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EXHIBIT 10.1
[PRUDENTIAL LETTERHEAD]
June 11, 1999
EQK Realty Investors I
c/o Lend Lease
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Subject: Prudential Loan No. 0000000
Xxxxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, XX
Forbearance Agreement
Dear Xx. Xxxxx:
As you are aware, the above-referenced Loan held by The Prudential Insurance
Company of America ("Prudential") encumbering property of EQK Realty Investors
I (EQK or Borrower) is due and payable in full as of June 15, 1999 ("Maturity
Date"). You have indicated the Borrower's inability to pay the Loan in full on
the Maturity Date and have requested some relief or extension. Although
Prudential is unwilling to extend or reinstate the Loan, Prudential is willing
to forbear exercising remedies (other than any remedies continuing to be
exercised under the Loan documents) from the date of Xxxxxxxx's execution of
this letter until December 15, 1999 ("Forbearance Period"), provided the
following terms and conditions are met ("Forbearance Conditions"):
1. The Borrower executes this letter where indicated below and returns
the same to Prudential by June 16, 1999 along with an administrative
fee of $25,000.00 which fee is hereby deemed fully earned and shall
not be applied to sums due under the Loan documents.
2. Payments ("Forbearance Payments") shall be made to Prudential as
follows: principal and interest payments of $324,076.70 shall be due
on the fifteenth of each month during the Forbearance Period.
Prudential will have the right, at its sole discretion, to apply
Forbearance Payments received to principal first, then to any other
sums due under the Loan documents, then to interest.
3. The entire remaining Loan balance must be paid in full by the end of
the Forbearance Period.
4. No defaults exist or shall hereafter occur during the Forbearance
Period under the Loan documents other than the failure to pay the
Loan in full on the Maturity Date.
If the Borrower complies in a timely fashion with all of the
Forbearance Conditions, Prudential will waive default interest accruing prior
to or during the Forbearance Period, and interest will be collected only at the
Contract Rate of 8.88% upon payoff in full. However, in the event Borrower does
not comply in a timely fashion with all of the Forbearance Conditions, interest
will remain due at the default rate of 13.92% from and after the Maturity Date.
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EQK Realty
Forbearance Agreement
June 11, 1999
Page 2
By countersigning this letter where indicated below, Xxxxxxxx represents,
warrants, covents and agrees to and with Prudential as follows:
1. Prudential holds a valid and perfect first priority mortgage lien
against the property known as the Harrisburg Mall (the "Premises"), as set
forth in an Amended and Restated Open-End Mortgage and Security Agreement
dated as of December 15, 1992, as amended (the "Mortgage").
2. All leases of and rents generated by the Premises have been
absolutely assigned to Prudential, as assignee, and First Union National
Bank of Georgia, as Central Collection Agent, pursuant to the Absolute
Assignment of Leases and Rents and Rental Collection Agreement dated
December 16, 1992, as amended (the "Absolute Lease Agreement"), all rents,
security deposits and other sums paid under leases for the Premises have
been and shall continue to be paid to said Rental Collection Agent and all
such sums have been and continue to be deposited with the Escrow Agent and
applied in accordance with the Cash Management and Security Agreement dated
as of December 15, 1992, as amended (the "Cash Management Agreement"), by
and among Borrower, Prudential and First Union National Bank of Georgia, as
Escrow Agent.
3. Borrower hereby ratifies and confirms all Loan documents,
including, without limitation, the Second Amended and Restated Note dated
December 16, 1992, as amended (the "Note"), from Borrower to Prudential;
the Mortgage; the Absolute Lease Assignment; the Cash Management Agreement;
and the Confession of Judgment contained in the Note; the Acknowledgment of
Confession of Judgment executed by Borrower and acknowledged December 19,
1996; and the Warrant Agreement") by and between Borrower and Prudential.
4. Borrower does not have or hold any defenses, setoffs, demands or
claims against the Loan, Prudential or Prudential's officers,
representatives or agents.
5. As of the date of this letter, the outstanding principal balance
of the Loan is $43,794,149.14.
This is a one-time forbearance and Prudential does not presently intend to
forbear beyond the date set forth above.
In the event any of the Forbearance Conditions are not met in a timely
fashion, Prudential's obligation to forbear shall terminate and be null and
void, and Prudential shall be entitled to exercise any available remedies for
default under the Loan Documents and/or applicable law. Except for the limited
forbearance set forth above, Prudential reserves all of its rights and remedies
under the Loan documents or under applicable law, and this Forbearance Agreement
shall not be deemed an election of remedies, nor shall it constitute a waiver of
any rights or remedies otherwise available to Prudential.
As a further material inducement for Prudential to enter into this
Forbearance Agreement without which Prudential would not have agreed to a
Forbearance Period, Borrower hereby makes the following irrevocable waivers:
a) BORROWER WAIVES AND RELEASES ANY EXISTING OFFSETS, DEFENSES OR
COUNTERCLAIMS RELATING TO THE LOAN OR THE LOAN DOCUMENTS.
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EQK Realty
Forbearance Agreement
June 11, 1999
Page 3
b) XXXXXXXX ALSO WAIVES THE RIGHT TO A TRIAL BY JURY IN THE EVENT THE
LOAN DOCUMENTS OR THIS FORBEARANCE AGREEMENT BECOME THE BASIS OF
LITIGATION.
Sincerely,
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Vice President
Accepted and agreed to this 14 day of June, 1999.
BORROWER:
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/S/ Xxx Xxxxx
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BY: Xxx Xxxxx
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Title: VP
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cc: Xxxx Xxxx
Xxxx XxXxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxx
