankruptcy Code"), (b) be
subject to any order for relief under the Bankruptcy Code, (c) file or be the
subject of any petition seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or relief
for debtors, (d) have sought or consented to or acquiesced in the appointment of
any trustee, receiver, conservator or liquidator, or to an assignment of
Grantor's assets (or any part thereof) for the benefit of creditors, or (e) be
the subject of an order, judgment, or decree entered by any court approving a
petition filed against Grantor for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or relief
for debtors; then Lender shall be entitled to relief from any stay imposed under
the Bankruptcy Code (including but not limited to any automatic stay under
Section 363 thereof) or otherwise, on or against the exercise of the rights and
remedies otherwise available to Lender as provided in this Agreement, the Loan
Documents, or as otherwise available at law, and Grantor hereby waives its right
to object to such relief.
20. This Agreement is made solely for the benefit of the parties hereto and
no other person or persons shall have any rights or remedies under or by reason
of this Agreement.
21. No delay or omission by Lender in exercising any right or power arising
under this Agreement or the Loan Documents by reason of any default hereunder or
thereunder shall be construed as a waiver of such default or as an acquiescence
therein, nor shall any single or partial exercise thereof preclude any further
exercise thereof. No waiver of any default shall be construed as a waiver,
acquiescence or consent to any preceding or subsequent default.
22. Grantor covenants and agrees to execute any additional documents and to
do all other acts reasonably required to effect the intent and purposes of this
Agreement. In furtherance and not in limitation of the foregoing, Grantor
expressly agrees, upon receipt of Lender's written request, to execute such
further instruments and to take such other actions as may be required to (i)
transfer title and possession of the Property to Grantee; (ii) transfer utility
accounts; (iii) collect rents related to the Property, (iv) obtain possession
and control of all deposits, prepaid rent, escrow funds, and prepaid expenses
related to the Property, and (v) enable the Lender to prosecute an appeal of
real estate tax assessments pertaining to the Property.
23. Nothing herein shall be deemed or construed to create a partnership or
joint venture between any of the parties hereto.
24. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
25. Each person executing this Agreement represents and warrants that such
person is lawfully authorized and empowered to execute this Agreement on behalf
of the entity on whose behalf such person is signing and that upon such
execution this Agreement will be binding upon such entity.
26. This Agreement, and all provisions, representations, releases and
indemnifications herein contained shall be binding upon Grantor and its
successors and assigns and shall inure to the benefit of Lender and its
successors and assigns, and shall survive the execution, delivery and
recordation of any or all of the Closing Documents.
27. This Agreement, together with the Closing Documents, (i) constitutes
the entire understanding between the parties hereto, (ii) without limiting the
generality of the foregoing, supersedes all letters, agreements in principle,
outlines of terms or other oral or written communications between any of the
parties hereto, and (iii) may not be modified, amended or terminated, except by
a written agreement which is signed by each of the parties hereto. Each of the
parties hereto stipulates and agrees that such party has not relied upon any
representations, statements, covenants or warranties in entering into this
Agreement other than those actually set forth in this Agreement, incorporated by
reference by this Agreement, or specifically referred to in this Agreement. All
representations and warranties contained herein shall be true and correct as of
the date of execution of this Agreement. Subject to Grantor's obligations with
respect to indemnification contained herein, each party represents that he, she
or it has received independent advice from legal counsel with respect to the
advisability of entering into this Agreement and with respect to the
advisability of making the agreements and providing the releases, waivers and
expressions of intent contained in this Agreement. Each party shall be
responsible to pay its own legal fees and costs. Each party represents that he,
she or it has read this Agreement and understands the contents hereof.
28. This Agreement may be executed by each party in identical counterparts,
each of which shall be deemed to be an original and all of which, taken
together, shall constitute one agreement binding upon all parties. [Signature
Page Follows]
EXECUTED to be effective as of the date and year first recited above.
"LENDER"
GENERAL ELECTRIC CREDIT EQUITIES, INC.,
a Delaware corporation
By: /s/ Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx Xxxxxx
Authorized Signatory
"BORROWER"
H.P. KNOLLS I ASSOCIATES, L.P.,
a New York limited partnership
By: HP-BC Limited Partnership,
a New York limited partnership,
its sole general partner
By: Green Xxxxxxx I, LLC,
a New York limited liability company,
its sole general partner
By: Home Properties, L.P.,
a New York limited partnership,
its managing member
By: Home Properties, Inc.,
a Maryland corporation,
its sole general partner
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx,
Senior Vice President
