Exhibit 10.1.1

 

AGREEMENT FOR DISCOUNTED PAYOFF

 

 

THIS AGREEMENT FOR DISCOUNTED PAYOFF ("Agreement") dated this _______ day of
October, 2018, is made and entered into by and among Wells Fargo Bank, National
Association ("Wells Fargo"), and SB Partners (the "Borrower") and Eagle IV
Realty, LLC (“Mortgagor”).

 

RECITALS

 

A.     Wells Fargo made a loan to the Borrower in the original principal amount
of $6,000,000.00 (the "Loan"). The Loan is evidenced by a promissory note (the
“B-Note”) dated April 29, 2011 executed by the Borrower in favor of Wells Fargo,
in the original principal amount of the Loan ("Note").

 

B.     As of September 5, 2018, the unpaid principal balance of the Loan is
$5,693,855.94, the accrued, but unpaid interest thereon is $              0    
        , and the per diem interest is $              0             .

 

C.     The Note is secured by, among other things, liens on real property (the
“Maple Grove Property”) as evidenced by that Mortgage, Security Agreement,
Assignment of Leases and Rents and Fixture Financing Statement dated April 29,
2011 (the “Mortgage”) made by Mortgagor and recorded May 5, 2011, as Document
No. 9651267, in the Official Records of the County of Hennepin, State of
Minnesota and by the filing of various UCC-1 financing statements.

 

D.     The Note is further secured by, among other things, a pledge of
Borrower’s membership interest in the Mortgagor (the “Pledged Interests”) as
evidenced by a Pledge Agreement dated April 29, 2011 made by Borrower (the
“Pledge Agreement”) and by the filing of various UCC-1 financing statements.

 

E.     The Note, Mortgage, Pledge and all other agreements, documents and
instruments executed from time to time in connection with the loan evidenced by
the Note or related thereto are collectively referred to as the “Loan
Documents.”

 

F.     Borrower has requested that Wells Fargo accept payment of $4,000,000.00
("Discounted Payoff Amount") in full satisfaction of the Note and Wells Fargo is
willing to do so subject to the execution, delivery and strict performance of
the terms and conditions of this Agreement.

 

 

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NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
intending to be legally bound hereby agree as follows:

 

1.             CONDITIONS PRECEDENT. The following are conditions precedent to
Wells Fargo's obligations under this Agreement:

 

1.01      Receipt by Wells Fargo of the fully executed original of this
Agreement, and any and all other documents and agreements which are required by
this Agreement, each in form and content acceptable to Wells Fargo on or before
October 5, 2018. Unless and until Borrower and Mortgagor execute and return this
Agreement to Wells Fargo by such date and Wells Fargo signs this Agreement,
Wells Fargo shall have no obligation to accept the Discounted Payoff Amount in
full satisfaction of the Note and the Wells Fargo is entitled to immediately
exercise all rights and remedies available to it.

 

1.02      The representations and warranties contained in this Agreement are
true and correct.

 

1.03      Borrower shall deliver to Wells Fargo the Discounted Payoff Amount,
plus Wells Fargo’s attorney’s fees and expenses in connection with this
Agreement, in cash or by cashier's check (from a lender acceptable to Wells
Fargo) or by confirmed wire transfer, in immediately available U.S. federal
funds on or before 3:00 p.m., October 30, 2018. If payment is remitted by wire
transfer, instructions are as follows:

 

Bank Name: Wells Fargo Bank NA

 

Routing Number: 121000248

 

Account Name: Wires In Process – WSLC

 

Account Number 0065668-4050720

 

Ref: SB Partners, Obligor 5468770332, Obligation 26, Loan # WB17338

 

Attention: Heather Jones

 

2.             REPRESENTATIONS AND WARRANTIES.

 

2.01     Borrower and Mortgagor acknowledge and agree that the Recitals
hereinabove are true and correct, that the indebtedness evidenced by the Note is
due and owing to Wells Fargo without offset, defense or counterclaim, and
further acknowledge and agree that the Note, the Mortgage, Pledge and all other
Loan Documents, are valid and binding and fully enforceable according to their
terms.

 

2.02     The Borrower represents and warrants that, other than those listed as
parties to this Agreement, there is no individual or entity owned by, controlled
by, under common ownership with, or affiliated with Borrower or Mortgagor, which
possesses a claim, demand, or cause of action of any kind and nature whatsoever
arising out of or related to the Loan against Wells Fargo, or any of its past or
present subsidiaries, divisions, affiliates, attorneys, officers, employees,
directors, agents, alter egos, shareholders, partners, heirs, executors,
administrators, legal successors and assigns, or their respective insurers and
underwriters.

 

 

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2.03     Borrower and Mortgagor represent and warrant that Borrower and
Mortgagor are the owners of and have not assigned, sold, transferred, or
otherwise disposed of any of the Pledged Interests and Maple Grove Property,
respectively.

 

2.04     Borrower and Mortgagor each represents and warrants that each
individual executing this Agreement on their behalf is duly authorized to
execute this Agreement and has all requisite power, authority, and approval
required to enter into, execute, and deliver this Agreement, including the
releases given in this Agreement.

 

2.05     Borrower represents and warrants that it understands that this
Agreement constitutes a forgiveness of debt by Wells Fargo and as such, Wells
Fargo shall file all applicable documents required by bank regulatory agencies
and taxing authorities in connection with the forgiveness of debt by national
banks;

 

3.            BORROWER'S OBLIGATIONS. Borrower agrees to satisfy the conditions
precedent set forth in Section 1, above.

 

4.            RELEASE OF DOCUMENTS AND COLLATERAL.   Upon satisfaction (or
waiver by Wells Fargo) of the conditions precedent in Section 1 of this
Agreement including, but not limited to, the receipt of the Discounted Payoff
Amount (the "Effective Date"), Wells Fargo shall (i) satisfy the Mortgage, (ii)
release the security interest on the Pledged Interests under the Pledge
Agreement, (iii) release the financing statements; and (iv) release the Note
marked “Paid in Full” and Borrower and Mortgagor shall without further act be
released and discharged from their respective obligations and liabilities under
the Loan Documents in respect of the Note, except for those obligations and
liabilities that by their terms survive the payment in full of the indebtedness
and except for their respective obligations and liabilities under this
Agreement. This Agreement only pertains to the Loan and nothing in this
Agreement modifies or waives any rights that Wells Fargo may have with respect
to any other banking or financial relationship between Wells Fargo and the
Borrower or the Mortgagor.

 

5.            DEFAULT UNDER TERMS OF AGREEMENT.   The Borrower and Mortgagor
understand and agree that Wells Fargo’s agreements hereunder are conditioned
upon receipt of the Discounted Payoff Amount in accordance with the terms of
this Agreement, and the execution of, and strict performance by Borrower and
Mortgagor under, this Agreement. Borrower and Mortgagor agree that if Wells
Fargo does not receive the Discounted Payoff Amount by the date specified above,
or if any amount applied in payment of the Note is or must be, or is claimed or
ordered to be, rescinded, avoided or returned by Wells Fargo to any person or
entity for any reason whatsoever (including, without limitation, bankruptcy,
insolvency, or reorganization of Borrower, Mortgagor or any other person), the
full amount of indebtedness evidenced by the Note (without the discount of the
Note granted by Wells Fargo pursuant to this Agreement) shall become immediately
due and payable in full without notice or demand and Wells Fargo shall be
entitled to all of its rights and remedies as provided by the Note, the
Mortgage, Pledge and the Loan Documents and applicable law.

 

 

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6.            GENERAL RELEASE AND INDEMNITY. In consideration of Wells Fargo’s
execution of this Agreement, the Borrower and Mortgagor do hereby, on behalf of
themselves, their agents, insurers, heirs, successors and assigns, release,
acquit and forever discharge Wells Fargo and Wells Fargo & Company, and any and
all of their parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns, together with all
of their present and former directors, officers, agents, attorneys and employees
(together, the “Released Parties”) from any and all claims, demands or causes of
action of any kind, nature or description, whether arising in law or equity or
upon contract or tort or under any state or federal law or otherwise, which the
Borrower and Mortgagor, or either of them, has had, now has or has made claim to
have against the Released Parties for, upon or by reason of any act, omission,
matter, cause or thing whatsoever relating to any or all of the Note, Mortgage,
Pledge and Loan Documents, and arising from the beginning of time to and
including the date of this Agreement (the “Released Claims”), whether such
claims, demands and causes of action are matured or unmatured, liquidated or
unliquidated, known or unknown, fixed, contingent, direct or indirect, and shall
indemnify and hold harmless the Released Parties from any and all expenses,
costs, liability and fees (including but not limited to attorney’s fees and
expenses) incurred by any such Released Party as a result of any such action or
proceeding instituted by Borrower, the Mortgagor or any third party. Borrower
and Mortgagor irrevocably covenant and agree forever to refrain from initiating,
filing, instituting, maintaining or proceeding upon, or encouraging, advising or
voluntarily assisting any other person or entity to initiate, institute,
maintain or proceed upon any Released Claim of any nature whatsoever released in
this General Release and Indemnity.

 

7.            GENERAL PROVISIONS.

 

7.01     Each party to this Agreement acknowledges and warrants that it has been
represented by independent counsel of its own choice throughout all negotiations
which preceded the execution of this Agreement. Each party has read or had read
to it all of this Agreement and had it explained to it by his attorney and fully
understands all the terms used and their significance;

 

7.02     If any action or proceeding is brought to enforce or interpret this
Agreement, the prevailing party, in addition to all other legal or equitable
remedies possessed, shall be entitled to be reimbursed for all costs and
expenses, including reasonable attorneys fees, incurred by reason of such action
or proceeding;

 

7.03     This Agreement contains the entire agreement and understanding
concerning the subject matter hereof between the parties, and supersedes and
replaces all prior negotiations, proposed agreements and agreements written or
oral. Each of the parties to this Agreement acknowledges that no other party to
this Agreement, nor any agent or attorney of any such party, has made any
promise, representation or warranty whatsoever, express or implied, not
contained in this Agreement, to induce him to execute this Agreement. Each of
the parties further acknowledge that he is not executing this Agreement in
reliance on any promise, representation or warranty not contained in this
Agreement.

 

7.04     Whenever, in this Agreement, the context may so require, the masculine
or neuter gender shall be deemed to refer to and include the feminine,
masculine, and neuter, and the singular to refer to and include the plural.

 

 

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7.05     The substantive laws of the applicable state as provided in the Loan
Documents shall govern the construction of this Agreement and the rights and
remedies of the parties hereto.

 

7.06     It is expressly understood and agreed that this Agreement is being made
solely for the purpose of avoiding the expense and inconvenience of litigation
and that it is not an admission of wrongful conduct or of any liability to any
other party, all of which is expressly denied.

 

7.07     This Agreement may be executed in several counterparts, all of which
shall be an original and enforceable against any party who signed it, and all of
which shall constitute one and the same document.

 

7.08     CONFIDENTIALITY. Borrower and Mortgagor, for and on behalf of
themselves, and their agents, heirs, insurers, successors and assigns, covenant
that they will keep this Agreement and all negotiations with Wells Fargo
concerning the Note and this Agreement strictly confidential and, except as may
otherwise be required by law, will not disclose the terms of this Agreement or
the content of any of Borrower's and Mortgagor’s negotiations with Wells Fargo
to any person or entity, except to their legal, tax and other advisors and to
enforce this Agreement, but only after advising them of this obligation of
confidentiality. Borrower and Mortgagor shall be responsible for any breach of
this provision by any person to whom Borrower or Mortgagor shall provide
information or documents required to be kept confidential under this provision.

 

7.09     WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THE AGREEMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

7.10     ARBITRATION. Wells Fargo and each party to this agreement hereby agree,
upon demand by any party, to submit any Dispute to binding arbitration in
accordance with the terms of this arbitration provision. Arbitration may be
demanded before the institution of a judicial proceeding, or during a judicial
proceeding, but not more than 60 days after service of a complaint, third party
complaint, cross-claim, or any answer thereto, or any amendment to any of such
pleadings. A "Dispute" shall include any dispute, claim or controversy of any
kind, whether in contract or in tort, legal or equitable, now existing or
hereafter arising, relating in any way to any aspect of this agreement, or any
related agreement incorporating this arbitration provision (the "Documents"), or
any renewal, extension, modification or refinancing of any indebtedness or
obligation relating thereto, including without limitation, their negotiation,
execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination. DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN COURT BY A
JUDGE OR JURY. TO THE EXTENT ALLOWED BY APPLICABLE LAW, THE PARTIES IRREVOCABLY
AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY DISPUTE ARBITRATED PURSUANT TO THIS ARBITRATION PROVISION.

 

 

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A.     Governing Rules. Any arbitration proceeding will (i) be governed by the
Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any
conflicting choice of law provision in any of the documents between the parties;
and (ii) be conducted by the American Arbitration Association ("AAA"), or such
other administrator as the parties shall mutually agree upon, in accordance with
the AAA's commercial dispute resolution procedures, unless the claim or
counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs, in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes are referred to herein, as
applicable, as the "Rules"). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Arbitration proceedings hereunder shall be conducted at a location mutually
agreeable to the parties, or if they cannot agree, then at a location selected
by the AAA in the state of the applicable substantive law primarily governing
the Note. Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any Dispute. The arbitrator shall award
all costs and expenses of the arbitration proceeding. Nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the protections
afforded to it under 12 U.S.C. Section 91 or any similar applicable state law.

 

B.     No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any Dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

 

C.     Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any Dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. Every arbitrator must be a
neutral practicing attorney or a retired member of the state or federal
judiciary, in either case with a minimum of ten years’ experience in the
substantive law applicable to the subject matter of the Dispute. The arbitrator
will determine whether or not an issue is arbitral and will give effect to the
statutes of limitation in determining any claim. In any arbitration proceeding
the arbitrator will decide (by documents only or with a hearing at the
arbitrator's discretion) any pre-hearing motions which are similar to motions to
dismiss for failure to state a claim or motions for summary adjudication. The
arbitrator shall resolve all Disputes in accordance with the applicable
substantive law and may grant any remedy or relief that a court of such state
could order or grant within the scope hereof and such ancillary relief as is
necessary to make effective any award. The arbitrator shall also have the power
to award recovery of all costs and fees, to impose sanctions and to take such
other action as the arbitrator deems necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the applicable state rules of
civil procedure, or other applicable law. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction. The institution
and maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration if
any other party contests such action for judicial relief.

 

 

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D.     Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the Dispute being arbitrated and must be completed no later
than 20 days before the hearing date. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.

 

E.     Class Proceedings and Consolidations. No party hereto shall be entitled
to join or consolidate disputes by or against non-parties in any arbitration, or
to include in any arbitration any dispute as a representative or member of a
class, or to act in any arbitration in the interest of the general public or in
a private attorney general capacity. As used herein, “non-parties” shall mean
all persons and entities except Lender and the party(ies) executing this
agreement or any related Document.

 

F.     Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a Dispute, the arbitration provision most directly
related to the documents between the parties or the subject matter of the
Dispute shall control. This arbitration provision shall survive the repayment of
the Note and the termination, amendment or expiration of any of the Documents or
any relationship between the parties.

 

 

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7.11     TIME IS OF THE ESSENCE. TIME IS OF THE ESSENCE IN THIS AGREEMENT.

 

 

 

WELLS FARGO BANK,

NATIONAL ASSOCIATION

 

 

By: _____________________________

Name:

Title:

SB PARTNERS,

a New York limited partnership

 

By: SB Partners Real Estate Corporation, a

New York corporation, its sole general

partner

 

By:______________________________

Name:____________________________

Title:_____________________________

         

EAGLE IV REALTY, LLC,

a Delaware limited liability company

 

By:         SB Partners Real Estate Corporation

a New York corporation, its manager

 

 

By:      ________________________

Name: ________________________

Title:    Vice President