HomeMy WebLinkAbout1995-12-27 96-69 RESOLVECOUNCIL ACTION
Item No. 96-69
Date December 27. 1995
Item/Subject: Resolve Authorizing execution of 'Agreement and
Consent of the City of Bangor, Maine" with Key Bank of Maine
(Shaw's Project - Bangor Gas Works Site)
Responsible Department: Legal
Commentary:
Penobscot Development Limited Liability Company's agreement
with Key Bank of Maine to borrow funds for the Shaw's Supermarket/
Bangor Gasworks redevelopment project includes a collateral
assignment of the City's Development Agreement with the Penobscot
Development Limited Liability Company. More can be no assignment
without the consent of the City. This order gives the consent.
Manager's Comments: -^^o
Cite
Associated Information: Resolve, Agreement and Consent
Legal Approval:
Finance Director
Passage
First Reading
Referral Page of
Assigned to Councilor Popper December 27, 1995 96-69
CITY OF BANGOR
Authoxivin Bzecution f "A reement and Consent
(TITIE,) lba,_........._._....._....9........._.._.._..°........_R................._......_..._......._..._....
of the City of Bangor, Maine" with Key Bank of Maine
(Shaw's Project - Bangor Gas works Site)
atom c.'w caaa�;n wen: as waawro.:
aasonyan.
The City Manager is hereby authorized, on behalf of the
City of Bangor, to execute -and deliver an -Agreement and consent of
the City of Bangor, Maine", consenting to assignment of a
development agreement between the City of Bangor and Penobscot
Development Limited Liability Company to Key Bank of Maine as loan
security in connection with the Shaw's Supermarket/Bangor Gasworks
redevelopment project.
A copy of said "Agreement and Consent" is attached
hereto and is Incorporated herein by reference.
IN CUTS COUNCIL
December 27, 1995 96-69
Passed
nEsoire
CITY CLERK Authorizing Enecutian of "Apte and
-rn-sent 07 t e Ctry 0 Ban�o
with Key Bank of Plaine (Shaw's Project -
Magor Cas War/�
" site),,�/� /
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1
AGREEMENT AND CONSENT OF THE C[TY OF BANGOR, MAINE
THE CITY OF BANGOR, MAINE, a municipal corporation with a mailing address of
atm City Manager, City Hall, 73 Harlow Sheer, Bangor, Maim 04401 ("City") hereby
agrees with REY BANK OF MAINE, a Maine bank ("Lender") with a mailing address of
"Attention Senior Commercial Real Estate Officer, One Canal Playa, Portland, Maim
041014035 as follows:
Whereas the City has entered into a certain Development Agreement with Penobscot
Development Limited Liability Company, a Maim limited liability company (the
"Borrower" or "Developer"), dated on or about October 18, 1995 (the "Agreement") for
certain premises located on or about Main Street, Bangor, Maim designated as the "Main
Sheet Municipal Development District" and as more particularly described the attached the
Schedule (the "Premises"); and
Whereas Developer has requested that Lender advance the sum of up to $6,000,000.00
for the acquisition of land and the construction of improvements on the Premises counting
of a56,2952,700±squarefact masonry supermmket/drugstore building and related
improvements (collectively the "Improvements"), all in accordance with a certain
Commumion?erm Loan Agreement dated ,199_, even though
portions of the Premises have cot been conveyed by the City to Developer and the
performance of the City's obligations under the Agreemera remains eXecmery;
Whereas the City has agreed to provide certain additional assurances aM indemnities
under the Agreement, but for which Lender would not have agreed to advance fonds;
Whereas under the terms ofthe Agreement, the consent of the City is tequired for any
collateral assignment of the Agreement
Now therefore the parties hereby agta as follows:
1. Status of Aere meet. City hereby certifies m Lender that the Agreement is in fall
force and effect, that the Agreement is the legal, valid and binding obligations Of dee City,
enforceable in accordance with its terms, and that the Developer is presently is good
standing under the Agreement.
The Developer has received all approvals which are required through this date under
the Agreement in order fro the City to proceed to acquire and trsnsfar the portions of the
Premises under §§13,14 and 16 of the Agreement, for the Developer to obtain funds under
§§6 and 19 of the Agreement after February 1, 1996, and for the City to proceed with
demolition and payment for design of environmental ramdiation on the Pmnisu under §7
of the Agreement.
2. Consent to Assomment. City consents to the Developets Assignment of the
Agreement as Collateral to Lender, its successors and assigns, with right of reassignment
(the "Assignment') and the graating of a mortgage, security interest card financing statement
in the Improvements to Lender, its successors and assigns, all in so ordance with the terms
thereof, at security for Developers obligations to Lender. City hereby acknowledges receipt
of a copy of the Assignment; provided that Leader shall not be deemed by the execution of
the Assignment or by its acceptance thereof, to assume liability or became liable in any
mamma whatsoever for the performances of my of the terms and conditions of the
Agreement, unless and until Lender shall specifically assume any such obligations in writing
except as otherwise provided herein. The City shall not consent to any other assignment of
the Agreement without the written consent of Lender.
The City further recognizes and agrees thus Lender shall be a direct beneficiary, of and
shall be entitled to enforce directly against the City the envi o um mal indemnity provisions
established under §21 of the Agreement, which shall survive the payment in fall of the
Obligations secured by the Assignment.
3. Status of Improvements. City acknowledges that the Improvements, including
without limitation, buildings, site improvements, machinery, equipment, furniture and
fixtures installed or constructed by Developer or its contractors shall be the sole property of
Developer and be personal property until such time as file to the portion of the subject
Premises on which said improvements are located we conveyed of record to Developer
0. Payments and Transfers. Upon written notice from Lender that Developer bas
defaulted in its obligations to Lender beyond any applicable core period or that payment of
amounts due from the City directly to Leader is authorized under the Assignment, then the
City shall pay directly to Lender all amounts due to Developer under the Agreement and
shall continue In do m coal otherwise notified by Lender.
Furthermore, prior to any transfers of real estate composing the premises to Developer
under the Agreement, City SMI notify Lender.. The City agrees not to deliver a deed
transferring title anal such time as Lender advises that it has obtained a satisfactory
supplemental mortgage suffcimt to establish a first lien and encumbrance on the real estate
being acquired. In the event that Lender advises the City that Developer has defaulted in its
obligations to Lender beyond any applicable care period and that Lender has accelerated its
looms, City shall transfer title to the grantee designated by Leader so as m Permit an
integrated disposition of the entire Premises, which transfer may be delayed in order to
permit the completion of my foreclosure or bankruptcy proceedings.
Developer agrees that the City shall have the right to conclusively rely upon such
notice by Lender without any obligation or fight to inquire as to whether any event of
default exists or has not been cured or the sinus of the Assignment, notwithstanding any
notice or claim of Developerto the contrary. Developer shall have no fight or claim against
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the City for any amounts paid by the City m Lender or real estate transferred following
reeeipt of such notice.
5. Defanita Etc. City agrees that so long as the Assignment cr any cideruion or
renewal thereof remains outstanding, the following provisions shall apply notwithstanding
any provisions to the contrary in the Agreement:
A. City shall serve upon Lender wrinennotice ofany default by Developer under the
Agreement, either (i) as provided in the Agreement for a nofice ofde&Wt to Developer, or
(ii) in any event, not less than ten (10) days prior to any termination of the Agreement for
failure to pay monetary obligations and net less than thirty (3 0) days prior to any
termination for future to perform other obligations thereunder provided however that if
such default cannot be cured with due diligence within said 30 day period, then Lender shall
be entitled to such additional time as may be required to cure such default with due
diligence. No notice or termination shill be deemed to have been duly carried out urfess
and =61 such service is made.
B. In case Developer shall be in default under the Agreement Lender shall have the
right to remedy such default, or muse the same to be remedied within the period and
otherwise as herein provided, and City shall accept such performance by or at the instance of
Lender as if the same bad been made by Developer.
C. No event of default in respect of the performance of work required to be
performed, or of acts to be done, or of conditions to be remedied under the Agreement oras
provided in Subsection A hereunder shall be grounds for termination as against Leader if
steps shall, in good faith, have bene commenced within the time permitted therefor to rectify
Ube same and shall be prosecuted to completion with diligence and confinuity.
D. Anything contained in the Agreement to the contrary notwithstanding, upon the
occurrence of an event of default, other than an event of default due to a default in the
payment of money, City shall take no action to el a termination of the Agreement
without first giving to Lender written notice thereof as provided in Subsection A and a
reasonable time thereafter within which either (i) to obtain possession of the Premises
(including possession by a receiver), or (ii) to instimm, prosecute and complete foreclosure
proceedings or otherwise acquire Developers interest under the Agreement with diligence.
Such holder upon obtaining possession or acquiring Developefa interest under the
Agreement, shall be required promptly to cure all defaults than reasonably susceptible of
being cured by Lender. Provided, however, that: (i) Lender shall not be obligated to
continue such possession or to confine such foreclosure proceedings after such defaults
shall have been cured; (it) nothing herein contained shall preclude City, subject to the
provisions of this Agreement, from exercising any rights or remedies under the Agreement
with respect to any other default by Developer during the pendency of such foreclosure
proceedings; (iii) Lender shill agree with City in writing to comply during the period of
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such forbearance with stab of the tens, conditions and covenants of the Agreement as are
reasonably susceptible of being complied with by Leader. Any default by Developer not
reasonably susceptible of being cured by Lender on amount of insolvency or voluntary sad
involuntary insolvency or reorganization proceedings, receivership, or an assignment for the
benefit of creditors or the like shall be deemed to have been waived by City upon
completion of such foreclosure proceedings or upon such acquisition ofDevelopds interest
in the Premises, except that any of such events of default which are reasonably susceptible
of being cured after such completion and acquisition shall then be cured with seasonable
diligence. Lender, or its designee, or other purchaser in foreclosure proceedings may
.become the legal owner and holder of the Agreement through a secured parry's We in
conjunction with foreclosure promeding against the premises or by an outright assignment
of the Agreement in lieu of foreclosure.
E Any notice or otherwmmuvication which is required under the Agreement shall
be in writing and shall be served by certified mail, addressed as set forth in the Assignment
or this Agreement or at such other address as shall he designated by Lender by notice in
writing given by certified mail.
Each party may rely on the identity and address of the other parry stated herein unfit
wrinen notice of change of address is sem to the other party and duly recorded in the
Penobscot County Registry of Deeds.
F. Anything herein contained to the contrary notwithstanding, the provisions of this
Agreement shall inure only m the benefit of me holders of the Assignment.
G. No agreement between City and Developer modifying, canceling or terminating
the Agreement shall be effective without the prior written consent of Lender.
H. In the event that Lender or its designee acquires the Agreement, then Lender may
assign such lease subject to the receipt of the City's approval if required under the
Agreement, which approval shall not be unreasonably withheld, delayed or conditioned and
shall thereupon be released from all liability for the performance or observance of the
covenants and conditions in the Agreement contained on Developer's part to be performed
and observed from and after the date of such assignment, provided that the assignee from
Lender shall have assumed the Agreement.
6. Subsequent Mortgagee. Upon the request of Leader, the City agrees to enter into
a similar agreement with the holder of any subsequent mortgage covering the Premises.
I
WITNESS its hand and seal on ,199
CITY OF BANGOR, MAINE
By:
Witness
its
KEY BANK OF MAINE
By:
Witness
ns
PENOBSCOT DEVELOI
LIABILITY COMPANY
By:
Witness
Sure of Maine
County of Penobscot ss. 199_
Then personally appeared before me the above-named
in his capacity and acknowledged the foregoing to be bt�dead
o eChyof Bangor.
Before me,
Notary Publi Atlomey-at-Law
Panted Name: