UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 1, 2004
CEDAR SHOPPING CENTERS, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 0-14510 42-1241468
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NY 11050
(Address of principal executive (Zip Code)
offices)
(516) 767-6492
(Registrant's telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Purchase of Franklin Village Plaza, Franklin, MA.
On November 1, 2004, The Company, through Cedar Shopping Centers Partnership,
L.P. (the "Operating Partnership"), purchased Franklin Village Plaza, in
Franklin, MA. The property is an approximate 253,000 sq. ft. shopping center
with an adjacent approximate 36,000 sq. ft. office building. Stop & Shop is the
principal anchor tenant; other tenants include Marshalls, Radio Shack, Payless,
Bath & Body Works and Applebees. In addition, Stop & Shop has executed a lease
amendment to expand its store from approximately 55,000 sq. ft. to approximately
75,000 sq. ft.
The purchase price, including closing costs, was approximately $72.5 million.
The acquisition was funded by a $43.5 million, seven-year, 4.81% interest-only
first mortgage, with the balance funded from the Company's revolving credit
facility.
The information contained herein includes summaries, prepared by management, of
written agreements with respect to the described transactions. Such summaries
are intended to reflect and describe the terms and provisions of various
agreements with respect to such transactions and are subject in each case to the
terms and provisions of the underlying agreements, where applicable, filed
together with this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS FOR
CERTAIN PROPERTY ACQUISITIONS:
Report of Independent Registered Public Accounting Firm
Statement of Revenues and Certain Expenses
Notes to Statement of Revenues and Certain Expenses
Unaudited Pro Forma Condensed Consolidated Balance Sheet As Of June 30,
2004
Unaudited Pro Forma Condensed Consolidated Statements of Income:
For the Year Ended December 31, 2003
For the Six Months Ended June 30, 2004
Notes to Pro Forma Condensed Consolidated Financial Statements
ITEM 7. EXHIBITS:
The following exhibits are included herein:
(10.1) Agreement of Purchase and Sale by and between Roger V. Calarese and A.
Richard Calarese as Trustees of the Franklin Village Trust and
Cedar-Franklin Village, LLC, dated as of August 2, 2004;
(10.2) Amendment to Agreement of Purchase and Sale by and between Roger V.
Calarese and A. Richard Calarese as Trustees of the Franklin Village
Trust and Cedar-Franklin Village, LLC, dated as of September 2, 2004;
(10.3) Second Amendment to Agreement of Purchase and Sale by and between Roger
V. Calarese and A. Richard Calarese as Trustees of the Franklin Village
Trust and Cedar-Franklin Village, LLC, dated as of September 10, 2004;
(10.4) Third Amendment to Agreement of Purchase and Sale by and between Roger
V. Calarese and A. Richard Calarese as Trustees of the Franklin Village
Trust and Cedar-Franklin Village, LLC, dated as of September 13, 2004;
(10.5) Fourth Amendment to Agreement of Purchase and Sale by and between Roger
V. Calarese and A. Richard Calarese as Trustees of the Franklin Village
Trust and Cedar-Franklin Village, LLC, dated as of October 29, 2004;
(10.6) Limited Liability Company Agreement of Cedar-Franklin Village LLC
entered into by Cedar-Franklin Village 2 LLC as sole equity member,
Suzanne M. Hay as Springing Member 1 and Jan Koeman as Springing Member
2, dated October 22, 2004;
(10.7) Operating Agreement of Cedar-Franklin Village 2 LLC made and entered
into by Cedar Shopping Centers Partnership, L.P. dated as of October 21,
2004;
(10.8) Lease Agreement by and between Cedar-Franklin Village LLC and Calarese
Properties, Inc., dated November 1, 2004;
(10.9) Property Management Agreement by and between Cedar-Franklin Village LLC
and Calarese Properties, Inc. dated as of November 1, 2004;
(10.10) Assignment of Management Agreement and Subordination of Management Fees
by Cedar-Franklin Village LLC as Borrower and Eurohypo AG, New York
Branch as Lender, dated as of November 1, 2004;
(10.11) Independent Director's Contract by and between Cedar-Franklin Village
LLC and Suzanne M. Hay dated as of October 2004;
(10.12) Bill of Sale and General Assignment by and between Roger V. Calarese and
A. Richard Calarese as Trustees for Franklin Village Trust and
Cedar-Franklin Village LLC, executed as of November 1, 2004;
(10.13) Loan Agreement between Cedar-Franklin Village LLC as Borrower and
Eurohypo AG, New York Branch as Lender, dated as of November 1, 2004;
(10.14) Promissory Note for Cedar-Franklin Village LLC to Eurohypo AG, New York
Branch, dated November 1, 2004;
(10.15) Mortgage and Security Agreement for Cedar-Franklin Village LLC as
Borrower to Eurohypo AG, New York Branch as Lender, dated as of November
1, 2004;
(10.16) Assignment of Leases and Rents for Cedar-Franklin Village LLC as
Assignor and Eurohypo AG, New York Branch as Assignee, dated as of
November 1, 2004;
(10.17) Environmental Indemnity Agreement by Cedar-Franklin Village LLC as
Borrower and Cedar Shopping Centers Partnership, L.P. as Indemnitor in
favor of Eurohypo AG, New York Branch as Indemnitee, dated as of
November 1, 2004;
(10.18) Guaranty for Cedar Shopping Centers Partnership, L.P. as Guarantor for
the benefit of Eurohypo AG, New York Branch as Lender, executed as of
November 1, 2004;
(10.19) Supplemental Guaranty by Cedar Shopping Centers Partnership, L.P. as
Guarantor for the benefit of Eurohypo AG, New York Branch as Lender,
executed as of November 1, 2004;
(10.20) Cash Management Agreement among Cedar-Franklin Village LLC as
Borrower, Eurohypo AG, New York Branch as Lender, PNC Bank, National
Association as Agent and Calarese Properties, Inc. as Manager, dated as
of November 1, 2004;
(10.21) Cleaning Account Agreement by and among Cedar-Franklin Village LLC and
Eurohypo AG, New York Branch, dated as of November 1, 2004;
(23.1) Consent of Independent Registered Public Accounting Firm dated November
4, 2004; and
(99.1) Press Release issued by Cedar Shopping Centers, Inc. regarding the
purchase of Franklin Village Plaza, Franklin, Massachusetts, dated
November 1, 2004.
SIGNATURES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Cedar Shopping Centers, Inc.
We have audited the statement of revenues and certain expenses of
Franklin Village Plaza (the "Property") for the year ended December 31, 2003.
This financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with the Standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was
prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the
Securities and Exchange Commission for inclusion in Form 8-K of Cedar Shopping
Centers, Inc. and is not intended to be a complete presentation of the
Property's revenues and expenses.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the revenues and certain expenses of the
Property as described in Note 1 for the year ended December 31, 2003, in
conformity with U.S. generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
New York, New York
October 21, 2004
FRANKLIN VILLAGE PLAZA
STATEMENT OF REVENUES AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
2004 2003
---------------------------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Base rents (including related party
amounts of $18,000 in 2004 and
$36,000 in 2003) $ 2,722,000 $ 4,921,000
Tenant reimbursements 506,000 978,000
Other income 4,000 41,000
---------------------------------
Total revenues 3,232,000 5,940,000
---------------------------------
Certain expenses:
Real estate taxes 186,000 342,000
Property operating expenses 519,000 1,001,000
Management fees-related party 167,000 292,000
Bonus-related party 116,000 45,000
---------------------------------
Total certain expenses 988,000 1,680,000
---------------------------------
Revenues in excess of certain
expenses $ 2,244,000 $ 4,260,000
=================================
</TABLE>
See accompanying notes to financial statement.
FRANKLIN VILLAGE PLAZA
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
1. BASIS OF PRESENTATION
Presented herein is the statement of revenues and certain expenses
related to the operation of the shopping center, known as Franklin Village
Plaza, located in Franklin, MA (the "Property"). The Property consists of three
buildings and contains approximately 289,000 square feet of gross leasable area.
Cedar Shopping Centers, Inc. plans to acquire the Property in November 2004.
The accompanying financial statement has been prepared in accordance
with the applicable rules and regulations of the Securities and Exchange
Commission for the acquisition of real estate properties. Accordingly, the
financial statement excludes certain expenses because they may not be comparable
to those expected to be incurred in the proposed future operations of the
Property. Items excluded consist of interest and depreciation and amortization.
2. USE OF ESTIMATES
The preparation of the statement of revenues and certain expenses in
conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts reported in
the statement of revenues and certain expenses and accompanying notes. Actual
results could differ from those estimates.
3. REVENUE RECOGNITION
The Property is being leased to tenants under operating leases.
Minimum rental income is generally recognized on a straight-line basis over the
terms of the leases. The excess of amounts so recognized over amounts due
pursuant to the underlying leases amounted to approximately $15,000 for the year
ended December 31, 2003.
4. PROPERTY OPERATING EXPENSES
Property operating expenses for the year ended December 31, 2003
include $94,000 for insurance, $203,000 for utilities, $247,000 for repair and
maintenance costs, and $457,000 for other costs.
Property operating expenses for the six months ended June 30, 2004
(unaudited) include $52,000 for insurance, $113,000 for utilities, $109,000 for
repair and maintenance costs, and $245,000 for other costs.
5. MANAGEMENT FEES
The Property is managed by Calarese Development Corporation, a related
party, pursuant to an agreement which provides for management fees of 5% of
monthly net receipts, as defined. Management fees of approximately $292,000 for
the year ended December 31, 2003 and $167,000 (unaudited) for the six months
ended June 30, 2004 were incurred.
6. SIGNIFICANT TENANT
One tenant constituted approximately 13% of rental revenue for the
year ended December 31, 2003.
7. FUTURE MINIMUM RENTS SCHEDULE
Future minimum lease payments to be received under non-cancelable
operating leases for the years ending December 31 are as follows:
2004 $4,568,000
2005 4,210,000
2006 3,287,000
2007 2,374,000
2008 1,357,000
Thereafter 1,598,000
-----------
Total $17,394,000
===========
FRANKLIN VILLAGE PLAZA
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2003
(CONTINUED)
The lease agreements generally contain provisions for reimbursement of
real estate taxes and operating expenses, on a pro rata basis, as well as for
fixed increases in rent.
8. INTERIM UNAUDITED FINANCIAL INFORMATION
The statement of revenues and certain expenses for the six months
ended June 30, 2004 is unaudited; however, in the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) necessary for a
fair presentation of the statement of revenues and certain expenses for this
interim period have been included. The results of the interim period are not
necessarily indicative of the results to be obtained for a full fiscal year.
CEDAR SHOPPING CENTERS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2004
(UNAUDITED)
The following unaudited pro forma condensed consolidated balance sheet
is presented as if Cedar Shopping Centers, Inc. (the "Company") had acquired the
real estate assets, subject to certain liabilities, of Franklin Village Plaza,
and completed the July 2004 Preferred Stock offering, both as of June 30, 2004.
This financial statement should be read in conjunction with the unaudited pro
forma condensed consolidated statement of income and the Company's historical
financial statements and notes thereto as filed on Form 10-K for the year ended
December 31, 2003 and on Form 10-Q for the six months ended June 30, 2004. The
pro forma condensed consolidated balance sheet is unaudited and is not
necessarily indicative of what the actual financial position would have been had
the Company acquired the property and completed the July 2004 Preferred Stock
offering, both as of June 30, 2004, nor does it purport to represent the future
financial position of the Company.
<TABLE>
<CAPTION>
CEDAR SHOPPING ACQUIRED PRO FORMA PRO FORMA
CENTERS, INC. PROPERTY ADJUSTMENTS JUNE 30,
HISTORICAL (A) (B) (C)(D) 2004
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Real estate
Land $ 74,707,000 $14,502,000 $ 89,209,000
Buildings and improvements 324,947,000 58,007,000 382,954,000
------------------------------------------------------------------
399,654,000 72,509,000 472,163,000
Less accumulated depreciation (10,613,000) (10,613,000)
------------------------------------------------------------------
Real estate, net 389,041,000 72,509,000 461,550,000
Cash and cash equivalents 3,561,000 $1,399,000 4,960,000
Cash at joint ventures and restricted cash 6,591,000 127,000 6,718,000
Rents and other receivables, net 3,453,000 3,453,000
Other assets 2,847,000 133,000 2,980,000
Deferred charges, net 9,053,000 133,000 9,186,000
------------------------------------------------------------------
TOTAL ASSETS $414,546,000 $72,902,000 $1,399,000 $488,847,000
==================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage loans payable $149,049,000 $43,500,000 $192,549,000
Line of credit 75,000,000 29,159,000 ($55,250,000) 48,909,000
Accounts payable, accrued expenses, and other 5,578,000 243,000 5,821,000
Deferred liabilities 20,112,000 20,112,000
------------------------------------------------------------------
TOTAL LIABILITIES 249,739,000 72,902,000 (55,250,000) 267,391,000
------------------------------------------------------------------
Minority interests 12,139,000 12,139,000
Limited partners' interest in consolidated
Operating Partnership 4,174,000 4,174,000
Shareholders' Equity 148,494,000 56,649,000 205,143,000
------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $414,546,000 $72,902,000 $1,399,000 $488,847,000
==================================================================
</TABLE>
See accompanying notes to pro forma condensed consolidated
financial statements.
CEDAR SHOPPING CENTERS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2003
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
The following unaudited pro forma condensed consolidated
statements of income are presented as if Cedar Shopping Centers, Inc. (the
"Company") had acquired the real estate assets, subject to certain liabilities,
of Franklin Village Plaza, concluded its 2003 public offering and related
transactions, and concluded the properties acquired throughout 2003 and the
first two quarters of 2004, all as of January 1, 2003. These financial
statements should be read in conjunction with the Company's historical financial
statements and notes thereto as filed on Form 10-K for the year ended December
31, 2003 and on Form 10-Q for the six months ended June 30, 2004. The pro forma
condensed consolidated statements of income are unaudited and are not
necessarily indicative of what the actual results of operations would have been
had the Company acquired the property, concluded its 2003 public offering and
related transactions, and concluded the properties acquired throughout 2003 and
the first two quarters of 2004, all as of January 1, 2003, nor does it purport
to represent the results of operations of the Company for future periods.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 2003
-------------------------------------------------------------------
CEDAR SHOPPING COMPLETED ACQUIRED PRO FORMA
CENTERS, INC. TRANSACTIONS PROPERTY ADJUSTMENTS
HISTORICAL (A) (B) (C) (D) PRO FORMA
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 26,506,000 $21,250,000 $5,940,000 $ 141,000 $53,837,000
-------------------------------------------------------------------
Expenses:
Operating, maintenance and management 7,190,000 4,053,000 1,338,000 (155,000) 12,426,000
Real estate and other property-related taxes 2,861,000 2,062,000 342,000 5,265,000
General and administrative 3,161,000 15,000 3,176,000
Interest 9,412,000 2,496,000 3,258,000 15,166,000
Depreciation and amortization 5,023,000 3,723,000 1,469,000 10,215,000
Costs incurred acquiring external advisor 11,960,000 (11,960,000) -
Early extenguishment of debt 6,935,000 (6,935,000) -
Other 1,893,000 (1,893,000) -
-------------------------------------------------------------------
Total expenses 48,435,000 (8,439,000) 1,680,000 4,572,000 46,248,000
-------------------------------------------------------------------
Income (loss) before the following: (21,929,000) 29,689,000 4,260,000 (4,431,000) 7,589,000
Minority interests (983,000) 135,000 (848,000)
Limited partners' interest 1,637,000 (1,821,000) 5,000 (179,000)
Distributions to preferred unitholder, net of
limited partners' interest (76,000) 76,000 -
-------------------------------------------------------------------
Net income (loss) ($21,351,000) $28,079,000 $4,260,000 ($4,426,000) $ 6,562,000
===================================================================
Basic and fully diluted net income (loss)
per share ($7.09) $0.40
============= ===========
Average number of common shares outstanding 3,010,000 16,456,000
============= ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated
financial statements.
CEDAR SHOPPING CENTERS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2003
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 2004
-------------------------------------------------------------------
CEDAR SHOPPING COMPLETED ACQUIRED PRO FORMA
CENTERS, INC. TRANSACTIONS PROPERTY ADJUSTMENTS
HISTORICAL (A) (B) (C) (D) PRO FORMA
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $23,942,000 $1,585,000 $3,232,000 $26,000 $28,785,000
-------------------------------------------------------------------
Expenses:
Operating, maintenance and management 5,397,000 321,000 802,000 (185,000) 6,335,000
Real estate and other property-related taxes 2,344,000 164,000 186,000 2,694,000
General and administrative 1,627,000 1,627,000
Interest 5,099,000 535,000 1,629,000 7,263,000
Depreciation and amortization 5,556,000 345,000 734,000 6,635,000
-------------------------------------------------------------------
Total expenses 20,023,000 1,365,000 988,000 2,178,000 24,554,000
-------------------------------------------------------------------
Income (loss) before the following: 3,919,000 220,000 2,244,000 (2,152,000) 4,231,000
Minority interests (584,000) (584,000)
Limited partners' interest (89,000) (6,000) (2,000) (97,000)
-------------------------------------------------------------------
Net income (loss) $ 3,246,000 $214,000 $2,244,000 ($2,154,000) $3,550,000
===================================================================
Basic and fully diluted net income (loss)
per share $0.20 $0.22
============= ===========
Average number of common shares outstanding 16,456,000 16,456,000
============= ===========
</TABLE>
See accompanying notes to pro forma condensed consolidated
financial statements.
CEDAR SHOPPING CENTERS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2004
(a) Reflects the Company's historical balance sheet as of June 30, 2004
(unaudited), as previously filed.
(b) Reflects the acquisition of the real estate assets, subject to
certain liabilities, of Franklin Village Plaza for approximately
$72.5 million, including the issuance of a $43.5 million mortgage
note payable.
(c) Reflects the Company's public offering of 2,350,000 shares of 8-7/8%
Series A Cumulative Redeemable Preferred Stock, net of underwriting
discount and offering costs, and the contemporaneous repayment of
its secured revolving credit facility, as if these transactions were
completed as of June 30, 2004.
(d) The Company intends to account for the acquisition in accordance
with Statements of Financial Accounting Standards No. 141, "Business
Combinations", and No. 142, "Goodwill and Other Intangibles", and is
currently in the process of analyzing the fair value of the acquired
property's in-place leases. No value has yet been assigned to the
leases and, therefore, the purchase price allocation is preliminary
and subject to change.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR
ENDED DECEMBER 31, 2003
(a) Reflects the Company's historical operations for the year ended
December 31, 2003 (audited), as previously filed.
(b) Reflects the Company's 2003 public offering, related transactions
and properties acquired throughout 2003 and the first two quarters
of 2004, as if these transactions were completed as of January 1,
2003.
(c) Reflects the operations of the acquired property for the year ended
December 31, 2003.
(d) Reflects an increase in revenues (straight-line rents), interest,
depreciation and amortization, and limited partners' interest, a
reduction in management fees, and the elimination of related party
bonus with respect to the acquired property. The Company intends to
account for the acquisition in accordance with Statements of
Financial Accounting Standards No. 141, "Business Combinations", and
No. 142, "Goodwill and Other Intangibles", and is currently in the
process of analyzing the fair value of the acquired property's
in-place leases. No value has yet been assigned to the leases and,
therefore, the purchase price allocation is preliminary and subject
to change.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS
ENDED JUNE 30, 2004
(a) Reflects the Company's historical operations for the six months
ended June 30, 2004 (unaudited), as previously filed.
(b) Reflects properties acquired during the first two quarters of 2004,
as if these transactions were completed as of January 1, 2003.
(c) Reflects the operations of the acquired property for the period from
January 1, 2004 through June 30, 2004.
(d) Reflects an increase in revenues (straight-line rents), interest,
depreciation and amortization, and limited partners' interest, a
reduction in management fees, and the elimination of related party
bonus with respect to the acquired property. The Company intends to
account for the acquisition in accordance with Statements of
Financial Accounting Standards No. 141, "Business Combinations", and
No. 142, "Goodwill and Other Intangibles", and is currently in the
process of analyzing the fair value of the acquired property's
in-place leases. No value has yet been assigned to the leases and,
therefore, the purchase price allocation is preliminary and subject
to change.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
CEDAR SHOPPING CENTERS, INC.
/s/ THOMAS J. O'KEEFFE
----------------------
Thomas J. O'Keeffe
Chief Financial Officer
(Principal financial officer)
Dated: November 5, 2004
EXHIBIT 10.01
AGREEMENT OF PURCHASE AND SALE
This AGREEMENT OF PURCHASE AND SALE (the "Agreement") is made as of the
____ day of August, 2004, by and between Roger V. Calarese and A. Richard
Calarese, as trustees of the Franklin Village Trust, dated January 19, 1979, as
amended ("Seller" or the "Trust"), having an office at 1000 Franklin Village
Drive, Franklin, Massachusetts 02038, and Cedar-Franklin Village LLC, a Delaware
limited liability company ("Buyer"), having an office c/o Cedar Shopping Centers
Partnership, L.P., 44 South Bayles Avenue, Port Washington, New York 11050.
W I T N E S S E T H
A. Seller is the fee owner of that certain tract or parcel of land more
particularly described on Exhibit A attached hereto and made a part hereof,
situated in Franklin, Massachusetts (the "Land"), together with the improvements
constructed thereon and commonly known as Franklin Village Shopping Center (the
"Improvements"; the Land and the Improvements are hereinafter collectively
referred to as the "Premises). The Premises together with Seller's right, title,
and interest (and the right, title, and interest of all beneficiaries of Seller)
in and to (i) all easements, rights-of-way, privileges, appurtenances,
development rights and other rights (including, without, limitation, mineral,
oil and gas rights) pertaining to the Premises (collectively, the "Appurtenant
Rights"), (ii) (a) all land lying in the bed of any street, road or avenue
opened or proposed, public or private, in front of or adjoining the Premises,
(b) any award made or to be made in lieu thereof, (c) any unpaid award for
damage to the Premises by reason of change of grade of any street and (d) any
strips and gores adjoining or adjacent to the Premises (collectively, the
"Additional Property Rights"), (iii) all fixtures, machinery, equipment,
articles of personal property and improvements in the nature of personal
property attached or appurtenant to, or located on, or used in connection with
the use or operation of the Premises (collectively, the "Personal Property"),
(iv) all copyrights, trademarks, service marks and other marks and trade or
business names, and domain names relating to the ownership, use, operation and
management of the Premises, if any, including, without limitation, the right, if
any, to use the name "Franklin Village Shopping Center" and any similar
variations (collectively, the "Intangible Property"), (v) the Leases (as that
term is hereinafter defined) and the Service Contracts (as that term is
hereinafter defined), and all security and other deposits made under the Leases
and Service Contracts, (vi) all plans, drawings, specifications, and surveys
relating to the Premises (the "Plans and Specifications"), (vii) all guaranties
and warranties relating to the Premises (the "Guaranties and Warranties"), and
(viii) the Permits (as that term is hereinafter defined) are hereinafter
collectively referred to as the "Property").
B. Seller desires to sell and Buyer desires to purchase the Property on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto covenant and agree
as follows:
ARTICLE I
Sale and Purchase of Property
1.1 Seller agrees to sell, assign and convey to Buyer, and Buyer agrees
to purchase and assume from Seller, the Property, subject to the terms of this
Agreement.
1.2 The Premises are to be conveyed to Buyer by a deed of Seller, in
the form specified by Section 7.3.1 hereof, conveying a good and clear record
and marketable title to the same, of record and in fact, which shall also be of
such quality as Commonwealth Land Title Insurance Company, or other national
title insurance company selected by Buyer, will insure at regular rates, on the
standard ALTA form, free from all defects, liens and encumbrances, except the
following:
1.2.1 provisions of existing applicable building and zoning
laws in effect on the Closing Date, provided that the Premises, as of the
Closing Date, may be used as of right, without special permit or variance (other
than any special permits or variances which may have already been issued and
continue to be in full force and effect), as a retail shopping center and for
accessory uses related thereto;
1.2.2 such real and personal property taxes relating to the
Premises for the then current tax period, as are not yet due and payable;
1.2.3 the Leases;
1.2.4 liens for municipal betterments assessed after the date
of this Agreement (subject to Buyer's right to terminate this Agreement in
connection therewith pursuant to Section 6.1.2 hereof); and
1.2.5 such matters set forth on Exhibit B annexed hereto (such
exceptions set forth in subparagraphs 1.2.1 through 1.2.5 are collectively
referred to as the "Permitted Exceptions").
ARTICLE II
Purchase Price
2.1 Purchase Price. The purchase price (the "Purchase Price")
payable by Buyer to Seller for the Property shall be the amount of Sixty Nine
Million Eight Hundred Thousand and 00/100 Dollars ($69,800,000.00), as adjusted
pursuant to the terms of this Agreement. In the event the Prepayment
Consideration (as that tem is hereinafter defined) is less than the Estimated
Amount (as that term is hereinafter defined), the Purchase Price shall be
increased by fifty percent (50%) of the amount by which the Estimated Amount
exceeds the Prepayment Consideration.
2.2 Method of Payment. Payment of the Purchase Price shall be
made as follows:
2.2.1 Within two (2) Business Days (as that term is
hereinafter defined) after the execution and delivery of this Agreement, One
Million and 00/100 Dollars ($1,000,000.00) (the "Downpayment") by (a) wire
transfer of immediately available federal funds to the account of Escrow Agent
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(as that term is hereinafter defined) in accordance with the wire instructions
set forth on Exhibit C annexed hereto, or (b) Buyer's good unendorsed certified
check or good unendorsed official bank check payable to the order of Escrow
Agent (it being understood that Buyer shall have the option of electing the
method of payment between those described in clauses (a) and (b) above) to be
held in escrow pursuant to the provisions of Article IX hereof;
2.2.2 At the closing of the transactions contemplated hereby
(the "Closing"), the balance of the Purchase Price, subject to apportionments
and other adjustments required to be made pursuant to this Agreement (the
"Balance"), by wire transfer of immediately available federal funds to an
account or accounts designated by Seller.
2.3 Downpayment. The party or parties hereunder that shall be entitled
to receive the Downpayment shall receive all interest that shall have accrued
thereon; provided, however, that if the Closing shall occur, the amount of any
interest earned on the Downpayment shall be credited in favor of Buyer against
the Balance. The Downpayment, together with all interest thereon, shall be held
by Escrow Agent in accordance with Article IX hereof.
ARTICLE III
Disclaimer
3.1 Disclaimer of Warranties. Buyer is acquiring the Property
"AS IS" with all faults and defects. Except as specifically stated in this
Agreement, Seller hereby specifically disclaims any representation or warranty,
oral or written, including, but not limited to, those concerning (i) the nature
and condition of the Property, (ii) the manner, construction, condition and
state of repair or lack of repair of any Improvements, (iii) the compliance of
the Property or its operation with any laws, rules, ordinances, or regulations
of any government or other body, it being specifically understood that Buyer has
had the full opportunity to determine for itself the condition of the Property,
and (iv) the income and expenses of the Property. The sale of the Property as
provided for herein is made with the understanding that Buyer has inspected the
Property, is aware of the condition thereof, and has apprised itself of all
information with respect to the Property and that, except as otherwise provided
herein, the conveyance is made with the Property in an "AS IS" condition. Buyer
expressly acknowledges that in consideration of the agreements of Seller herein,
except as otherwise specified herein, SELLER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY DECLARATION OF LAW, INCLUDING,
BUT IN NO WAY LIMITED TO, ANY WARRANTY OF QUANTITY, QUALITY, CONDITION,
HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF THE PROPERTY, ANY IMPROVEMENTS, THE PERSONAL PROPERTY OR SOIL CONDITIONS.
Seller is not liable or bound in any manner by expressed or implied warranties,
guarantees, promises, statements, representations or information pertaining to
the Property made or furnished by any real estate broker, agent, employee,
servant or other Person (as that term is hereinafter defined) representing or
purporting to represent Seller unless such representations are expressly and
specifically set forth herein. For purposes of this Agreement, the term "Person"
shall mean any individual, partnership, corporation, limited liability company,
trust or other entity.
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ARTICLE IV
Seller's Representations and Covenants
4.1 Seller represents as follows:
A. The Trust is a nominee trust duly organized and validly
existing under and by virtue of the laws of the Commonwealth of Massachusetts
and is in good standing in such Commonwealth. The Trust has all requisite power
and authority to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby. Annexed hereto as Exhibit D is a true,
correct and complete copy of the Declaration of Trust of the Trust, which
Declaration of Trust has not been amended or modified, except as may be set
forth on Exhibit D.
B. The sole beneficiary of the Trust is Franklin Village
Development Limited Partnership (the "Partnership"). The Partnership is a
limited partnership duly organized and validly existing under and by virtue of
the laws of the Commonwealth of Massachusetts and is in good standing in such
Commonwealth. The Partnership has all requisite power and authority to execute,
deliver and perform the joinder annexed to this Agreement, and the documents
contemplated by this Agreement to be delivered by it. Annexed hereto as Exhibit
E is a true, correct and complete copy of the Certificate of Limited Partnership
and the Limited Partnership Agreement of the Partnership, which Certificate of
Limited Partnership and Limited Partnership Agreement have not been amended or
modified, except as may be set forth on Exhibit E.
C. Seller is the owner of the Property.
D. This Agreement (i) has been duly authorized, executed and
delivered by Seller and no other proceedings on the part of Seller are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby, and (ii) is the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms (subject to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally).
E. The execution, delivery, observance and performance by
Seller of this Agreement and the transactions contemplated hereby will not (i)
result in any violation of the organizational documents of Seller, (ii) violate
any contractual provision, law, statute, ordinance, rule, regulation, judgment,
decree or order applicable to Seller, (iii) conflict with, or cause a breach of,
or a default under, or result in a termination, modification, or acceleration
of, any obligation of Seller, or (iv) permit any other party to terminate or
modify any agreement or instrument to which Seller is a party or by which it is
bound.
F. The Premises are encumbered by a first mortgage (the
"Mortgage") securing a loan in the original principal amount of Thirty Million
and 00/100 Dollars ($30,000,000.00) (the "Mortgage Loan"), held and/or serviced
by GMAC Commercial Mortgage Corporation("Mortgagee") to Seller dated November 5,
1997. A true, correct and complete schedule of the documents evidencing the
Mortgage Loan (the "Mortgage Loan Documents") is annexed hereto as Exhibit F.
True, accurate and complete copies of the Mortgage Loan Documents have been
delivered to Buyer. The Mortgage Loan Documents are in full force and effect and
have not been amended. As of the date hereof, no default exists under any of the
Mortgage Loan Documents. The outstanding principal balance of the Mortgage Loan,
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as of May 30, 2004, was Twenty Seven Million Eight Hundred Forty Two Thousand
Nine Hundred Ninety Three Dollars and five cents ($27,842,993.05). There is no
prepayment penalty or other fee payable in connection with a voluntary
prepayment of the Mortgage Loan other than (i) the Interest Shortfall Payment
(as that term is defined in that certain Promissory Note (the "Note"), dated as
of November 5, 1997, in the amount of Thirty Million Dollars and 00/100
($30,000,000.00) made by Seller to The Chase Manhattan Bank in connection with
the Mortgage Loan), payable in the event the Mortgage Loan is prepaid on a date
other than the first day of a calendar month, and (ii) the Prepayment
Consideration (as that term is defined in the Note). In the event the Mortgage
Loan had been prepaid on May 30, 2004, the Prepayment Consideration would not
have exceeded the sum of Two Million Four Hundred Thousand Dollars (the
"Estimated Amount").
G. To Seller's knowledge, the Premises are not subject to any
mortgages, liens or encumbrances other than the Mortgage Loan and the Permitted
Exceptions.
H. No consent, approval, waiver, license, authorization or
declaration of, or filing or registration with, any Person is or will be
required in connection with the execution, delivery and performance of this
Agreement by Seller.
I. There are no contracts or agreements, written or oral, to
which Seller is a party or is bound which affect the Property and will be
binding on Buyer from and after the Closing, except those described either in
this Agreement or set forth in Exhibits to this Agreement.
J. To Seller's knowledge, the Premises are not subject to any
reciprocal easement agreements, easement agreements, or restrictive documents of
any nature other than any set forth in the Permitted Exceptions. Neither Seller,
nor, to Seller's best knowledge, any other party is in default with respect to
any of its obligations or liabilities pertaining to such reciprocal easement
agreements, easement agreements, and/or restrictive documents and the existing
Improvements and the present use and operation of the Premises do not violate
the terms of any such reciprocal easement agreements, easement agreements and/or
restrictive documents.
K. Other than ongoing construction with respect to the
widening of Route 140 over land taken by the Commonwealth of Massachusetts
pursuant to Order of Taking recorded at Norfolk County Registry of Deed on
December 6, 2000 at Book 14576, Page 061 (the "Road Widening"), there are no
takings, condemnations, betterments, assessments, actions, suits, arbitrations,
claims, attachments, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, actual or proposed, pending or,
to the best of Seller's knowledge, threatened against the Premises or Seller. To
Seller's knowledge, the Road Widening does not and will not (i) adversely affect
the use or enjoyment of the Premises as a retail shopping center, (ii) cause
Seller to be in violation of (a) any legal requirements, (b) the terms of any
Lease, or (c) the terms of any agreement or contract to which Seller is a party
or is bound affecting the Premises, or (iii) reduce (by more than one (1)
parking space), the number of parking spaces available at the Premises.
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L. No tax certiorari proceedings with respect to the Premises
are presently pending or remain outstanding.
M. Except as set forth on Exhibit G, no lawsuit, governmental
investigation or other legal action or proceeding is pending, or to Seller's
knowledge threatened, with respect to Seller and/or the Property.
N. True, correct and complete copies of the leases, licenses
or other occupancy agreements to which Seller is a party or is bound affecting
the Premises (collectively, the "Leases") and, to Seller's knowledge, subleases
affecting the Premises (collectively, the "Subleases") have been delivered to
Buyer. The information set forth on Exhibit H annexed hereto (the "Schedule of
Leases") is true, complete and correct, and the Leases and the Subleases are in
full force and effect and have not been amended, except as set forth in the
Schedule of Leases. The Schedule of Leases sets forth the amount of all security
deposits (plus accrued interest thereon, if any, required to be paid to the
respective Tenants) made by Tenants under the Leases and held by or on behalf of
the landlord thereunder. The rent roll (the "Rent Roll") annexed hereto as
Exhibit I is true, correct and complete based upon the current operation of the
Premises and the rents set forth on the Rent Roll are the rents currently being
collected. The Rent Roll accurately reflects all estimated payments made (and
scheduled to be made) on account of Overage Rent (as that term is hereinafter
defined), (both paid and payable) under the Leases. All of the landlord's
obligations under the Leases which the landlord is obligated to perform prior to
the Closing have or will have been performed.
O. Except as set forth on the Schedule of Leases:
(a) there are no other Leases or, to Seller's
knowledge, Subleases, and no Person, other
than tenants under the Leases (the
"Tenants") and subtenants under the
Subleases (the "Subtenants"), has any right
of possession of the Premises;
(b) there are no unsatisfied "Take-Over" space
obligations or "Take-Back" space obligations
("Take-Over" space obligations mean rent
obligations of the Tenant in other buildings
assumed by the landlord, and "Take-Back"
space obligations mean obligations imposed
upon the landlord to sublet or otherwise be
responsible for the obligations of a Tenant
under a Lease);
(c) there are no disputes with Tenants as to the
amount of their rental obligations;
(d) the rents set forth on the Rent Roll were
actually collected for the previous month;
(e) there are no rents under any of the Leases
that are in arrears by more than thirty (30)
days;
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(f) no Tenant or Subtenant has any option to
purchase the Premises or to cancel its Lease
or Sublease (other than as set forth in the
applicable Lease or Sublease);
(g) Seller has not received from any Tenant any
written notice claiming any default by the
landlord under its Lease which has not been
complied with, and Seller has not delivered
to Tenant any written notice claiming a
default by Tenant under a Lease which has
not been complied with, and, to the best
knowledge of Seller, there are no
circumstances which, after notice and the
expiration of any applicable grace period,
would constitute a default by either the
landlord or any Tenant under the Leases;
(h) except as set forth in the applicable
Leases, no Tenant has any right of first
offer, right of first refusal, option or
other preferential right to expand its
premises, and no Tenant has any option or
other preferential right to renew or extend
the term of such Tenant's Lease; and
(i) no Tenant has asserted offsets or claims
against, or has any defense to, rental
payable or obligations under such Tenant's
Lease.
P. Seller has no reason to believe that any Tenant is or may
become unable or unwilling to perform any or all of such Tenant's obligations
under its Lease (other than Tenants known as Weathervane, Toy Works, and
Cambridge Eye, which have filed for bankruptcy protection and the Tenant known
as Golf, U.S.A., which is in arrears on its rent by more than six (6) months, as
more particularly set forth on the Rent Roll). No guarantor of any of the Leases
has been released or discharged voluntarily (or, to the best of Seller's
knowledge either involuntarily or by operation of law) from any obligation
related to the Lease. Except in connection with the proposed expansion (the
"Stop & Shop Expansion") of the leased premises occupied by the Tenant known as
The Stop & Shop Supermarket Company ("Stop & Shop"), to be performed pursuant to
the terms and conditions of that certain Third Amendment of Lease, dated as of
April 2, 2004, between Seller and Stop & Shop (the "Stop & Shop Amendment") and
the related work to be done in connection with the relocation of (i) the Tenant
known as Village Mall Liquors, Inc. ("Village Liquors") to be performed pursuant
to the Stop & Shop Amendment and terms and conditions of the Amendment to Lease,
dated as of April 5, 2004, between Seller and Village Liquors (the "Village
Liquors Amendment"), and (ii) the Tenant known as Hairs Boston ("HB") to be
performed pursuant to the Stop & Shop Amendment and the terms and conditions of
that certain lease dated as of May 7, 2004, between Seller and HB (the "New HB
Lease"), all of the improvements to be constructed by the landlord, if any,
contemplated under the Leases or as required therein and in all collateral
agreements and plans and specifications respecting same have been completed as
so required, and any fees, costs, allowances, advances or other expenses to be
paid by the landlord for tenant improvements or tenant finish work have been
paid in full. Neither the Leases nor any of the rentals due or to become due
under the Leases has been or will be, at the Closing, assigned or encumbered by
the landlord thereunder or subject to any liens. As of the date hereof, Seller
has not received the payments from Stop & Shop contemplated by the Stop & Shop
Amendment in connection with the Village Liquor relocation. As of the date
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hereof, Seller has incurred approximately $75,000 in connection with the
performance of work in connection with the work contemplated by the Stop & Shop
Amendment for which Seller has not, as of the date hereof, been reimbursed by
Stop & Shop (the "Unreimbursed Stop & Shop Costs").
Q. The only other Tenants that will be required to relocate as
a result of the Stop & Shop Expansion are Village Liquors and HB. Seller has the
right (i) under the Village Liquors Amendment to relocate Village Liquors to the
New Premises (as that term is defined in the Liquor Store Lease Amendment).
Pursuant to its previous lease with Seller (which has recently expired), HB
occupied space which will, pursuant to the terms of the Stop & Shop Amendment,
be demised to Stop & Shop. The New HB Lease demises alternate space to HB (as
more particularly set forth in the New HB Lease), which alternate space is
unaffected by the Stop & Shop Expansion.
R. There are no management, service, supply, equipment rental
and similar agreements affecting the Premises, and there are no month-to-month
service arrangements on expired or automatic renewable contracts (collectively,
the "Service Contracts") which will bind the Premises, Buyer or Seller after the
Closing other than the Service Contracts set forth on Exhibit J annexed hereto
(the "Schedule of Service Contracts"). True, correct and complete copies of the
Service Contracts set forth on the Schedule of Service Contracts have been
delivered to Buyer. Neither Seller, nor, to Seller's best knowledge, any other
party is in default with respect to any of its obligations or liabilities
pertaining to the Service Contracts set forth on the Schedule of Service
Contracts. Except as set forth on Exhibit J, all of the Service Contracts set
forth on the Schedule of Service Contracts may be terminated without penalty or
payment by Seller on no more than thirty (30) days' notice.
S. Except in connection with the Mortgage Loan, the interests
of Seller in the Property have not been pledged or transferred.
T. There are no outstanding options to purchase, rights of
first offer, rights of first refusal, warrants, calls, commitments, conversion
rights, rights of exchange, plans or other agreements of any character, absolute
or contingent, to acquire all, or any portion of, the Property except for the
right of first refusal granted to Stop & Shop pursuant to the provisions of its
Lease (the "Stop & Shop ROFR"). Seller has given effective notice to Stop &
Shop, in form and substance required pursuant to the provisions of Stop & Shop's
Lease, of the transactions contemplated by this Agreement. Stop & Shop must give
notice on or before August 9, 2004 (the "Outside Date") as to whether or not it
elects to exercise the Stop & Shop ROFR. In the event Stop & Shop fails to give
such notice prior to the Outside Date, the Stop & Shop ROFR shall be deemed to
have been waived by Stop & Shop. (If Stop & Shop exercises the Stop & Shop ROFR
on or before the Outside Date (a "ROFR Exercise"), the date of such exercise is
referred to herein as the "Stop & Shop Exercise Date". If Stop & Shop gives
notice that it waives the right to exercise the Stop & Shop ROFR or is deemed to
have waived the right to exercise the Stop & Shop ROFR (a "ROFR Waiver"), the
date of such waiver or deemed waiver is referred to herein as the "Stop & Shop
Waiver Date").
U. As of the date hereof, Seller has not entered into any
brokerage agreements or lease commission agreements other than those agreements
described on Exhibit K annexed hereto. No leasing commission is now or will
8
hereafter become due or owing in connection with any of the Leases, including,
without limitation, in connection with any renewals or extensions of the term
thereof, except as disclosed in Exhibit K annexed hereto.
V. The Personal Property has not been assigned or conveyed to
any other party (other than as security for the Mortgage Loan).
W. Except in connection with possible violations on the
Premises with respect to concentrations in groundwater of petroleum products
resulting from the release and/or discharges of same occurring on adjacent
property owned by Exxon Mobil Corporation (the "Exxon Mobil Investigation"),
Seller has not received written notice of any violation at the Premises of laws
relating to Hazardous Materials (as that term is hereinafter defined). To
Seller's knowledge, except as may be disclosed on the Existing Reports, no
Hazardous Materials are now or have ever been, located, produced, used, stored,
treated, transported, incorporated, discharged, emitted, released, deposited or
disposed of in, upon, under, over or from the Premises in a manner that may give
rise to any actual or potential liability to pay response costs or other
damages, losses or expenses or otherwise violate any Environmental Laws (as that
term is hereinafter defined). Seller does not and has not located, stored, or
used Hazardous Materials at the Premises and, to Seller's knowledge, no
Hazardous Materials are currently located, stored or used at the Premises,
except with respect to such Hazardous Materials which are contained in or
constitute maintenance, cleaning and landscaping supplies or other materials as
may be customarily used by Tenants in the ordinary course of their business
conducted at the Premises, in each case used and stored in accordance with
Environmental Laws. Except in connection with the Exxon Mobile Investigation, no
written notice of any violation or any alleged violation of any Environmental
Laws has been issued or given by any Governmental Authority (as that term is
hereinafter defined) which remains uncured. To Seller's knowledge there does not
currently exist any investigation or report involving the Premises by any
Governmental Authority or agency which in any way relates to Hazardous Materials
except in connection with the Exxon Mobil Investigation. Except in connection
with the Exxon Mobil Investigation, there are not currently pending or, to
Seller's best knowledge, threatened any actions, suits, proceedings or damage
settlements relating in any way to Hazardous Materials in, upon, under, over or
from the Premises. For purposes of this Agreement, the term "Hazardous
Materials" shall mean (a) any toxic substance, hazardous waste, hazardous
substance or related hazardous material; (b) asbestos in any form which is or
could become friable, urea formaldehyde foam insulation, transformers or other
equipment which contain dielectric fluid containing levels of polychlorinated
biphenyls in excess of presently existing federal, state or local safety
guidelines, whichever are more stringent; and (c) any substance, material or
chemical which is defined as or included in the definition of "hazardous
substances", "toxic substances", "hazardous materials", "hazardous wastes" or
words of similar import under any federal, state or local statute, law, code, or
ordinance or under the regulations adopted or guidelines promulgated pursuant
thereto, including, but not limited to, the Environmental Laws. For purposes of
this Agreement, the term "Environmental Laws" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. ss.9061, et seq.; the Hazardous Materials Transportation Act, as amended,
49 U.S.C. ss.1801, et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss.6901, et seq.; and the Federal Water Pollution Control
Act, as amended, 33 U.S.C. ss.1251, et seq., as any of the foregoing may be
amended from time to time, and any other federal, state and local laws and
regulations, codes, statutes, orders, decrees, guidance documents, judgments or
9
injunctions, now or hereafter issued, promulgated, approved or entered
thereunder, relating to pollution, contamination or protection of the
environment, including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
For purposes of this Agreement, the term "Governmental Authority" shall mean the
United States government, any state, regional, local or any other political
subdivision of any of the foregoing, and any agency, department, commission,
board, court bureau or instrumentality of any of them having jurisdiction over
the Property or Seller.
X. There are no underground storage tanks located on or under
the Land.
Y. Seller has delivered to Buyer a true, correct and complete
copy of the (i) Phase I Environmental Site Assessments of the Premises, dated
August 14, 1997, and prepared by Aqua Terra Environmental Services Corp., (ii)
the Phase I Environmental Site Assessment of the Premises dated June, 1986, and
prepared by Goldberg-Zoino & Associates, and (iii) and copies of all information
in Seller's possession with respect to the Exxon Mobil Investigation (the
"Existing Reports"). The Existing Reports are the only reports within Seller's
possession or control that have been prepared in connection with studies or
investigations of the environmental condition of the Premises.
Z. To Seller's knowledge and except as may be determined in
connection with the Exxon Mobil Investigation, the Property complies in all
material respects with all applicable Legal Requirements (as that term is
hereinafter defined). To Seller's knowledge, all Permits (as that term is
hereinafter defined) required by any Governmental Authority for the operation of
the Property and the actual and contemplated uses thereof, or otherwise required
to be in compliance with any Environmental Laws, have been obtained and are
transferable with the Premises to Buyer without charge. To Seller's knowledge,
all Permits are in full force and effect and Seller has not received written
notice of any pending or threatened modification or cancellation of any of the
same. Exhibit L annexed hereto sets forth the Permits held by Seller with
respect to the Property. For purposes of this Agreement, the term "Legal
Requirements" shall mean any law, statute, ordinance, order, rule, regulation,
decree or other requirement of a Governmental Authority, and all conditions of
any Permit. For purposes of this Agreement, the term "Permits" shall mean all
approvals, consents, registrations, franchises, permits, licenses, variances,
certificates of occupancy and other authorizations with regard to zoning,
landmark, ecological, environmental, air quality, subdivision, planning,
building or land use required by any Governmental Authority for the
construction, lawful occupancy and operation of the Improvements and the actual
use thereof.
AA. Seller has heretofore delivered to Buyer true and complete
copies of all income and expense statements, year-end financial and operating
statements and existing and proposed budgets for the Property (collectively, the
"Operating Statements") for the previous three (3) calendar years and for the
current year to date, all of which, with the exception of the proposed budgets,
have been reviewed by an independent certified public accountant Seller has no
knowledge of any inaccuracies or omissions contained in the Operating
Statements. The Operating Statements are correct and complete in all respects
and present fairly the financial position of the Property. Since the date of the
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Operating Statements, there has been no material change to any Operating
Statement.
BB. There are, and at the Closing there will be, no employees
and no employment contracts, operating agreements, listing agreements,
consulting agreements, union contracts, labor agreements, pension plans, profit
sharing plans or employee benefit plans which relate to Seller or the Property
(collectively "Employment Agreements").
CC. Seller maintains insurance with respect to the Property as
set forth on Exhibit M annexed hereto. Seller has not received any written
notice from any insurance company which has issued a policy with respect to the
Property or from Mortgagee requesting or requiring performance of any structural
or other major repair or alteration to the Property which has not been complied
with.
DD. Neither the Partnership nor the Trust is a "foreign
person" as defined pursuant to Section 1445 of the Internal Revenue Code of
1986, as amended.
EE. To Seller's knowledge the parking facilities at the
Premises contain an adequate number of striped parking spaces to comply with all
Legal Requirements and with all parking commitments contained in any Lease.
FF. The list of the Plans and Specifications set forth on
Exhibit N is true, correct and complete. True, correct and complete copies of
the Plans and Specifications have been delivered to Buyer.
GG. The Premises are served by adequate municipal utility
services, including the municipal sewer system.
All of the representations and warranties of Seller set forth in this
Agreement and any Exhibit attached hereto, or in any letter or certificate
furnished to Buyer pursuant to the terms hereof, each of which is incorporated
herein by reference and made a part hereof, shall be true and correct upon the
execution of this Agreement in all material respects, and, except as set forth
below, shall be deemed to be repeated at and as of the Closing Date and shall be
true and correct as of the Closing Date. The representations, warranties and
agreements set forth in this Article shall survive the Closing for a period of
one (1) year, unless a claim shall be made with respect thereto within such one
(1) year period, in which event the representation, warranty or agreement giving
rise to such claim shall survive the Closing with respect to such claim until
resolution with respect to such claim, provided the resolution of such claim is
being pursued diligently by Buyer. If (i) any of the representations and
warranties contained in this Agreement that are qualified with "Seller's
knowledge" or words of similar import would have been untrue or incorrect in any
material respect had they not been so qualified, or (ii) Buyer has actual
knowledge on or before the Closing Date that any of the representations or
warranties given by Seller are untrue or incorrect in any material respect on
the Closing Date (and the same shall not have resulted from an intentional
misrepresentation or breach of warranty by Seller), then notwithstanding
anything to the contrary contained in this Agreement, Buyer shall have the right
prior to the Closing, as its sole remedy, exercisable by delivery of written
notice to Seller, to terminate this Agreement (in which event Buyer shall be
entitled to, and Escrow Agent shall return to Buyer, the Downpayment, and
11
following such return no party hereto shall have any further obligations in
connection herewith except under those provisions that expressly survive the
termination of this Agreement). If any of the representations and warranties
given by Seller are untrue or incorrect in any material respect on the Closing
Date (and same shall have resulted from an intentional misrepresentation or
breach of warranty by Seller), Buyer shall also have the right, as aforesaid, to
terminate this Agreement and receive a return of the Downpayment, but, in such
event, the provisions set forth in the last sentence of Section 10.2.1 shall
govern. In the event any of Seller's representations and warranties set forth
herein shall not be true and correct in all material respects, and Buyer shall
have knowledge of the same prior to Closing, and Buyer shall, thereafter, close
title to the Property, then, in such case, the provisions of Section 10.2.2
shall govern.
4.2 Seller hereby covenants and agrees with Buyer as follows:
4.2.1 At all times up to the Closing Date, Seller shall cause
to be maintained insurance upon the Premises in the same coverages and amounts
as the insurance policies on the Premises on the date hereof.
4.2.2 At all times up to the Closing Date, Seller shall
operate and maintain the Premises in substantially the same manner as it is now
operated and maintained, and Seller shall use reasonable efforts to maintain the
physical condition of the Premises in its current condition, reasonable and
ordinary wear and tear and damage by fire and casualty excepted.
4.2.3 Seller shall neither transfer nor remove any Personal
Property or fixtures from the Premises subsequent to the date hereof, unless the
same are no longer needed for the maintenance and operation of the Premises or
except for purposes of replacement thereof, in which case such replacements
shall be promptly installed prior to Closing and shall be comparable in quality
to the items being replaced.
4.2.4 Seller shall not without the prior written consent of
Buyer (i) enter into any Lease or modify, renew, extend, replace, terminate or
otherwise change any of the terms, conditions or covenants of any existing
Lease, or (ii) consent to any Sublease or any modification, renewal,
replacement, termination or other change of any of the terms, conditions or
covenants of any existing Sublease. Buyer agrees not to unreasonably withhold
consent to any such actions by Seller provided that the same reflect market
rents and terms and conditions.
4.2.5 Seller shall terminate prior to the Closing all Service
Contracts that Buyer requests be so terminated (provided that said Service
Contracts are, by their terms, so terminable without fee or penalty to Seller,
unless Buyer shall have agreed to pay any such fee or penalty).
4.2.6 Seller shall not enter into any Service Contracts or
modify, renew, extend, replace or otherwise change any of the terms, conditions
or covenants of any existing Service Contract after the date hereof without the
prior written consent of Buyer, which consent may be granted or withheld in
Buyer's sole discretion.
4.2.7 Seller shall not enter into any Employment Agreements
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's sole discretion.
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4.2.8 Seller shall not, except to the extent required by the
Stop & Shop Expansion, amend or modify any Permits with respect to the Premises
and shall keep in full force and effect and/or renew all Permits.
4.2.9 Seller shall timely comply with all Legal Requirements.
4.2.10 Seller shall pay all obligations and trade creditors in
the normal course of business and not defer any expenses or costs which would be
paid or incurred in the normal course of business.
4.2.11 Seller shall not, without the written consent of Buyer,
convey any interest, directly or indirectly, in the Property, or any portion
thereof.
4.2.12 Seller shall not create, assume, incur or suffer to
exist any lien (other than the Permitted Exceptions) against the Premises.
4.2.13 Seller shall use good faith efforts to obtain the
Tenant Estoppel Certificates and the Manager Termination and the Release (as
those terms are defined in Section 7.2.1).
4.2.14 Seller shall not bring (or knowingly permit to be
brought) any Hazardous Materials in, upon, under, over or from the Premises in
violation of Environmental Laws.
4.2.15 Seller shall not remove or dispose of (or knowingly
permit to be removed or disposed of) any Hazardous Materials in, upon, under,
over or from the Premises in violation of Environmental Laws.
4.2.16 Seller shall not hereafter engage any new employees for
Seller or the Premises.
4.2.17 Seller shall make all payments as required by the
Mortgage Loan and shall repay the Mortgage Loan in full on the Closing Date from
the proceeds of the Balance and shall cause the Mortgage to be released and
discharged in connection with the Closing.
4.2.18 Seller shall, at Buyer's sole cost and expense,
cooperate with Buyer with regard to any financing that is arranged for by Buyer
in connection with the transactions contemplated by this Agreement, and Seller
will execute all documents reasonably required pursuant to such financing,
provided same do not impose cost or liability on Seller.
4.2.19 Seller shall not collect any rent under any Lease more
than one (1) month in advance.
4.2.20 Seller shall give notice to Buyer of a ROFR Exercise or
a ROFR Waiver, as applicable, within two (2) days of the occurrence of same.
4.2.21 Seller shall not make any material alterations to the
Premises except in connection with the Stop & Shop Expansion.
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4.3 Buyer represents as follows:
4.3.1 Buyer is a limited liability company, duly organized,
validly existing and in good standing under the laws of Delaware; and
4.3.2 Buyer has the legal right, power and authority to enter
into this Agreement and to perform all of its obligations hereunder and the
execution and delivery of this Agreement and the performance by Buyer of its
obligations hereunder (i) have been duly authorized by all requisite action of
the members of Buyer and (ii) will not conflict with, or result in a breach of,
any of the terms, covenants and provisions of the organizational documents of
Buyer, or, to the best of Buyer's knowledge, of any judgment, writ, injunction
or decree of any court or governmental authority, or any agreement or instrument
to which Buyer is a party or by which it is bound.
ARTICLE V
Brokerage
5.1 The parties agree that T.R.B. & Associates, Inc. (the "Broker") is
the broker in connection with this transaction, and Seller agrees to pay any
commission payable to the Broker in connection with this transaction by separate
agreement.
5.2 Buyer hereby agrees to indemnify, defend and hold Seller
harmless from and against any and all claims, losses, liability, costs and
expenses (including reasonable attorneys' fees) resulting from any claim that
may be made against Seller by any broker (other than the Broker), or any other
person claiming a commission, fee or other compensation by reason of this
transaction, if the same shall arise by, through or on account of any alleged
act of Buyer or Buyer's representatives.
5.3 Seller hereby agrees to jointly and severally indemnify,
defend and hold Buyer harmless from and against any and all claims, losses,
liability, costs and expenses (including reasonable attorneys' fees) resulting
from any claim that may be made against Buyer by any broker (including the
Broker), or any other person, claiming a commission, fee or other compensation
by reason of this transaction, if the same shall arise by, through or on account
of any alleged act of Seller or Seller's representatives.
5.4 The indemnification obligations under this Article V shall
survive the Closing or a termination of this Agreement.
ARTICLE VI
Title and Due Diligence
6.1 Title.
6.1.1 Title Report; Title Objections. Buyer shall order a
title insurance report and commitment (the "Commitment") for the Title Policy
(as that term is hereinafter defined) from a title company selected by Buyer
(the "Title Company") and shall promptly upon receipt thereof, but no later than
thirty (30) days from the date hereof, furnish a copy of the Commitment to
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Seller's attorneys. Upon receipt of any updates or revisions to the Commitment,
Buyer shall furnish copies thereof to Seller's attorneys (the Commitment and any
updates or revisions thereto are hereinafter collectively referred to as the
"Report"). Within thirty (30) days from the receipt of the Commitment (and,
thereafter, within thirty (30) days from the receipt of any update or revision
thereto), Buyer shall deliver to Seller a statement setting forth exceptions to
title which are not Permitted Exceptions reflected in the Commitment or in any
such update or revision thereto (the "Title Objections"). Any exception to title
reflected in the Commitment or in any update or revision thereto which is not
objected to within such thirty (30) day period shall be deemed to be a Permitted
Exception.
6.1.2 Encumbrances to Eliminate. Seller shall be required to
eliminate (a) all mortgages, (b) unpaid water charges and assessments, (c) any
Title Objections which have been voluntarily created, suffered or incurred by
Seller including, without limitation, liens, judgments and encumbrances (such
Title Objections, collectively, "Subsection (c) Encumbrances"), and (d) any
other Title Objections which are in a liquidated amount and which may be
satisfied by the payment of money, other than a lien for municipal betterments
that is assessed after the date of this Agreement (such other Title Objections,
collectively, "Subsection (d) Encumbrances"); provided, however, that Seller
shall not be required to spend in excess of One Hundred Thousand Dollars
($100,000.00) in the aggregate to eliminate (i) any Subsection (c) Encumbrances
arising or accruing prior to the date hereof, and (ii) any Subsection (d)
Encumbrances. Notwithstanding the foregoing, in the event (i) a Subsection (c)
Encumbrance affects the Premises or (ii) a lien for municipal betterments is
assessed against the Premises between the date hereof and the Closing and, in
either event, Seller is unable or unwilling to remove the same, and, provided
the existence of the same does not otherwise constitute (or arise as a result
of) a default hereunder, if the same does not affect the use and enjoyment by
Buyer of the Premises, Seller shall not be required to eliminate the same (but,
in any such event, Buyer shall have the rights set forth in Section 6.1.3 with
respect to such Title Objection). Buyer has notified Seller of the possible
existence of a Conservation Restriction (the "Conservation Restriction"), which,
if same exists, would affect approximately 4.17 acres of an unimproved portion
of the Premises. In the event the Conservation Restriction affects the Premises,
Seller shall not be required to eliminate same (but Buyer shall have the rights
set forth in Section 6.1.3 with respect thereto).
6.1.3 Other Exceptions. Except as set forth in Section 6.1.2
above, Seller shall not be required to bring any action or institute any
proceeding, or to otherwise incur any costs or expenses in order to attempt to
eliminate any Title Objections. If Seller fails to eliminate any and all Title
Objections (other than those encumbrances set forth in Section 6.1.2 above which
Seller shall be obligated to remove), then Buyer may elect to (i) accept the
Property subject to such exceptions, and Buyer shall close hereunder, without
reduction of the Purchase Price, notwithstanding the existence of the same, and
Seller shall have no obligations whatsoever after the Closing Date with respect
to Seller's failure to eliminate such exceptions, or (ii) terminate this
Agreement by notice given to Seller, in which event Buyer shall be entitled to a
return of, and Escrow Agent shall promptly deliver, the Downpayment to Buyer.
Upon such return and delivery, this Agreement shall terminate and neither party
hereto shall have any further obligations hereunder other than pursuant to those
provisions that expressly survive a termination of this Agreement.
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6.1.4 Right to Adjourn. Notwithstanding anything to the
contrary contained herein, if Seller is unable to eliminate any Title Objections
which Seller is obligated to eliminate pursuant to the provisions of this
Agreement by the Closing Date, Seller, in order to attempt to eliminate such
Title Objections, may adjourn the Closing to a date no later than thirty (30)
days following the Scheduled Closing Date. Promptly after Seller has eliminated
all such Title Objections, if any, Seller shall reschedule the Closing Date,
upon at least three (3) Business Days prior notice to Buyer.
6.2 Liens, Judgments and Encumbrances. If, at the Closing, the
Property is subject to any mortgage or mortgages, unpaid taxes, water charges
and assessments, or any other liens, judgments and encumbrances, then the
existence thereof shall not constitute a Title Objection provided that such
mortgage(s), unpaid taxes, water charges and assessments, or any other liens,
judgments and encumbrances are paid by Seller to the Title Company and the Title
Company shall omit the same from the Title Policy.
6.3 Affidavits. If the Report discloses judgments, bankruptcies or
other returns against other persons having names the same as, or similar to,
that of Seller, then Seller shall deliver to the Title Company affidavits
showing that such judgments, bankruptcies or other returns are not against
Seller in order to induce the Title Company to omit exceptions with respect to
such judgments, bankruptcies or other returns.
6.4 Violations. Notwithstanding anything to the contrary contained
herein, Seller shall cure and eliminate (and pay all related fines and penalties
and any accrued interest thereon), at Seller's cost and expense, any violations
assessed against the Property as of the Closing Date.
6.5 Due Diligence Reviews. Except for title matters (which shall be
governed by the provisions of Sections 6.1 through 6.4 hereto), Buyer shall have
until 5:00 p.m. (Eastern time) on the date which is thirty five (35) days from
the Stop & Shop Waiver Date (provided, however, that if Buyer shall not have
received notice from Seller of the occurrence of a ROFR Waiver within the time
period provided by subsection 4.2.20 hereof, Buyer shall have until 5:00 p.m.
(Eastern time) on the date which is thirty (30) days from the date Buyer shall
have received notice from Seller of the ROFR Waiver), TIME BEING OF THE ESSENCE
(the period of time commencing upon the date hereof and continuing through and
including such time on such date being herein called the "Due Diligence Period")
within which to perform and complete all of Buyer's due diligence examinations,
reviews and inspections of all matters pertaining to the Property, including the
review of Leases, Subleases, Service Contracts, Employment Agreements, and all
physical, environmental and compliance matters and conditions respecting the
Premises, including, without limitation, title review (collectively, the
"Investigations"), which Investigations shall at all times be subject to Buyer's
compliance with the provisions of this Section 6.5. During the Due Diligence
Period, Seller shall provide Buyer and the Consultants with access to the
Premises upon reasonable advance notice to Seller (which notice may be delivered
by telephone to Roger Calarese at (508) 528-3700. Seller shall also make
available to Buyer and the Consultants, at the offices of Seller, on at least
one (1) Business Day's prior notice to Seller (which notice may be delivered by
telephone to Roger Calarese at (508) 528-3700, during reasonable times as
mutually agreed upon by Seller and Buyer, access to such Leases, Subleases,
Service Contracts, Employment Agreements, other contracts, books, records and
other documentation with respect to the Property and such books and records of
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Seller as Buyer reasonably requires in order to examine or audit the books and
records of Seller with respect to the Property, and Seller shall lend its
reasonable assistance to Buyer and the Consultants in connection with the
Investigations.
6.6 Termination Right. If, on or before the expiration of the Due
Diligence Period, Buyer shall determine, in its sole and absolute discretion and
for any reason or for no reason, that it no longer intends to acquire the
Property, then Buyer shall promptly notify Seller of such determination in
writing on or before 5:00 p.m. (Eastern time) on the date that the Due Diligence
Period shall expire (such notice being herein called the "Termination Notice"),
whereupon Buyer shall be entitled to a return of, and Escrow Agent shall
promptly deliver to Buyer, the Downpayment, and upon such delivery this
Agreement and the obligations of the parties hereunder shall terminate (and no
party hereto shall have any further obligations in connection herewith except
under those provisions that expressly survive the Closing or a termination of
this Agreement). In the event that Buyer shall fail to have delivered the
Termination Notice to Seller on or before 5:00 p.m. (Eastern time) on the date
that the Due Diligence Period shall expire, Buyer shall be deemed to have agreed
that the foregoing matters are acceptable to Buyer and that it intends to
proceed with the acquisition of the Property without a reduction in, or an
abatement in or credit against, the Purchase Price (and, thereafter, Buyer shall
have no further right to terminate this Agreement pursuant to this Section 6.6).
6.7 Stop & Shop ROFR. In the event Stop & Shop exercises the
Stop & Shop ROFR on or before the Outside Date, Buyer shall be entitled to a
return of, and Escrow Agent shall promptly deliver to Buyer, the Downpayment,
and upon such delivery this Agreement and the obligations of the parties
hereunder shall terminate (and no party hereto shall have any further
obligations in connection herewith except under those provisions that expressly
survive the Closing or a termination of this Agreement).
6.8 Ongoing Site Visits. Buyer and its agents, contractors, consultants
and representatives ("Consultants") shall have reasonable access to the Premises
on at least one (1) Business Day's prior notice to Seller (which notice may be
delivered by telephone to Roger Calarese at (508) 528-3700), during reasonable
times as mutually agreed upon by Seller and Buyer solely for the purpose of (i)
inspecting the physical and structural condition of the Premises and conducting
non-intrusive physical inspections and tests (non-intrusive physical inspections
and tests shall include, for example, taking de minimis samples of building
materials), and (ii) monitoring the ongoing operations of the Premises
(including, without limitation, the performance by Tenants of their respective
obligations under the Leases). If Buyer desires to conduct any intrusive
physical inspections and tests, including a Phase II environmental inspection of
the Premises, then Buyer shall identify in writing the procedures Buyer desires
to perform and request Seller's consent. If Seller objects to the inspections
and tests requested by Buyer, then Seller shall describe the basis for its
objection to Buyer and propose to Buyer a reasonable alternative for resolving
the issue giving rise to Buyer's request for intrusive physical inspections or
tests. If Seller consents to the inspections and tests requested by Buyer, then
Buyer and Consultants shall, in performing intrusive physical inspections or
tests, (a) comply with any and all statutes, laws, ordinances, rules and
regulations applicable to the Premises, (b) restore the Premises to the
condition, in all material respects, in which the same was found before
inspection or testing was undertaken, but in no event later than ten (10)
17
Business Days after such inspection or testing occurs, and (c) carry and provide
to Seller evidence of such insurance as Seller may reasonably request.
6.9 Interviews. Buyer may communicate or conduct interviews with any
Tenant without the requirement of having received the prior consent of Seller;
provided, however, that with respect to any interview to be conducted at the
Premises, Buyer shall notify Seller (which notice may be delivered by telephone
to Roger Calarese at (508) 528-3700 at least one (1) Business Day in advance of
any such interview and provided further that Buyer shall not conduct interviews
with Major Tenants (as that term is hereinafter defined ) without first
providing Seller with telephonic notice of such interview at least one (1)
Business Day in advance and providing Seller with the opportunity to be present
at such interview. With respect to interviews conducted at the Premises, any
such interview shall not unreasonably disrupt or disturb (i) the on-going
operation of the Premises, or (ii) the quiet possession of Tenants.
ARTICLE VII
The Closing
7.1 Closing Date.
7.1.1 The transaction contemplated herein shall be consummated
at the Closing which shall take place at the offices of Seller or at such other
place as shall be mutually agreed upon by Seller and Buyer on the date which is
thirty (30) days after the expiration of the Due Diligence Period (the
"Scheduled Closing Date"; the actual date of the Closing being herein referred
to as the "Closing Date"). The parties acknowledge that Seller desires that the
Closing occur within the last three (3) Business Days of a calendar month.
Accordingly, in the event the Scheduled Closing Date is not within such three
(3) Business Day period, same shall be, upon notice by Seller to Buyer,
adjourned to one of the last three (3) Business Days of the calendar month in
which the Scheduled Closing Date occurs (which notice shall designate the
particular date scheduled for the Closing).
7.2 Conditions to the Closing.
7.2.1 Conditions Precedent to Buyer's Obligations. The Closing
and Buyer's obligations with respect to the transaction contemplated by this
Agreement are subject to the satisfaction of the following conditions, and the
obligations of the parties with respect to such conditions are as follows:
A. Title. Upon payment of all premiums by the party
responsible for such cost pursuant to the terms of Section 8.3 hereof, the Title
Company shall be willing to issue a title insurance policy insuring in Buyer
good and marketable fee title to the Property (subject only to the Permitted
Exceptions), and otherwise be in accordance with the provisions of Article VI
hereof (the "Title Policy").
B. Tenant Estoppel Certificates. Seller shall request and
Buyer shall have received estoppel certificates certified to Seller and Buyer
(and, if requested by Buyer, Buyer's lending institution), and dated not more
than thirty (30) days prior to the Closing Date ("Tenant Estoppel Certificates")
duly executed by (i) each Major Tenant (as that term is hereinafter defined) and
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(ii) such other Tenants so that Tenant Estoppel Certificates shall have been
received from Tenants occupying, in the aggregate, at least 80% of the rentable
square footage of the Improvements (the foregoing condition, the "Estoppel
Condition"). "Major Tenants" mean those Tenants set forth on Exhibit O annexed
hereto. The Tenant Estoppel Certificates shall be in the form of and upon the
terms set forth on Exhibit P annexed hereto. Seller shall deliver the original
executed Tenant Estoppel Certificates to Buyer as and when the same shall be
delivered to Seller, but in no event later than one (1) Business Day prior to
the Closing Date. If any Tenant Estoppel Certificate shall have been modified or
qualified in any fashion that, individually or in connection with other Tenant
Estoppel Certificates, reveals facts, conditions or circumstances which result
or may result in a material adverse change in the financial condition of the
Property, or are inconsistent in any material respect with the representations
of Seller set forth in Section 4.1 above, then Buyer may disapprove the same
(such disapproved Tenant Estoppel Certificates, the "Unacceptable Certificates")
by notice delivered to Seller promptly following Buyer's receipt of such
Unacceptable Certificate, and, for purposes of establishing whether the Estoppel
Condition has been satisfied, any Unacceptable Certificates shall be deemed not
to have been received. In the event Seller the Tenant Estoppel Certificate
delivered by either Stop & Shop or the Tenant known as Marshalls Department
Store ("Marshalls"), is deemed to be an Unacceptable Certificate as a result of
the fact that it fails to include certifications with respect to all of the
matters set forth on Exhibit P, Seller shall deliver to Buyer a supplementary
certification, in the form of Exhibit P, with respect to those matters contained
in Exhibit P (other than the certification with respect to subordination), which
are not included in the Unacceptable Certificate delivered by Marshalls and/or
Stop & Shop (any such certificate, a "Seller's Certificate"). Seller shall not
be obligated, in the Seller's Certificate, to make certifications which are
inconsistent with the representations of Seller set forth in Section 4.1 above.
C. Manager Termination. Buyer shall have received a
termination (the "Manager Termination and Release") of the management agreement
entered into with Calarese Development Corporation ("Existing Property Manager")
duly executed by Existing Property Manager and Seller to be dated as of the
Closing Date. The Manager Termination and Release shall be substantially in the
form set forth in Exhibit Q annexed hereto.
D. Representations, Warranties and Covenants of Seller. Seller
shall have duly performed each and every agreement to be performed by Seller
under this Agreement and Seller's representations, warranties and covenants set
forth in this Agreement shall be true and correct as of the Closing Date.
E. No Material Changes. On the Closing Date, there shall have
been no material adverse changes in the physical condition or operating results
of the Property.
F. Seller's Deliveries. Seller shall have delivered the items
described in Section 7.3 below.
The conditions set forth in this Section 7.2.1 are solely for the
benefit of Buyer and may be waived only by Buyer. Buyer shall at all times have
the right to waive any condition. Such waiver or waivers shall be in writing.
The waiver by Buyer of any condition shall not relieve Seller of any liability
or obligation as respects any representation, warranty or covenant of Seller
(other than to the extent provided in Section 10.2.2 hereof). Neither Seller nor
Buyer shall act or fail to act for the purpose of permitting or causing any
19
condition to fail (except to the extent Buyer, in its own discretion, exercises
its right to disapprove or not to waive any such items or matters). The
occurrence of the Closing shall constitute approval by Buyer of all matters to
which Buyer has a right of approval under this Agreement and a waiver of all
conditions precedent under this Agreement.
7.2.2 Conditions Precedent to Seller's Obligations. The
Closing and Seller's obligations with respect to the transaction contemplated by
this Agreement are subject to the satisfaction of the following conditions and
the obligations of the parties with respect to such conditions are as follows:
A. Buyer's Deliveries. Buyer shall have delivered the items
described in Section 7.4 below.
B. Covenants of Buyer. Buyer shall have duly performed each
and every agreement to be performed by Buyer under this Agreement.
The conditions set forth in this Section 7.2.2 are solely for the
benefit of Seller and may be waived only by Seller. Seller shall at all times
have the right to waive any condition. Such waiver or waivers shall be in
writing. The waiver by Seller of any condition shall not relieve Buyer of any
liability or obligation as respects any covenant of Buyer unless Seller shall so
agree in writing. Neither Seller nor Buyer shall act or fail to act for the
purpose of permitting or causing any condition under this Section 7.2.2 to fail
(except to the extent Seller, in its own discretion, exercise its right not to
waive any such items or matters). The occurrence of the Closing shall constitute
approval by Seller of all matters to which Seller has a right of approval under
this Agreement and a waiver of all conditions precedent under this Agreement.
7.3 At the Closing, Seller shall cause to be delivered each of the
following items to Buyer, duly executed by the Partnership and/or the Trust,
as and to the extent applicable:
7.3.1 A deed substantially in the form of Exhibit R attached
hereto and made a part hereof conveying fee simple title in the Premises to
Buyer or Buyer's designee;
7.3.2 An assignment and assumption of leases for the Premises
(the "Assignment and Assumption of Leases") substantially in the form of Exhibit
S attached hereto and made a part hereof;
7.3.3 With respect to those Service Contracts that Buyer shall
not have elected to terminate, an assignment and assumption of service contracts
for the Premises (the "Assignment and Assumption of Service Contracts")
substantially in the form of Exhibit T attached hereto and made a part hereof;
7.3.4 A bill of sale and general assignment for the Premises
substantially in the form of Exhibit U attached hereto and made a part hereof;
7.3.5 Duly executed and sworn affidavits of the nature
contemplated by Section 6.3 hereof, as reasonably required by the Title Company;
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7.3.6 A certification of non-foreign status substantially in
the form of Exhibit V attached hereto and made a part hereof;
7.3.7 Requisite affidavits and consents, in form reasonably
satisfactory to Buyer and the Title Company, indicating that Seller is
authorized to complete the transaction contemplated by this Agreement,
including, without limitation, an incumbency certificate for each of the
individuals executing a document on behalf of Seller.
7.3.8 The Tenant Estoppel Certificates.
7.3.9 If applicable, the Seller's Certificate.
7.3.10 If applicable, documentation regarding Unreimbursed
Stop & Shop Costs existing on the Closing Date, as described in Section 8.5
hereof.
7.3.11 The Manager Termination and Release.
7.3.12 A management agreement, substantially in the form of
Exhibit W attached hereto and made a part hereof, between Buyer and an entity
owned and controlled by Roger Calarese (the "New Management Agreement").
7.3.13 An Affidavit from Seller in accordance with the
provisions of Section 1445 of the Internal Revenue Code of 1986, as amended.
7.3.14 A Direction of Beneficiary, substantially in the form
of Exhibit X attached hereto and made a part hereof.
7.3.15 A Certificate of Trustees, substantially in the form of
Exhibit Y attached hereto and made a part hereof.
7.3.16 A certificate of Seller, dated as of the Closing Date,
certifying that all of the representations and warranties of Seller set forth in
Section 4.1 hereof are true and correct in all material respects as of the
Closing Date (or, if all of the representations are not so true and correct, and
Buyer has elected, nevertheless, to proceed to Closing, a statement, specifying,
with respect to such representations and warranties, the respects in which the
same are not true and correct).
7.3.17 The Plans and Specifications.
7.3.18 All sums required to be paid by Seller under this
Agreement.
7.4 At the Closing, Buyer shall cause to be delivered each of the
following items, duly executed by Buyer, if applicable:
7.4.1 The Balance, in the manner provided in Sections 2.2.2
and 2.2.3 hereof;
7.4.2 The Prepayment Consideration;
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7.4.3 The Assignment and Assumption of Leases;
7.4.4 The Assignment and Assumption of Service Contracts; and
7.4.5 The New Management Agreement.
7.5 Casualty and Condemnation.
7.5.1 Condemnation
A. If, prior to the Closing Date, all or any "material"
portion of the Premises is taken by eminent domain or condemnation (or is the
subject of a pending or contemplated eminent domain or condemnation proceeding
which has not been consummated), then Seller shall notify Buyer of such fact,
and Buyer shall have the option:
(i) to terminate this Agreement, in which event the Escrow
Agent shall return the Downpayment to Buyer, and, thereupon no party hereto
shall have any further obligations in connection herewith except under those
provisions that expressly survive a termination of this Agreement; or
(ii) to accept title to the Property without any abatement of
the Purchase Price.
B. In the event of the taking of a portion of the Premises
that is not "material", or if a "material" portion is so taken, but Buyer elects
to accept title to the Premises, Seller shall assign and turn over to Buyer at
the Closing, and Buyer shall be entitled to receive and keep, all amounts
awarded or to be awarded as the result of the taking. In either of such events,
(a) Seller shall not, prior to Closing, settle any action or claim with respect
to any eminent domain or condemnation proceeding without Buyer's prior written
consent, and (b) Seller agrees to cooperate with Buyer in good faith in
connection with all eminent domain and condemnation proceedings including,
without limitation, executing all documents and instruments necessary to allow
Buyer, following the Closing, to settle all actions and claims and collect all
sums in connection therewith.
7.5.2 Casualty.
A. If, prior to the Closing Date, all or any "material"
portion of the Premises is damaged or destroyed or otherwise affected by a fire
or other casualty, then Seller shall notify Buyer of such fact, and Buyer shall
have the option:
(i) to terminate this Agreement, in which event the Escrow
Agent shall return the Downpayment to Buyer, and, thereupon, no party hereto
shall have any further obligations in connection herewith except under those
provisions that expressly survive the termination of this Agreement; or
(ii) to accept title to the Property in its existing condition
without any abatement of the Purchase Price, in which event Seller shall pay and
assign to Buyer, at the Closing, all of Seller's right, title and interest in
and to the insurance proceeds awarded or to be awarded to Seller as the result
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of such damage or destruction, and Buyer shall receive a credit for any
deductible under Seller's insurance policies. In such event, (y) Seller shall
not, prior to Closing, settle any insurance claim without Buyer's prior written
consent and (z) Seller agrees to cooperate with Buyer in good faith in
connection with the settlement of all insurance claims including, without
limitation, executing all documents and instruments necessary to allow Buyer,
following the Closing, to settle and collect all sums in connection therewith.
7.5.3 A "material" part of the Premises shall be deemed to
have been taken by eminent domain or condemnation, or damaged or destroyed or
otherwise affected by a fire or other casualty, if (a) the value of the Premises
(as reasonably determined by Buyer) shall be reduced by an amount equal to or
greater than Two Hundred Thousand Dollars ($200,000.00) or (b) as a result
thereof, access to the Premises shall be materially and adversely affected (as
reasonably determined by Buyer) or the remaining available number of parking
spaces shall be less than the minimum legally or contractually required or (c)
if Tenants occupying more than Ten Thousand (10,000) square feet of gross
leasable area have the right to terminate their Leases in connection with such
taking by eminent domain or condemnation or casualty.
7.5.4 The provisions of this Section 7.5 shall survive the
Closing.
ARTICLE VIII
Prorations and Adjustments
8.1 The following prorations and adjustments shall be made between the
parties as of 11:59 p.m. on the day preceding the Closing Date (the "Proration
Date") on the basis of the actual number of days elapsed over the applicable
period:
A. (i) All fixed rents and estimated payments on account of
Overage Rent under Leases which are collected on or prior to the Proration Date
in respect of the month (or other applicable collection period) in which the
Closing occurs (the "Current Month"), shall be adjusted on a per diem basis
based upon the number of days in the Current Month prior to the Proration Date
and the number of days in the Current Month on and after the Proration Date.
(ii) If, on the Proration Date, any fixed rents are past due
by any Tenant, and provided Seller has delivered to Buyer, in reasonable detail,
a breakdown of all such past due amounts as of the Proration Date, then Buyer
agrees that the first moneys received from each such Tenant shall be disbursed
as follows:
(1) first, such moneys shall be applied to fixed rents in
respect of the Current Month, it being agreed that one hundred percent (100%) of
the fixed rent that is attributable to the portion of the Current Month prior to
the Proration Date shall go to Seller and the balance shall go to Buyer;
(2) second, to Buyer until all fixed rents owing by all such
Tenants for any period after the Current Month through the month in which
payment is received have been paid in full;
(3) third, to Seller until all fixed rents owing by all such
Tenants for periods prior to the Current Month have been paid in full; and
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(4) fourth, the balance, if any, shall go to Buyer.
Each party agrees to remit reasonably promptly to the other the amount
of such rents to which such party is so entitled and to account to the other
party monthly in respect of same. The fixed rents received by Buyer and/or
Seller after the Proration Date shall be apportioned and remitted, if
applicable, as hereinabove provided.
Notwithstanding anything herein contained to the contrary, Buyer shall
use reasonable efforts to collect both fixed rent and Overage Rent which is past
due on the Proration Date. In the event that any such rent is not collected
within ninety (90) days from the Closing Date, Seller may use reasonable efforts
to collect the same in its own name and Buyer shall cooperate, in all reasonable
respects, with Seller in attempting to collect the same; provided, however,
Seller shall not take any actions which result in the dispossession of any
Tenant or the termination of any Lease. Seller shall be permitted to take any
action it deems appropriate with respect amounts past due from former tenants of
the Premises, and Buyer shall have no interest therein. Additionally, Seller
shall be entitled to receive proceeds, if any, from bankruptcy proceedings
relating to the Tenants known as Weathervane, Toy Works, and Cambridge Eye, in
the amounts set forth on the Rent Roll, and Buyer shall have no interest
therein.
(iii) If the Proration Date shall occur prior to the time when
any rental payments for percentage rent fuel pass-alongs, so-called escalation
rent or charges based upon real estate taxes, insurance, operating expenses,
labor costs, cost of living increases, electrical charges, water and sewer
charges or like items (collectively, "Overage Rent") are payable, then such
Overage Rent for the applicable accounting period in which the Proration Date
occurs shall be apportioned subsequent to the Closing, based upon the portion of
such accounting period which occurs prior to the Proration Date (to the extent
not theretofore collected by Seller, on account of such Overage Rent prior to
the Proration Date), it being agreed that one hundred percent (100%) of the
Overage Rent that is attributable to the portion of such accounting period that
shall occur prior to the Proration Date shall belong to Seller and the balance
shall belong to Buyer. In addition, Buyer shall pay to Seller one hundred
percent (100%) of all Overage Rent that is paid subsequent to the Proration Date
with respect to an accounting period which expired prior to the Proration Date,
within thirty (30) days after receipt thereof by Buyer. Seller has collected
payment from Tenants under Leases in advance on account of insurance carried by
Seller with respect to the Premises for the one (1) year period ending March 28,
2005. Such pre-payments shall be apportioned at the Closing on a per diem basis
based upon the actual number of days in the period with respect to which said
insurance relates prior to the Proration Date and the number of days in such
period on and after the Proration Date.
(iv) Overage Rent and any percentage rent payable by Tenants
based on an estimated amount and subject to adjustment or reconciliation
pursuant to the related Leases subsequent to the Proration Date shall be
apportioned as provided in subsection (iii) above and shall be re-apportioned as
and when the applicable Tenant's actual obligation for such Overage Rent is
reconciled pursuant to the applicable Lease.
B. All real estate taxes, unmetered water and sewer charges, fire
protection and hydrant charges, elevator inspection fees, and vault charges, if
any, and any and all other municipal or governmental assessments of any and
every nature levied or imposed upon the Property (collectively, "Taxes") in
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respect of the current fiscal year of the applicable taxing authority in which
the Closing occurs (the "Current Tax Year") (other than real estate taxes, water
and sewer charges and any other municipal or governmental assessments payable by
any Tenant directly to the taxing authority under any Lease), shall be allocated
on a per diem basis based upon the number of days in the Current Tax Year prior
to the Proration Date and the number of days in the Current Tax Year on and
after the Proration Date. If, as of the Proration Date, Taxes for the Current
Tax Year shall not have been paid with respect to the period prior to the
Proration Date, then the amount equal to the unpaid Taxes for the period prior
to the Proration Date shall be paid by Seller to Buyer at the Closing. If the
Closing shall occur before the tax rate for the Current Tax Year is fixed, then
the apportionment of Taxes shall be upon the basis of the tax rate for the next
preceding fiscal period applied to the latest assessed valuation. Promptly after
the new tax rate is fixed for the fiscal period in which the Closing takes
place, the apportionment of Taxes shall be recomputed. In the event that any
assessments levied or imposed upon the Property are payable in installments, the
installment for the Current Tax Year shall be prorated in the manner set forth
above.
C. All charges and fees due under contracts for the supply to the
Premises of heat, steam, electric power, gas and light and telephone
(collectively, "Charges"), if any, in respect of the billing period of the
related service provider in which the Closing occurs (the "Current Billing
Period") shall be allocated on a per diem basis based upon the number of days in
the Current Billing Period prior to the Proration Date and the number of days in
the Current Billing Period on and after the Proration Date and assuming that all
charges are incurred uniformly during the Current Billing Period. If, as of the
Proration Date, Charges for the Current Billing Period shall not have been paid
with respect to the period prior to the Proration Date, then the amount equal to
the unpaid Charges for the period prior to the Proration Date shall be paid by
Seller to Buyer at the Closing.
D. Any charges or fees for transferable licenses and permits relating
to the Property (but without duplication of items apportioned pursuant to any
other provision of this Article VIII) (collectively, "Permit Charges") in
respect of the Current Billing Period shall be allocated on a per diem basis
based upon the number of days in the Current Billing Period prior to the
Proration Date and the number of days in the Current Billing Period on and after
the Proration Date and assuming that all charges are incurred uniformly during
the Current Billing Period. If, as of the Proration Date, Permit Charges for the
Current Billing Period shall not have been paid with respect to the period prior
to the Proration Date, then the unpaid Permit Charges for the period prior to
the Proration Date shall be paid by Seller to Buyer at the Closing.
E. Any charges payable under Service Contracts being assigned to Buyer
at the Closing (but without duplication of items apportioned pursuant to any
other provision of this Article VIII) (collectively, "Service Contract
Charges"), in respect of the Current Billing Period shall be allocated on a per
diem basis based upon the number of days in the Current Billing Period prior to
the Proration Date and the number of days in the Current Billing Period on and
after the Proration Date and assuming that all charges are incurred uniformly
during the Current Billing Period. If, as of the Proration Date, Service
Contract Charges for the Current Billing Period shall not have been paid with
respect to the period prior to the Proration Date, then an amount equal to the
unpaid Service Contract Charges for the period prior to the Proration Date shall
be paid by Seller to Buyer at the Closing.
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F. If there is a fuel meter or meters on the Premises (other than
meters measuring consumption costs which are the obligation of any Tenants),
then Seller shall endeavor to furnish a reading to a date not more than thirty
(30) days prior to the Proration Date, and the unfixed meter charges, if any,
based thereon for the intervening time shall be apportioned on the basis of such
last reading. If Seller fails or is unable to obtain such reading, then the
amount equal to the value of all fuel, if any, then stored at the Property shall
be calculated on the basis of Seller's last costs therefor, including sales tax,
as evidenced by written statements of the fuel oil supplier(s) for the Premises,
which statements shall be conclusive as to quantity and cost, absent fraud. Any
unpaid fuel charges attributable to the period prior to the Proration Date shall
be paid by Seller to Buyer at the Closing.
G. If there is a water meter or meters on the Property (other than
meters measuring consumption costs which are the obligation of any Tenants),
then Seller shall endeavor to furnish a reading to a date not more than thirty
(30) days prior to the Proration Date, and the unfixed meter charges and the
unfixed sewer rents, if any, based thereon for the intervening time shall be
apportioned on the basis of such last reading. If Seller fails or is unable to
obtain such reading, then the amount of the meter charges and sewer rents shall
be determined on the basis of the last readings and bills received by Seller,
and the same shall be appropriately readjusted after the Closing on the basis of
the next subsequent bills. Any unpaid water or sewer charges attributable to the
period prior to the Proration Date shall be paid by Seller to Buyer at the
Closing.
H. Any other items customarily apportioned in connection with sales of
similar property in the Commonwealth of Massachusetts shall be so apportioned.
8.2 If any of the items described in this Article VIII cannot be
apportioned at the Closing because of the unavailability of information as to
the amounts which are to be apportioned or otherwise, or are incorrectly
apportioned at Closing or subsequent thereto, such items shall be apportioned or
reapportioned, as the case may be, as soon as practicable after the Proration
Date or the date such error is discovered, as applicable. The parties shall make
the appropriate adjusting payment between them within thirty (30) days after
presentment of the calculation. All books and records of Seller which relate to
the Property, and particularly to any items to be prorated or allocated under
this Agreement in connection with the Closing, shall be made available to both
Seller and Buyer and their respective employees, agents and representatives. Any
such inspection shall be at reasonable intervals, during business hours, upon
reasonable notice, and at the inspecting party's sole cost and expense.
8.3 Closing Costs. Buyer shall pay the title insurance premium for the
Title Policy and the cost of all endorsements to the Title Policy. Seller and
Buyer shall pay their respective legal, consulting and professional fees and
expenses incurred in connection with this Agreement and the transaction
contemplated hereby.
8.4 Tenant Costs. All brokerage commissions and expenses for work to be
done for tenant improvements other than expenses for tenant improvement work to
be done in connection with the Stop & Shop Expansion (and the relocation of
Village Liquors and HB) in connection with any leases entered into on or prior
to the date hereof which commissions and expenses were not paid prior to the
Proration Date shall be paid by Seller to Buyer at the Closing. In the event
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Seller, with Buyer's consent, enters into any lease after the date hereof, all
brokerage commissions and expenses for work to be done for tenant improvements
in connection with any such lease shall be paid by Buyer to Seller at the
Closing (provided that Buyer instructed or authorized Seller to incur such cost
or that such cost was specifically contemplated by the terms of such lease to be
paid by the landlord thereunder).
8.5 Costs relating to Stop & Shop Expansion (and the relocation of
Village Liquors and HB). At the Closing, Seller shall deliver to Buyer an
accounting, and reasonably detailed back-up for Seller's then existing
Unreimbursed Stop & Shop Costs. Buyer agrees that it shall use its commercially
reasonable efforts, without obligation to incur cost or expense or to commence
dispossess proceeding, to recover such Unreimbursed Stop & Shop Costs from Stop
& Shop and shall, upon Buyer's receipt of same, promptly forward same to Seller.
The parties acknowledge that Stop & Shop is obligated, pursuant to the terms of
the Stop & Shop Amendment, to make payments to the owner of the Premises on
account of the costs resulting from the Village Liquor relocation. To the extent
the reasonable and actual costs incurred by Buyer in connection with the
performance of the work contemplated by the Village Liquor Amendment and the HB
Lease, exceeds the amounts for which Stop & Shop is, pursuant to the terms of
the Stop & Shop Amendment, responsible, Buyer shall provide an accounting and
reasonably detailed back-up with respect thereto, and Seller shall promptly
reimburse Buyer for same. If Seller has performed work pursuant to the Village
Liquor Amendment prior to the Closing, Seller shall, on or before the Closing
Date, provide an accounting, and reasonably detailed back-up with respect
thereto. Upon the receipt by Buyer of final funds from Stop & Shop on account of
the Village Liquor relocation pursuant to the Stop & Shop Amendment, Buyer shall
promptly reimburse Seller for the reasonable and actual costs incurred by
Seller, but only to the extent that the funds so provided by Stop & Shop exceed
the reasonable and actual costs incurred by Buyer in connection with performance
of work contemplated by the Village Liquor Amendment and the HB Lease.
8.6 Existing Property Management Agreement. All accrued fees pursuant
to the Existing Property Management Agreement shall be paid by Seller at or
prior to Closing..
8.7 Transfer Tax. All transfer, stamp tax, or other similar taxes
attributable to the sale of the Property shall be paid by Seller and shall be
paid contemporaneously with the Closing.
8.8 Prepayment Consideration and Interest Shortfall Payment. The
payment of Prepayment Consideration shall be paid by Buyer at the Closing. The
payment of the Interest Shortfall Payment and any other fees or sums relating to
the repayment of the Mortgage Loan shall be paid by Seller at the Closing.
8.9 Survival. Notwithstanding anything to the contrary contained
herein, the provisions of this Article VIII shall survive the Closing.
ARTICLE IX
Escrow Terms
9.1 Depository. The Downpayment shall be held in escrow by Commonwealth
Land Title Insurance Company ("Escrow Agent"), in a special interest bearing
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commercial bank account, designated as a "trust account" or an "escrow account",
at JPMorgan Chase Bank (or its successor) in New York, New York.
9.2 Escrow Instructions. If the Closing takes place, then Escrow Agent
shall deliver the Downpayment to, or upon the instructions of, Seller at the
Closing. If this Agreement is terminated in accordance with the terms hereof,
then, subject to Section 9.4 hereof, Escrow Agent shall pay the Downpayment to,
or upon the instructions of, the party entitled thereto in accordance with the
provisions of this Agreement. If the Closing does not occur by reason of the
failure of either party to comply with such party's obligations hereunder, then,
subject to Section 9.4 hereof, Escrow Agent shall pay the Downpayment to, or
upon the instructions of, the party entitled thereto in accordance with the
provisions of this Agreement.
9.3 Scope of Duties. The duties of Escrow Agent shall be only as herein
specifically provided, and are purely ministerial in nature. Escrow Agent shall
incur no liability whatever except for willful misconduct or gross negligence,
as long as Escrow Agent has acted in good faith. Seller and Buyer acknowledge
that Escrow Agent is serving without compensation and solely as an accommodation
to the parties hereto. Escrow Agent shall not be liable or responsible for the
funds being held in escrow or for the collection of the proceeds of the check
for the Downpayment or for the interest earned thereon. In the performance of
its duties hereunder, Escrow Agent shall be entitled to rely upon the
authenticity of any signature and the genuineness and validity of any writing
received by Escrow Agent pursuant to or otherwise relating to this Agreement.
Escrow Agent may assume that any Person purporting to give any notice or
instructions in accordance with the provisions hereof has been duly authorized
to do so. Escrow Agent shall not be bound by any modification, cancellation or
rescission of this Agreement unless (i) such modification, cancellation or
rescission is in writing and signed by Seller and Buyer, and (ii) a copy of such
modification, cancellation or rescission is delivered to Escrow Agent. Escrow
Agent shall not be bound in any way by any other contract or understanding
between the parties hereto, whether or not Escrow Agent has knowledge thereof or
consents thereto, unless such consent is given in writing.
9.4 Dispute. Escrow Agent is acting as a stakeholder only with respect
to the Downpayment and the interest earned thereon. If a party requests
disbursement of the Downpayment for any reason other than the Closing having
occurred, then Escrow Agent shall give written notice to the other party of such
request. Such other party shall have the right to dispute the disbursement of
the Downpayment to the requesting party only by delivering notice thereof to
Escrow Agent on or prior to the tenth (10th) day after the date when Escrow
Agent gives such notice. Notwithstanding anything to the contrary contained
herein, Escrow Agent shall not disburse the Downpayment until the day
immediately following the last day of such ten (10) day period. If there is any
dispute as to whether Escrow Agent is obligated to deliver the Downpayment or as
to whom said Downpayment is to be delivered, then Escrow Agent shall not make
any delivery, but in such event Escrow Agent shall hold the same until Escrow
Agent receives (a) notice from the objecting party withdrawing the objection, or
(b) a notice signed by both parties directing disposition of the Downpayment, or
(c) a non-appealable judgment or order of a court of competent jurisdiction. If
such notice is not received, or proceedings for such determination are not
begun, within thirty (30) calendar days after the date set forth herein for the
Closing (as the same may have been changed by agreement of the parties) and
diligently continued, then Escrow Agent shall have the right to (w) hold and
retain all or any part of the Downpayment until such dispute is settled or
28
finally determined by litigation, arbitration or otherwise, or (x) deposit the
Downpayment, together with the interest earned thereon, in an appropriate court
of law, following which Escrow Agent shall thereby and thereafter be relieved
and released from any liability or obligation under this Agreement, or (y)
institute an action in interpleader or other similar action permitted by
stakeholders in the Commonwealth of Massachusetts, or (z) interplead any of the
parties in any action or proceeding which may be brought to determine the rights
of the parties to all or any part of the Downpayment.
9.5 Indemnity. Seller and Buyer hereby agree to, jointly and severally,
indemnify, defend and hold Escrow Agent harmless from and against any
liabilities, damages, losses, costs or expenses incurred by, or claims or
charges made against, Escrow Agent (including reasonable counsel fees and court
costs) by reason of Escrow Agent's acting or failing to act in connection with
any of the matters contemplated by this Agreement or in carrying out the terms
of this Agreement, except as a result of Escrow Agent's bad faith, gross
negligence or willful misconduct. This Section 9.5 shall not limit the right of
Buyer and Seller to assert claims against each other with respect to said
indemnity.
9.6 Release from Liability. Upon the disbursement of the Downpayment,
together with the interest earned thereon, in accordance with this Agreement,
Escrow Agent shall be relieved and released from any liability hereunder.
9.7 Resignation. Escrow Agent may resign at any time upon at least ten
(10) days prior written notice to the parties hereto. If, prior to the effective
date of such resignation, the parties hereto shall all have approved, in
writing, a successor escrow agent, then upon the resignation of Escrow Agent,
Escrow Agent shall deliver the Downpayment, together with the interest earned
thereon, to such successor escrow agent. From and after such resignation and the
delivery of the Downpayment, together with the interest earned thereon, to such
successor escrow agent, Escrow Agent shall be fully relieved of all of its
duties, responsibilities and obligations under this Agreement, all of which
duties, responsibilities and obligations shall be performed by the appointed
successor escrow agent. If for any reason the parties hereto shall not approve a
successor escrow agent within such period, then Escrow Agent may bring any
appropriate action or proceeding for leave to deposit the Downpayment, together
with the interest earned thereon, with a court of competent jurisdiction,
pending the approval of a successor escrow agent, and upon such deposit Escrow
Agent shall be fully relieved of all of its duties, responsibilities and
obligations under this Agreement.
9.8 Execution of Agreement by Escrow Agent. Escrow Agent has executed
this Agreement solely to confirm that Escrow Agent has received a check (subject
to collection) or a wire transfer for the Downpayment and shall hold the
Downpayment in escrow, pursuant to the provisions of this Agreement.
9.9 Loss of Downpayment. Escrow Agent shall not have any liability or
obligation for loss of all or any portion of the Downpayment by reason of the
insolvency or failure of the institution of depository with whom the escrow
account is maintained.
9.10 Taxpayer Identification Numbers. Each Seller and Buyer represents
that its respective taxpayer identification number is as set forth on Exhibit Z
annexed hereto.
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ARTICLE X
Remedies
10.1 Buyer Default.
10.1.1 If Buyer shall default in the payment of the Balance,
then Seller may terminate this Agreement and retain the Downpayment. Buyer
acknowledges that, if Buyer shall default under this Agreement as aforesaid,
then Seller will suffer substantial adverse financial consequences as a result
thereof. Accordingly, Seller's sole and exclusive remedy against Buyer shall be
the right to retain the Downpayment, as and for its sole and full and complete
liquidated damages, it being agreed that Seller's damages are difficult, if not
impossible, to ascertain, and Buyer and Seller shall have no further rights or
obligations under this Agreement, except those expressly provided herein to
survive the termination of this Agreement.
10.1.2 In the event the Closing occurs, the foregoing
provisions of Section 10.1.1 shall not prevent Seller from pursuing a
post-Closing action against Buyer relating to Article V, Article VIII, or
Section 11.16 hereof.
10.2 Seller Default
10.2.1 If Seller shall default hereunder for any reason in the
performance of any of its covenants or obligations under this Agreement , then
Buyer may, as its sole remedy, elect to either (x) terminate this Agreement, and
direct the Escrow Agent to return the Downpayment to Buyer, and, upon such
return, Buyer and Seller shall have no further rights or obligations under the
Agreement, except those expressly provided herein to survive the termination of
this Agreement, or (y) require Seller to convey such title to the Property as
Seller is then able to convey or prosecute an action for specific performance of
this Agreement requiring Seller to convey such title to the Property as Seller
is then able to convey. In the event (i) Buyer elects to terminate this
Agreement, as aforesaid , as a result of a default by Seller hereunder, if such
default shall result from or relate to (A) an intentional failure or refusal by
Seller to close title, or (B) an intentionally breach by Seller of a covenant
hereunder, or (ii) any of the representations or warranties given by Seller in
this Agreement are untrue or incorrect in any material respect on the Closing
Date (and same results from an intentional misrepresentation or breach of
warranty by Seller), Seller shall pay to Buyer all reasonable and actual third
party costs incurred by Buyer in connection with this Agreement and the
transactions contemplated to occur hereunder, up to a maximum amount of One
Hundred Thousand Dollars ($100,000.00).
10.2.2 If (1) Seller shall default in the performance of any
of its covenants or obligations under this Agreement, and Buyer shall have
actual knowledge of such default prior to Closing, and Buyer shall thereafter
close title to the Property, or (2) any of Seller's representations and
warranties set forth herein shall not be true and correct in all material
respects, and Buyer shall have actual knowledge of such default prior to the
Closing, and Buyer shall thereafter close title to the Property, then, in either
such case, Buyer shall thereafter have no right to bring any action or
proceeding for damages against Seller arising by reasons of any such default or
misrepresentation (the right to bring such actions or proceedings being
expressly and voluntarily waived by Buyer following and upon advice of its
counsel).
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10.2.3 If (1) Seller shall default in the performance of any
of its covenants or obligations under this Agreement, and Buyer shall first have
actual knowledge of such default after the Closing, or (2) any of Seller's
representations and warranties set forth herein shall not be true and correct in
all material respects, and Buyer shall first have actual knowledge of such
default after the Closing, Buyer shall have the right to bring an action for
damages against Seller. Notwithstanding the foregoing, Buyer shall not have the
right to bring such action in the event Buyer's actual damages are less than
Fifty Thousand Dollars ($50,000.00) (the "Threshold Amount"), but, in the event
Buyer's damages are equal to or exceed the Threshold Amount, Buyer shall have
the right to bring such action for the full amount of Buyer's damages (including
the portion of such damages constituting the Threshold Amount). The concept of
the Threshold Amount shall not apply with respect to any post-Closing action
relating to Article V, Article VIII, or Section 11.16 hereof.
ARTICLE XI
Miscellaneous
11.1 Survival. Except as expressly provided herein, all
representations, warranties, covenants and agreements of Buyer and Seller
contained in this Agreement shall merge into the documents executed at Closing
and shall not survive the Closing.
11.2 Notices. Any notice required or permitted to be delivered herein
shall be deemed to be delivered (a) when received by the addressee if delivered
by courier service, (b) if mailed, two (2) days after deposit in the United
States Mail, postage prepaid, certified mail, return receipt requested, (c) if
sent by recognized overnight service (such as US Express Mail, Federal Express,
UPS, Airborne, etc.), then one (1) day after delivery of same to an authorized
representative or agency of the said overnight service or (d) if sent by a
telecopier, when transmission is received by the addressee with electronic or
telephonic confirmation, in each such case addressed or telecopied to Seller or
Buyer, as the case may be, at the address or telecopy number set forth opposite
the signature of such party hereto. Notifications are as follows:
TO SELLER: Franklin Village Trust
1000 Franklin Village Drive
Franklin, Massachusetts 02038
Attention: Roger V. Calarese, Trustee
Telecopier: (508) 528-0053
with a copy to: Michael Myerow, Esq.
365 Boston Post Road #114
Sudbury, Massachusetts 01776
Telecopier: (978) 443-0566
TO BUYER: Cedar-Franklin Plaza LLC
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Leo S. Ullman
Telecopier: (516) 767-6497
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with a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attention: Mark A. Levy, Esq.
Telecopier: (212) 806-6006
TO ESCROW AGENT: Commonwealth Land Title Insurance Company
655 Third Avenue
11th Floor
New York, NY 10017
Attention: Cathy J. Snider
Telecopier: (212) 557-2148
11.3 Gender; Numbers. Words of any gender used in this Agreement shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural and vice versa unless the context
requires otherwise. Reference herein to the "Seller" shall refer to both of the
Trust and the Partnership, collectively, and to each and/or either of them
individually. The liability of Seller under this Agreement shall be joint and
several.
11.4 Headings. The captions used in connection with the articles and
sections of this Agreement are for convenience only and shall not be deemed to
construe or limit the meaning of the language of this Agreement.
11.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
11.6 Waiver of Trial by Jury. THE PARTIES HERETO HEREBY WAIVE TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR
CONTRACT) BROUGHT BY ANY PARTY AGAINST ANOTHER ON ANY MATTER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT. ANY SUCH ACTION, PROCEEDING, OR
COUNTERCLAIM SHALL BE BROUGHT EXCLUSIVELY IN THE STATE OR FEDERAL COURTS LOCATED
WITHIN THE COMMONWEALTH OF MASSACHUSETTS.
11.7 Holidays. If the final date of any period provided for herein for
the performance of an obligation or for the taking of any action falls on a
Saturday, Sunday or banking holiday, then the time of such period shall be
deemed extended to the next day which is not a Saturday, Sunday or banking
holiday in either or both of the State of New York and the Commonwealth of
Massachusetts. The term "Business Day" means a day other than a Saturday, Sunday
or any such banking holiday.
11.8 Interpretation. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
32
shall not be employed in the interpretation of this Agreement or any amendments
or exhibits hereto.
11.9 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, then such
provision shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement, provided that both parties may still effectively realize the complete
benefit of the transaction contemplated hereby.
11.10 Amendments. No modification or amendment of this Agreement shall
be effective unless made in writing and executed by both Seller and Buyer. In
the event any approval or consent is required pursuant to any provision of this
Agreement, such approval or consent shall be deemed given only if it is in
writing, executed by the party whose approval or consent is required.
11.11 Confidentiality. Neither Seller nor Buyer shall, without the
prior consent of the other party, take out any advertisement to publicize the
transaction contemplated by this Agreement. Buyer agrees that all information
concerning Seller, its beneficiaries, or the Property supplied by Seller or
discovered in connection with its Investigations (other than information in the
public domain at the time supplied to or discovered by Buyer), shall be used
solely in connection with Buyer's acquisition of the Property and that Buyer
shall not disclose such information to third parties prior to the Closing.
Notwithstanding the foregoing, Buyer may, prior to the Closing, disclose such of
the information regarding the Property (i) as required by law or court order
(provided prior written notice of such disclosure shall be provided to Seller)
and (ii) as Buyer deems necessary or desirable in connection with the
Investigations and the transaction contemplated hereby, provided that those to
whom such information and/or material is disclosed are informed of the
confidential nature thereof and agree(s) to keep the same confidential in
accordance with the terms and conditions hereof. In the event that the Closing
shall not occur, for reasons other than a Seller default hereunder, Buyer shall
return to Seller all information concerning the Property delivered or made
available to Buyer by Seller. The provisions of this Section 11.16 shall survive
the Closing or earlier termination of this Agreement.
11.12 Entire Agreement. This Agreement embodies the entire agreement
between the parties and cannot be varied except by the written agreement of the
parties. Seller make no representations, warranties or agreements with respect
to Property, except as set forth in this Agreement.
11.13 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by Seller to
Buyer at Closing, Seller agree to perform, execute and/or deliver or cause to be
delivered, executed and/or delivered, but without any obligation to incur any
additional liability or expense, on or after the Closing any and all further
acts, deeds and assurances as may be reasonably necessary to consummate the
transactions contemplated hereby.
33
11.14 Assignment. Buyer may assign Buyer's rights or delegate Buyer's
duties under this Agreement, but only to one or more entities managed or
controlled by Cedar Shopping Centers Partnership, L.P. The said assignee shall
assume all obligations of Buyer under this Agreement by a written instrument
approved in form and substance by Seller which approval shall not be
unreasonably withheld or delayed. Except as hereinbefore set forth, this
Agreement may not be assigned by Buyer.
11.15 1031 Exchange. Seller and Buyer agree that either party may
consummate the sale or purchase of the Property in whole or in part as part of
one or more so-called "like-kind exchanges" (individually, an "Exchange")
pursuant to Section 1031 of the Internal Revenue Code (the "Code") and that the
non-exchanging party will reasonably cooperate with the exchanging party in its
efforts to do so, provided that (a) the Closing shall not be delayed or affected
by reason of the Exchange nor shall the consummation of obligations under this
Agreement be so delayed or affected; (b) the exchanging party shall affect the
Exchange through a qualified intermediary and the non-exchanging party shall not
be required to acquire or hold title to any real property for the purposes of
consummating the Exchange, and (c) the exchanging party shall indemnify the
non-exchanging party from, and the exchanging party shall pay, any additional
costs that would not otherwise have been incurred by the non-exchanging party
had the exchanging party not consummated this transaction through the Exchange.
The non-exchanging party shall not by this Agreement or its acquiescence to the
Exchange (a) have its rights under this Agreement affected or diminished in any
manner, or (b) be responsible for compliance with or be deemed to have warranted
to the exchanging party that the Exchange in fact complies with Section 1031 of
the Code, or (c) incur any liability whatsoever in connection with the Exchange.
11.16 Indemnity.
11.16.1 Buyer hereby agrees to indemnify and hold harmless
Seller from and against any and all acts, suits, proceedings, demands,
assessments, judgments, costs (including, without limitation, reasonable
attorneys' fees and court costs), loss, damage or liability (collectively,
"B-Claims") resulting to Seller arising from personal injury, death or property
damage occurring at the Premises after the Closing Date. In the event that any
B-Claim shall be asserted by any party against Seller or the Premises which, if
sustained, would result in a liability of Buyer to Seller under this Section,
Seller shall, as soon as reasonably possible after learning of such claim,
notify Buyer thereof and Buyer shall be entitled to defend (with counsel
selected by Buyer and reasonably acceptable to Seller) such B-Claim and shall
have the right to settle or compromise any such B-Claim (provided Seller is
released from liability in connection therewith).
11.16.2 Seller hereby agrees to indemnify and hold harmless
Buyer from and against any and all acts, suits, proceedings, demands,
assessments, judgments, costs (including, without limitation, reasonable
attorneys' fees and court costs), loss, damage or liability (collectively,
"S-Claims") resulting to Buyer arising from personal injury, death or property
damage occurring at the Premises before the Closing Date. In the event that any
S-Claim shall be asserted by any party against Buyer or the Premises which, if
sustained, would result in a liability of Seller to Buyer under this Section,
Buyer shall, as soon as reasonably possible after learning of such claim, notify
Seller thereof and Seller shall be entitled to defend (with counsel selected by
34
Seller and reasonably acceptable to Buyer) such S-Claim and shall have the right
to settle or compromise any such S-Claim (provided Buyer is released from
liability in connection therewith).
11.17 Multiple Counterpart. This Agreement may be signed in any number
of counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were on the same instrument.
11.18 Facsimile. Delivery of this Agreement by facsimile by any party
shall represent a valid and binding execution and delivery of this Agreement by
such party.
[Signature Page Follows]
35
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
FRANKLIN VILLAGE TRUST
By:
-----------------------------------
Name: Roger V. Calarese
Title: Trustee
By:
-----------------------------------
Name: A. Richard Calarese
Title: Trustee
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
----------------------------------
Name:
Title:
ESCROW AGENT (and to acknowledge
agreement with Article IX)
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By:
---------------------------------
Name:
Title:
36
Joinder
Franklin Village Development Limited Partnership (the "Partnership"), a
Massachusetts limited partnership, the sole beneficiary of Franklin Village
Trust, hereby acknowledges and consents to the execution of that certain
Agreement of Purchase and Sale (the "Contract"), of even date herewith, by and
between Roger V. Calarese and A. Richard Calarese, as trustees of the Franklin
Village Trust, dated January 19, 1979, as amended ("Seller"), and Cedar-Franklin
Village LLC, a Delaware limited liability company ("Buyer").
The Partnership hereby joins Seller in the making all of the
representations made by Seller in the Contract and in all of the documents
delivered by Seller at the Closing (as that term is defined in the Contract).
Additionally, the Partnership guaranties the performance of all of the
obligations and covenants made by Seller in the Contract. Finally, the
Partnership covenants to deliver at the Closing those documents contemplated in
the Contract to be so delivered by the Partnership.
The terms of this Joinder shall survive the Closing.
Franklin Village Development Limited Partnership,
a Massachusetts limited partnership
By: Franklin Village Development Corporation,
a Massachusetts corporation, its general
partner
By:
----------------------------------------
Name:
Title:
37
EXHIBIT 10.02
AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this
"Amendment") is made and entered into as of the 2nd day of September, 2004, by
and between Roger V. Calarese and A. Richard Calarese, as trustees of the
Franklin Village Trust, dated January 19, 1979, as amended ("Seller"), having an
office at 1000 Franklin Village Drive, Franklin, Massachusetts 02038, and
Cedar-Franklin Village LLC, a Delaware limited liability company ("Buyer"),
having an office c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Port Washington, New York 11050.
WHEREAS, Buyer and Seller have entered into that certain
Agreement of Purchase and Sale, dated as of August 2, 2004 (the "Agreement").
WHEREAS, Seller and Buyer desire to amend the terms of the
Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Amendment, in consideration of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, Seller and Buyer hereby
covenant and agree as follows:
1. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.
2. The Due Diligence Period shall be extended and shall expire at 5:00
p.m. (Eastern time) on September 10, 2004.
3. Except as expressly modified or amended by this Amendment, all of
the terms, covenants and conditions of the Agreement are hereby ratified and
confirmed.
4. Except insofar as reference to the contrary is made in any such
instrument, all references to the "Agreement" in any future correspondence or
notice shall be deemed to refer to the Agreement as modified by this Amendment.
5. This Amendment may be signed in any number of counterparts, each of
which shall be deemed to be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
6. Delivery of this Amendment by facsimile by any party shall represent
a valid and binding execution and delivery of this Amendment by such party.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
FRANKLIN VILLAGE TRUST
By:
----------------------------------
Name: Roger V. Calarese
Title: Trustee
By:
----------------------------------
Name: A. Richard Calarese
Title: Trustee
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
------------------------------
Name:
Title:
EXHIBIT 10.03
SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this
"Amendment") is made and entered into as of the 10th day of September, 2004, by
and between Roger V. Calarese and A. Richard Calarese, as trustees of the
Franklin Village Trust, dated January 19, 1979, as amended ("Seller"), having an
office at 1000 Franklin Village Drive, Franklin, Massachusetts 02038, and
Cedar-Franklin Village LLC, a Delaware limited liability company ("Buyer"),
having an office c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Port Washington, New York 11050.
WHEREAS, Buyer and Seller have entered into that certain
Agreement of Purchase and Sale, dated as of August 2, 2004, as amended by that
certain Amendment to Agreement of Purchase and Sale, dated as of September 2,
2004 (as amended, the "Agreement").
WHEREAS, Seller and Buyer desire to amend the terms of the
Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Amendment, in consideration of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, Seller and Buyer hereby
covenant and agree as follows:
1. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.
2. The Due Diligence Period shall be extended and shall expire at 5:00
p.m. (Eastern time) on September 13, 2004.
3. Except as expressly modified or amended by this Amendment, all of
the terms, covenants and conditions of the Agreement are hereby ratified and
confirmed.
4. Except insofar as reference to the contrary is made in any such
instrument, all references to the "Agreement" in any future correspondence or
notice shall be deemed to refer to the Agreement as modified by this Amendment.
5. This Amendment may be signed in any number of counterparts, each of
which shall be deemed to be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
6. Delivery of this Amendment by facsimile by any party shall represent
a valid and binding execution and delivery of this Amendment by such party.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
FRANKLIN VILLAGE TRUST
By:
--------------------------------
Name: Roger V. Calarese
Title: Trustee
By:
--------------------------------
Name: A. Richard Calarese
Title: Trustee
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
----------------------------
Name:
Title:
EXHIBIT 10.04
THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
-------------------------------------------------
THIS THIRD AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this
"Amendment") is made and entered into as of the 13th day of September, 2004, by
and between Roger V. Calarese and A. Richard Calarese, as trustees of the
Franklin Village Trust, dated January 19, 1979, as amended ("Seller"), having an
office at 1000 Franklin Village Drive, Franklin, Massachusetts 02038, and
Cedar-Franklin Village LLC, a Delaware limited liability company ("Buyer"),
having an office c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Port Washington, New York 11050.
WHEREAS, Buyer and Seller have entered into that certain Agreement of
Purchase and Sale, dated as of August 2, 2004, as amended by that certain
Amendment to Agreement of Purchase and Sale dated as of September 2, 2004, as
further amended by that certain Second Amendment to Agreement of Purchase and
Sale dated as of September 10, 2004 (as amended, the "Agreement").
WHEREAS, Seller and Buyer desire to amend the terms of the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Amendment, in consideration of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, Seller and Buyer hereby covenant and agree
as follows:
1. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.
2. The parties acknowledge that, pursuant to the terms of the Agreement
(i) Seller is obligated to repay the Mortgage Loan at or prior to the Closing
and to convey the Property to Buyer at the Closing free and clear of the
Mortgage, and (ii) Buyer is obligated to pay the Prepayment Consideration to the
Mortgagee at the Closing.
3. Seller agrees that, notwithstanding anything to the contrary
contained in the Agreement, Buyer shall have the right, but not the obligation,
to take title to the Property subject to the Mortgage Loan so long as Buyer
shall assume and agree to repay the Mortgage Loan (an "Assumption"), it being
acknowledged by Seller and Buyer that any Assumption shall be entirely subject
to the Mortgagee's approval rights under the terms of the Mortgage Loan
Documents.
4. In connection with the prospective Assumption, Seller shall (i)
request an estoppel certificate ("Mortgagee Estoppel") duly executed by
Mortgagee to be dated not more than thirty (30) days prior to the Closing Date,
certifying as to (A) the outstanding principal balance of the Mortgage Loan, (B)
the interest rate, (C) the date through which interest on the loan has been
paid, (D) the value of any escrows held by Mortgagee on Seller's account, and
(E) that the Mortgagee (a) has not delivered any notice of default under the
Mortgage Loan Documents that remains uncured, and (b) does not have knowledge of
any default under the Mortgage Loan Documents, and (ii) use good faith and
diligent efforts to obtain a consent, duly executed by Mortgagee (the "Mortgagee
Consent"), to be dated not more than thirty (30) days prior to the Closing Date,
authorizing the Assumption and the sale of the Property to Buyer. Seller shall
promptly deliver the original executed Mortgagee Estoppel and the Mortgagee
Consent to Buyer as and when each is received by Seller. Seller shall not be
responsible for the payment of any fees payable to the Mortgagee on account of
the prospective Assumption. Buyer shall, at its own cost and expense, cooperate
with Seller by providing Mortgagee with information and documents and all fees
and cost reimbursements (including, if applicable, all processing and Mortgagee
counsel fees) required by Mortgagee in connection with the Mortgagee Consent and
Mortgagee Estoppel and prospective Assumption.
5. In the event of the Assumption (i) Section 4.2.17 and Section 6.1.2
of the Agreement shall be deemed to be modified to eliminate Seller's obligation
to repay the Mortgage Loan and eliminate the Mortgage at or prior to the
Closing, (ii) Section 7.4.2, Section 8.8, the second sentence of Section 2.1,
and the last two sentences of Section 7.1.1 shall be deemed to be omitted from
the Agreement, (iii) Buyer shall be responsible for the payment to the Mortgagee
of any fees contemplated by the Loan Documents to be payable in connection with
the Assumption, (iv) the amount of the Balance shall be reduced by the
outstanding principal balance of the Mortgage Loan as of the Closing Date, as
adjusted by the amount of any escrows deposited by Seller with Mortgagee to the
extent that Seller's interest therein is transferred to Buyer in connection with
the Assumption, and (v) interest on the Mortgage Loan for the calendar month in
which the Closing occurs shall be prorated as of the Proration Date. In the
event the Assumption occurs, unless Seller is released by Mortgagee from
liability in connection with the Mortgage Loan, Buyer shall and does hereby
agree to hold harmless and indemnify Seller, the Partnership, and all partners
of the Partnership (as partners and individually) from and against any and all
obligations, liabilities, damages, costs and expenses (including reasonable
attorneys' fees) in connection with the Mortgage Loan or any document or
agreement evidencing or given in connection with the Mortgage Loan (including,
without limitation, obligations under that certain Environmental Indemnity
Agreement, dated as of November 5, 1997, given in connection with the Mortgage
Loan). The indemnity and hold harmless herein contained shall survive the
Closing and shall remain in full force and effect until the expiration of the
periods required by applicable statutes of limitations with respect to all
obligations arising in connection with the Mortgage Loan.
6. The parties acknowledge that the Purchase Price was agreed upon on
the basis that (a) Enviro Supply was and would continue to be a tenant in good
standing at the Property occupying approximately one thousand two hundred
(1,200) square feet of space in Building J at the Property (the "Enviro Space")
and paying approximately twenty dollars ($20) per square foot per annum in rent
plus additional rent on account of its occupancy of the Enviro Space and (b)
Golf USA was and would continue to be a tenant in good standing at the Property
occupying approximately two thousand (2,000) square feet of space in Building J
at the Property (the "Golf USA Space") and paying approximately twenty dollars
($20) per square foot per annum in rent plus additional rent on account of its
occupancy of the Golf USA Space. The parties further acknowledge that Enviro
Supply is not in occupancy at the Property and that Golf USA is not in good
standing at the Property and is expected to vacate its premises at the Property
prior to the Closing. The parties have agreed that on the first day of each of
the first twenty-four (24) full calendar months following the Closing commencing
with the first full calendar month following the month in which the Closing
occurs, Seller shall pay to Buyer to compensate Buyer for lost rental for the
Enviro Space and the Golf USA Space the amount of $5,333.33 plus estimated pro
2
rata charges on account of taxes, insurance, and common area maintenance at the
Property (the "Enviro/Golf Payment Amount"). From and after the commencement and
receipt by Buyer of regularly scheduled rent from replacement tenants under
replacement leases for the Golf USA Space and the Enviro Space, in each calendar
month during such twenty-four (24) month period, the Enviro/Golf Payment Amount
shall be reduced by any rent required to be paid in such calendar month by such
replacement tenants then occupying the Enviro Space and the Golf USA Space, it
being understood and agreed that to the extent either of the Enviro Space or
Golf USA Space have been re-leased after Closing, from and after the
commencement and receipt by Buyer of regularly scheduled rent under such
replacement leases, Seller's obligation with respect to the Enviro/Golf Payment
Amount shall cease except to the extent that the aggregate base monthly rent
provided for in the applicable replacement leases is less than the Enviro/Golf
Payment Amount. Buyer agrees to work diligently to attempt to re-lease the
Enviro Space and the Golf USA Space and to reasonably lease such spaces to
comparable convenience-oriented "non-credit" "niche" tenants. Except as
expressly modified or amended by this Amendment, all of the terms, covenants and
conditions of the Agreement are hereby ratified and confirmed.
7. The New Management Agreement shall provide that the failure of
Seller to pay to Buyer the Enviro/Golf Payment Amount shall constitute a default
under the New Management Agreement and entitle Buyer to offset any unpaid
portion of the Enviro/Golf Payment Amount against amounts payable under the New
Management Agreement.
8. Attached hereto as Attachment A is a revised rent roll for the
Property dated as of August 19, 2004 (the "Revised Rent Roll"). The parties
agree that the Revised Rent Roll shall replace the Rent Roll appearing as
Exhibit I to the Agreement and shall be deemed the Rent Roll referred to in the
Agreement for all purposes.
9. The parties agree that the Due Diligence Period shall be deemed to
expire on Monday, September 13, 2004, and that notwithstanding anything
contained in Section 7.1 of the Agreement, the Scheduled Closing Date shall be
November 1, 2004.
10. Except insofar as reference to the contrary is made in any such
instrument, all references to the "Agreement" in any future correspondence or
notice shall be deemed to refer to the Agreement as modified by this Amendment.
11. This Amendment may be signed in any number of counterparts, each of
which shall be deemed to be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
12. Delivery of this Amendment by facsimile by any party shall
represent a valid and binding execution and delivery of this Amendment by such
party.
3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
FRANKLIN VILLAGE TRUST
By:
--------------------------------------------
Name: Roger V. Calarese
Title: Trustee
By:
--------------------------------------------
Name: A. Richard Calarese
Title: Trustee
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
--------------------------------------------
Name:
Title:
4
ATTACHMENT A
Rent Roll
EXHIBIT 10.05
FOURTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
--------------------------------------------------
THIS FOURTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this
"Amendment") is made and entered into as of the __ day of October, 2004, by and
between Roger V. Calarese and A. Richard Calarese, as trustees of the Franklin
Village Trust, dated January 19, 1979, as amended ("Seller"), having an office
at 1000 Franklin Village Drive, Franklin, Massachusetts 02038, and
Cedar-Franklin Village LLC, a Delaware limited liability company ("Buyer"),
having an office c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Port Washington, New York 11050.
WHEREAS, Buyer and Seller have entered into that certain Agreement of
Purchase and Sale, dated as of August 2, 2004, as amended by that certain
Amendment to Agreement of Purchase and Sale dated as of September 2, 2004, as
further amended by that certain Second Amendment to Agreement of Purchase and
Sale dated as of September 10, 2004, and as further amended by that certain
Third Amendment to Agreement of Purchase and Sale (the "Third Amendment") dated
as of September 13, 2004 (collectively, the "Agreement").
WHEREAS, Seller and Buyer desire to amend the terms of the Agreement as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Amendment, in consideration of other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, Seller and Buyer hereby covenant and agree
as follows:
1. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Agreement.
2. Seller is party to a Lease Agreement, dated May 30, 1987 as amended
and extended, with New Weathervane Retail Corporation, a Delaware corporation
(hereinafter "Weathervane") for the premises known as Rental "E-4" at the
property (the "Lease"). Weathervane filed for protection under the bankruptcy
laws in The United States Bankruptcy Court For The District of Delaware - Case
No. 04-11649(PJW) (the "Bankruptcy Court"), and on or about July 29, 2004 the
Bankruptcy Court ordered (the "Order") the transfer of the tenant's interest
under the Lease to Fair Vane Corp., a corporation with an address at 1185
Caledonia Road, Toronto, Canada MGA2X1 (hereinafter "Fair Vane"). Pursuant to
said order, Fair Vane has indicated to Seller that it will assume the
obligations of Weathervane under the Lease arising from and after August 1,
2004, subject to certain conditions specified in the Order. Seller has (with
Buyer's consent) agreed to extend the term of the Lease until February 1, 2010,
with minimum rent equal to $80,850 per year (without increases) for the term of
the Lease. After Closing (as defined in the Agreement), Buyer has agreed to
enter into an agreement with Fair Vane amending and extending the Lease on the
terms and conditions set forth in this Paragraph 2. Payments by Fair Vane of all
rents due for the months of August, September, and October, 2004 shall be
deferred (the "Deferred Amount"), and Fair Vane has agreed to pay the Deferred
Amount in thirty six (36) consecutive equal monthly installments commencing
November 1, 2004 (the "Deferred Payments") which Deferred Payments shall be in
addition to the monthly rental due to Buyer during such months.
Seller and Buyer agree that Buyer shall apply such Deferred Payments
from Fair Vane against the Enviro/Golf Payment Amount (as defined in the Third
Amendment) and, upon payment in full of all amounts due and owing to Buyer with
respect to the Enviro/Golf Payment Amount, such Deferred Payments shall be
remitted to Seller.
3. The Prepayment Consideration payable by Buyer at the Closing will be
an estimate provided by the Seller's Mortgagee based upon applicable Treasury
Rates in effect either one or two weeks prior to scheduled Closing. Actual
Prepayment Consideration cannot be determined until after the closing because it
is based upon applicable Treasury Rates upon in effect during the week prior to
the closing and will not be determined by the Seller's Mortgagee until after the
closing. The Mortgagee has indicated that if the Prepayment Consideration is
greater than the estimate, it will obtain sufficient funds from escrow accounts
maintained by Seller, and if less than the estimate, it will refund the
difference to Seller. Buyer and Seller agree to make appropriate adjustment
pursuant to the terms of the Agreement within three (3) days of receipt of
notice from the Mortgagee of its determination as to the amount of the
Prepayment Consideration.
4. The terms of this Fourth Amendment shall survive the Closing.
5. Except insofar as reference to the contrary is made in any such
instrument, all references to the "Agreement" in any future correspondence or
notice shall be deemed to refer to the Agreement as modified by this Amendment.
6. This Amendment may be signed in any number of counterparts, each of
which shall be deemed to be an original, with the same effect as if the
signatures thereto and hereto were on the same instrument.
7. Delivery of this Amendment by facsimile by any party shall represent
a valid and binding execution and delivery of this Amendment by such party.
2
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
FRANKLIN VILLAGE TRUST
By:
----------------------------------------
Name: Roger V. Calarese
Title: Trustee
By:
----------------------------------------
Name: A. Richard Calarese
Title: Trustee
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
----------------------------------------
Name:
Title:
3
EXHIBIT 10.06
LIMITED LIABILITY COMPANY AGREEMENT
OF
CEDAR-FRANKLIN VILLAGE LLC
This Limited Liability Company Agreement (together with the schedules
attached hereto, this "Agreement") of CEDAR-FRANKLIN VILLAGE LLC (the
"Company"), is entered into by Cedar-Franklin Village 2 LLC, as the sole equity
member (the "Member"), and Suzanne M. Hay ("Springing Member 1") and Jan Koeman
("Springing Member 2"), as the Springing Members (as defined on Schedule A
hereto). Capitalized terms used and not otherwise defined herein have the
meanings set forth on Schedule A hereto.
The Member, by execution of this Agreement, hereby forms the Company as
a limited liability company pursuant to and in accordance with the Delaware
Limited Liability Company Act (6 Del. C. ss. 18-101 et seq.), as amended from
time to time (the "Act"), and this Agreement, and the Member and Springing
Member 1 and Springing Member 2 hereby agree as follows:
Section 1. Name.
The name of the limited liability company formed hereby is
Cedar-Franklin Village LLC.
Section 2. Principal Business Office.
The principal business office of the Company shall be located at c/o
Cedar Shopping Centers Partnership, L.P., 44 South Bayles Avenue, Port
Washington, NY 11050 or such other location as may hereafter be determined by
the Member.
Section 3. Registered Office.
The address of the registered office of the Company in the State of
Delaware is c/o Corporation Service Company, 2711 Centerville Road, Suite 400 ,
in the City of Wilmington, County of New Castle, Delaware 19808.
Section 4. Registered Agent.
The name and address of the registered agent of the Company for service
of process on the Company in the State of Delaware is Corporation Service
Company, 2711 Centerville Road, Suite 400in the City of Wilmington, County of
New Castle, Delaware 19808.
Section 5. Members.
(a) The mailing address of the Member is set forth on Schedule B
attached hereto. The Member was admitted to the Company as a member of the
Company upon its execution of a counterpart signature page to this Agreement.
(b) Subject to Section 9(j), the Member may act by written consent.
(c) Upon the occurrence of any event that causes the Member to cease to
be a member of the Company (other than (i) upon an assignment by the Member of
all of its limited liability company interest in the Company and the admission
of the transferee pursuant to Sections 21 and 23, or (ii) the resignation of the
Member and the admission of an additional member of the Company pursuant to
Sections 22 and 23) (a "Member Cessation Event"), Springing Member 1 shall,
without any action of any Person and simultaneously with the Member Cessation
Event, automatically be admitted to the Company as a Special Member and shall
continue the Company without dissolution. If, however, at the time of a Member
Cessation Event, Springing Member 1 has died or is otherwise no longer able to
step into the role of Special Member, then in such event, Springing Member 2
shall, concurrently with the Member Cessation Event, and without any action of
any Person and simultaneously with the Member Cessation Event, automatically be
admitted to the Company as Special Member and shall continue the Company without
dissolution. It is the intent of these provisions that the Company never have
more than one Special Member at any particular point in time. No Special Member
may resign from the Company or transfer its rights as Special Member unless a
successor Special Member has been admitted to the Company as Special Member by
executing a counterpart to this Agreement. The Special Member shall
automatically cease to be a member of the Company upon the admission to the
Company of a substitute Member. The Special Member shall be a member of the
Company that has no interest in the profits, losses and capital of the Company
and has no right to receive any distributions of Company assets. Pursuant to
Section 18-301 of the Act, a Special Member shall not be required to make any
capital contributions to the Company and shall not receive a limited liability
company interest in the Company. A Special Member, in its capacity as Special
Member, may not bind the Company. Except as required by any mandatory provision
of the Act, a Special Member, in its capacity as Special Member, shall have no
right to vote on, approve or otherwise consent to any action by, or matter
relating to, the Company, including, without limitation, the merger,
consolidation or conversion of the Company. In order to implement the admission
to the Company of the Special Member, each of Springing Member 1 and Springing
Member 2shall execute a counterpart to this Agreement. Prior to its admission to
the Company as Special Member, each person acting as a Springing Member 1 or
Springing Member 2 shall not be a member of the Company.
(d) The Company shall at all times have a Springing Member 1 and a
Springing Member 2. No resignation or removal of a Springing Member, and no
appointment of a successor Springing Member, shall be effective unless and until
such successor shall have executed a counterpart to this Agreement and, with
respect to Springing Member 1 only, accepted its appointment as Independent
Director pursuant to Section 10. In the event of a vacancy in the position of
Springing Member 1 or Springing Member 2, the Member shall, as soon as
practicable, appoint a successor Springing Member to fill such vacancy. By
signing this Agreement, a Springing Member agrees that, should such Springing
Member become a Special Member, such Springing Member will be subject to and
bound by the provisions of this Agreement applicable to a Special Member.
2
Section 6. Certificates.
Emanuel Tsourounis, II, is hereby designated as an "authorized person"
within the meaning of the Act, and has executed, delivered and filed the
Certificate of Formation of the Company with the Secretary of State of the State
of Delaware. Upon the filing of the Certificate of Formation with the Secretary
of State of the State of Delaware, his powers as an "authorized person" ceased,
and the Member thereupon became the designated "authorized person" and shall
continue as the designated "authorized person" within the meaning of the Act.
The Member or an Officer shall execute, deliver and file any other certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in Massachusetts and in any other jurisdiction in which
the Company may wish to conduct business.
The existence of the Company as a separate legal entity shall continue
until cancellation of the Certificate of Formation as provided in the Act.
Section 7. Purposes.
(a) Notwithstanding anything to the contrary in this Agreement or in
any other document governing the formation, management or operation of the
Company, the sole purpose to be conducted or promoted by the Company is to
engage in the following activities:
(i) to acquire, own, hold, lease, operate, manage,
maintain, develop and improve, the real property
described in the Loan Documents (the "Property");
(ii) to enter into and perform its obligations under the
Loan Documents;
(iii) to sell, transfer, service, convey, dispose of,
pledge, assign, borrow money against, finance,
refinance or otherwise deal with the Property to the
extent permitted under the Loan Documents; and
(iv) to engage in any lawful act or activity and to
exercise any powers permitted to limited liability
companies organized under the laws of the State of
Delaware that are related or incidental to and
necessary, convenient or advisable for the
accomplishment of the above-mentioned purposes.
(b) The Company, and the Member, or any Director or Officer on behalf
of the Company, may enter into and perform their obligations under the Basic
Documents and all documents, agreements, certificates, or financing statements
contemplated thereby or related thereto, all without any further act, vote or
approval of any Member, Director, Officer or other Person notwithstanding any
other provision of this Agreement, the Act or applicable law, rule or
regulation. The foregoing authorization shall not be deemed a restriction on the
powers of the Member or any Director or Officer to enter into other agreements
on behalf of the Company.
Section 8. Powers.
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Subject to Section 9(j), the Company, and the Board of Directors and
the Officers of the Company on behalf of the Company, (i) shall have and
exercise all powers necessary, convenient or incidental to accomplish its
purposes as set forth in Section 7 and (ii) shall have and exercise all of the
powers and rights conferred upon limited liability companies formed pursuant to
the Act.
Section 9. Management.
(a) Board of Directors. Subject to Section 9(j), the business and
affairs of the Company shall be managed by or under the direction of a Board of
one or more Directors designated by the Member. Subject to Section 10, the
Member may determine at any time in its sole and absolute discretion the number
of Directors to constitute the Board. The authorized number of Directors may be
increased or decreased by the Member at any time in its sole and absolute
discretion, upon notice to all Directors, and subject in all cases to Section
10. The initial number of Directors shall be three (3), one (1) of which shall
be an Independent Director pursuant to Section 10. Each Director elected,
designated or appointed by the Member shall hold office until a successor is
elected and qualified or until such Director's earlier death, resignation,
expulsion or removal. Each Director shall execute and deliver the Management
Agreement. Directors need not be a Member. The initial Directors designated by
the Member are listed on Schedule D hereto.
(b) Powers. Subject to Section 9(j), the Board of Directors shall have
the power to do any and all acts necessary, convenient or incidental to or for
the furtherance of the purposes described herein, including all powers,
statutory or otherwise. Subject to Section 7, the Board of Directors has the
authority to bind the Company.
(c) Meeting of the Board of Directors. The Board of Directors of the
Company may hold meetings, both regular and special, within or outside the State
of Delaware. Regular meetings of the Board may be held without notice at such
time and at such place as shall from time to time be determined by the Board.
Special meetings of the Board may be called by the President on not less than
one day's notice to each Director by telephone, facsimile, mail, telegram or any
other means of communication, and special meetings shall be called by the
President or Secretary in like manner and with like notice upon the written
request of any one or more of the Directors.
(d) Quorum: Acts of the Board. At all meetings of the Board, a majority
of the Directors shall constitute a quorum for the transaction of business and,
except as otherwise provided in any other provision of this Agreement, the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board. If a quorum shall not be present at any meeting
of the Board, the Directors present at such meeting may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present. Any action required or permitted to be taken at any
meeting of the Board or of any committee thereof may be taken without a meeting
if all members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee, as the case may be; provided, however, that no such
written consent of any Independent Director shall be required for the validity
4
of such action by the Board unless, pursuant to the provisions of Section
9(j)(iii), such action would be invalid in the absence of the affirmative vote
or consent of such Independent Director.
(e) Electronic Communications. Members of the Board, or any committee
designated by the Board, may participate in meetings of the Board, or any
committee, by means of telephone conference or similar communications equipment
that allows all Persons participating in the meeting to hear each other, and
such participation in a meeting shall constitute presence in Person at the
meeting. If all the participants are participating by telephone conference or
similar communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.
(f) Committees of Directors.
(i) The Board may, by resolution passed by a majority of
the whole Board, designate one or more committees,
each committee to consist of one or more of the
Directors of the Company. The Board may designate one
or more Directors as alternate members of any
committee, who may replace any absent or disqualified
member at any meeting of the committee.
(ii) In the absence or disqualification of a member of a
committee, the member or members thereof present at
any meeting and not disqualified from voting, whether
or not such members constitute a quorum, may
unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or
disqualified member.
(iii) Any such committee, to the extent provided in the
resolution of the Board, and subject to, in all
cases, Sections 9(j) and 10, shall have and may
exercise all the powers and authority of the Board in
the management of the business and affairs of the
Company. Such committee or committees shall have such
name or names as may be determined from time to time
by resolution adopted by the Board. Each committee
shall keep regular minutes of its meetings and report
the same to the Board when required.
(g) Compensation of Directors; Expenses. The Board shall have the
authority to fix the compensation of Directors. The Directors may be paid their
expenses, if any, of attendance at meetings of the Board, which may be a fixed
sum for attendance at each meeting of the Board or a stated salary as Director.
No such payment shall preclude any Director from serving the Company in any
other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like compensation for attending committee
meetings.
(h) Removal of Directors. Unless otherwise restricted by law, any
Director or the entire Board of Directors may be removed or expelled, with or
without cause, at any time by the Member, and, subject to Section 10, any
vacancy caused by any such removal or expulsion may be filled by action of the
Member.
5
(i) Directors as Agents. To the extent of their powers set forth in
this Agreement and subject to Section 9(j), the Directors are agents of the
Company for the purpose of the Company's business, and the actions of the
Directors taken in accordance with such powers set forth in this Agreement shall
bind the Company. Notwithstanding the last sentence of Section 18-402 of the
Act, except as provided in this Agreement or in a resolution of the Directors, a
Director may not bind the Company.
(j) Limitations on the Company's Activities.
(i) This Section 9(j) is being adopted to comply with
certain provisions necessary to qualify the Company
as a "special purpose" entity.
(ii) Notwithstanding anything to the contrary in this
Agreement or in any other document governing the
formation, management or operation of the Company,
for so long as any Obligation is outstanding, neither
the Member nor the Company shall amend, alter, change
any of Sections 1, 5(b), 5(c), 5(d), 6, 7, 8, 9, 10,
14, 16, 20(b), 20(f), 21, 22, 23, 24, 25, 26, 27, 29,
30, 31 or 32 or Schedule A of this Agreement (to the
extent that the terms defined in Schedule A are used
in any of the foregoing sections) (the "Special
Purpose Provisions"), or any other provision of this
or any other document governing the formation,
management or operation of the Company in a manner
that is inconsistent with any of the Special Purpose
Provisions, unless the Lender consents in writing and
the Rating Agency Condition is satisfied. Subject to
this Section 9(j), the Member reserves the right to
amend, alter, change or repeal any provisions
contained in this Agreement in accordance with
Section 32. In the event of any conflict between any
of the Special Purpose Provisions and any other
provision of this or any other document governing the
formation, management or operation of the Company,
the Special Purpose Provisions shall control.
(iii) Notwithstanding any other provision of this Agreement
or any other document governing the formation,
management or operation of the Company, and
notwithstanding any provision of law that otherwise
so empowers the Company, the Member, the Board, any
Officer or any other Person, in addition to any other
limitations set forth in this Agreement, neither the
Member nor the Board nor any Officer nor any other
Person shall be authorized or empowered, nor shall
they permit the Company to, and the Company shall
not, without the prior unanimous written consent of
the Member and the Board (including the Independent
Director), take any Material Action, provided,
however, that the Board may not vote on, or authorize
the taking of, any Material Action, unless there is
at least one Independent Director then serving in
such capacity.
(iv) The Board and the Member shall cause the Company to
do or cause to be done all things necessary to
preserve and keep in full force and effect its
existence, rights (charter and statutory) and
franchises. Notwithstanding anything to the contrary
in this Agreement or in any other document governing
6
the formation, management or operation of the
Company, the Board also shall cause the Company to
and the Company shall:
(A) maintain its books, records and bank
accounts separate from those of any other
Person;
(B) at all times hold itself out to the public
and all other Persons as a legal entity
separate from the Member and from any other
Person;
(C) have its own Board of Directors;
(D) file its own tax returns separate from those
of any other Person, except to the extent
that the Company is treated as a
"disregarded entity" for tax purposes and is
not required to file tax returns under
applicable law, and pay any taxes required
to be paid under applicable law;
(E) except as contemplated by the Loan
Documents, not commingle its assets with
assets of any other Person;
(F) conduct its business only in its own name
and comply with all organizational
formalities necessary to maintain its
separate existence;
(G) maintain separate financial statements,
showing its assets and liabilities separate
and apart from those of any other Person and
not have its assets listed on any financial
statement of any other Person; provided,
however, that in lieu thereof, the Company's
assets may be included in a consolidated
financial statement of its Affiliate
provided that (i) appropriate notation shall
be made on such consolidated financial
statements to indicate the separateness of
the Company from such Affiliate and to
indicate that the Company's assets and
credit are not available to satisfy the
debts and other obligations of such
Affiliate or any other Person and (ii) such
assets shall also be listed on the Company's
own separate balance sheet;
(H) pay its own liabilities and expenses only
out of its own funds;
(I) except for capital contributions or capital
distributions permitted under the terms and
conditions of this Agreement and properly
reflected on the books and records of the
Company, not enter into any transaction with
an Affiliate of the Company except on
commercially reasonable terms similar to
those available to unaffiliated parties in
an arm's-length transaction;
7
(J) pay the salaries of its own employees, if
any, only from its own funds;
(K) not hold out its credit or assets as being
available to satisfy the obligations of any
other Person;
(L) allocate fairly and reasonably any overhead
expenses that are shared with an affiliate,
including for shared office space and for
services performed by an employee of an
affiliate;
(M) use separate stationery, invoices and checks
bearing its own name;
(N) except as contemplated by the Loan
Documents, not pledge its assets to secure
the obligations of any other Person;
(O) correct any known misunderstanding regarding
its separate identity and not identify
itself as a department or division of any
other Person;
(P) maintain adequate capital and a sufficient
number of employees in light of its
contemplated business purpose, transactions
and liabilities; provided, however, that the
foregoing shall not require the Member to
make additional capital contributions to the
Company;
(Q) cause its Board of Directors to meet at
least annually or act pursuant to written
consent and keep minutes of such meetings
and actions and observe all other Delaware
limited liability company formalities;
(R) not acquire any obligation or securities of
the Member or of any Affiliate of the
Company; and
(S) cause the Directors, Officers, agents and
other representatives of the Company to act
at all times with respect to the Company
consistently and in furtherance of the
foregoing and in the best interests of the
Company.
Failure of the Company, or the Member or Board on
behalf of the Company, to comply with any of the
foregoing covenants or any other covenants contained
in this Agreement shall not affect the status of the
Company as a separate legal entity or the limited
liability of the Member or the Directors.
(v) Notwithstanding anything to the contrary in this
Agreement or in any other document governing the
formation, management or operation of the Company,
8
the Board shall not cause or permit the Company to
and the Company shall not:
(A) except as contemplated by the Loan
Documents, guarantee any obligation of any
Person, including any Affiliate or become
obligated for the debts of any other Person
or hold out its credit as being available to
pay the obligations of any other Person;
(B) engage, directly or indirectly, in any
business other than as required or permitted
to be performed under Section 7, the Basic
Documents or this Section 9(j);
(C) incur, create or assume any indebtedness or
liabilities other than indebtedness and
liabilities incurred in the ordinary course
of its business that are related to the
ownership and operation of the Property and
are expressly permitted under the Loan
Documents;
(D) make or permit to remain outstanding any
loan or advance to, or own or acquire any
stock or securities of, any Person, except
that the Company may invest in those
investments permitted under the Loan
Documents and may make any advance required
or expressly permitted to be made pursuant
to any provisions of the Loan Documents and
permit the same to remain outstanding in
accordance with such provisions;
(E) to the fullest extent permitted by law,
engage in any dissolution, liquidation,
consolidation, merger, sale or other
transfer of any of its assets outside the
ordinary course of the Company's business
other than such activities as are expressly
permitted pursuant to any the Loan
Documents;
(F) buy or hold evidence of indebtedness issued
by any other Person (other than cash or
investment-grade securities);
(G) form, acquire or hold any subsidiary
(whether corporate, partnership, limited
liability company or other) or own any
equity interest in any other entity; or
(H) own any asset or property other than the
Property and incidental personal property
necessary for the ownership or operation of
the Property.
Section 10. Independent Director.
As long as any Obligation is outstanding, the Member shall cause the
Company at all times to have at least one (1) Independent Director who will be
appointed by the Member. To the fullest extent permitted by law, including
Section 18-1101(c) of the Act, the Independent Director shall consider only the
9
interests of the Company and its creditors in acting or otherwise voting on the
matters referred to in Section 9(j)(iii). No resignation or removal of an
Independent Director, and no appointment of a successor Independent Director,
shall be effective until such successor (i) shall have accepted his or her
appointment as an Independent Director by a written instrument, which may be a
counterpart signature page to the Management Agreement, and (ii) shall have
executed a counterpart to this Agreement as required by Section 5(d). In the
event of a vacancy in the position of Independent Director, the Member shall, as
soon as practicable, appoint a successor Independent Director. All right, power
and authority of the Independent Director shall be limited to the extent
necessary to exercise those rights and perform those duties specifically set
forth in this Agreement. Except as provided in the second sentence of this
Section 10, in exercising their rights and performing their duties under this
Agreement, an Independent Director shall have a fiduciary duty of loyalty and
care similar to that of a director of a business corporation organized under the
General Corporation Law of the State of Delaware. No Independent Director shall
at any time serve as trustee in bankruptcy for any Affiliate of the Company.
Section 11. Officers.
(a) Officers. The initial Officers of the Company shall be designated
by the Member. The additional or successor Officers of the Company shall be
chosen by the Board and shall consist of at least a President, a Secretary and a
Treasurer. The Board of Directors may also choose one or more Vice Presidents,
Assistant Secretaries and Assistant Treasurers. Any number of offices may be
held by the same person. The Board may appoint such other Officers and agents as
it shall deem necessary or advisable who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner prescribed by the Board. The Officers
of the Company shall hold office until their successors are chosen and
qualified. Any Officer may be removed at any time, with or without cause, by the
affirmative vote of a majority of the Board. Any vacancy occurring in any office
of the Company shall be filled by the Board. The initial Officers of the Company
designated by the Member are listed on Schedule E hereto.
(b) President. The President shall be the chief executive officer of
the Company, shall preside at all meetings of the Board, shall be responsible
for the general and active management of the business of the Company and shall
see that all orders and resolutions of the Board are carried into effect. The
President or any other Officer authorized by the President or the Board shall
execute all bonds, mortgages and other contracts, except: (i) where required or
permitted by law or this Agreement to be otherwise signed and executed,
including Section 7(b); (ii) where signing and execution thereof shall be
expressly delegated by the Board to some other Officer or agent of the Company,
and (iii) as otherwise permitted in Section 11(c).
(c) Vice President. In the absence of the President or in the event of
the President's inability to act, the Vice President, if any (or in the event
there be more than one Vice President, the Vice Presidents in the order
designated by the Directors, or in the absence of any designation, then in the
order of their election), shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President. The Vice Presidents, if any, shall perform such other duties and
10
have such other powers as the Board may from time to time prescribe.
(d) Secretary and Assistant Secretary. The Secretary shall be
responsible for filing legal documents and maintaining records for the Company.
The Secretary shall attend all meetings of the Board and record all the
proceedings of the meetings of the Company and of the Board in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. The Secretary shall give, or shall cause to be given, notice of all
meetings of the Member, if any, and special meetings of the Board, and shall
perform such other duties as may be prescribed by the Board or the President,
under whose supervision the Secretary shall serve. The Assistant Secretary, or
if there be more than one, the Assistant Secretaries in the order determined by
the Board (or if there be no such determination, then in order of their
election), shall, in the absence of the Secretary or in the event of the
Secretary's inability to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board may from time to time prescribe.
(e) Treasurer and Assistant Treasurer. The Treasurer shall have the
custody of the Company funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Company and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Company in such depositories as may be designated by the Board.
The Treasurer shall disburse the funds of the Company as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render to the
President and to the Board, at its regular meetings or when the Board so
requires, an account of all of the Treasurer's transactions and of the financial
condition of the Company. The Assistant Treasurer, or if there shall be more
than one, the Assistant Treasurers in the order determined by the Board (or if
there be no such determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's inability to
act, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties and have such other powers as the Board may from time
to time prescribe.
(f) Officers as Agents. The Officers, to the extent of their powers set
forth in this Agreement or otherwise vested in them by action of the Board not
inconsistent with this Agreement, are agents of the Company for the purpose of
the Company's business and, subject to Section 9(j), the actions of the Officers
taken in accordance with such powers shall bind the Company.
(g) Duties of Board and Officers. Except to the extent otherwise
provided herein, each Director and Officer shall have a fiduciary duty of
loyalty and care similar to that of directors and officers of business
corporations organized under the General Corporation Law of the State of
Delaware.
Section 12. Limited Liability.
Except as otherwise expressly provided by the Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be the debts, obligations and liabilities solely of the
Company, and neither the Member nor the Special Member nor any Director shall be
11
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member, Special Member or Director of the Company.
Section 13. Capital Contributions.
The Member has contributed to the Company the property listed on
Schedule B attached hereto. In accordance with Section 5(c), the Special Member
shall not be required to make any capital contributions to the Company.
Section 14. Additional Contributions.
The Member is not required to make any additional capital contribution
to the Company. However, the Member may make additional capital contributions to
the Company at any time upon the written consent of such Member. To the extent
that the Member makes an additional capital contribution to the Company, the
Member shall revise Schedule B of this Agreement. The Member and the Special
Member shall not have any duty or obligation to any creditor of the Company to
make any contribution to the Company or to issue any call for capital pursuant
to this Agreement.
Section 15. Allocation of Profits and Losses.
The Company's profits and losses shall be allocated to the Member.
Section 16. Distributions.
Distributions of capital shall be made to the Member at the
times and in the aggregate amounts determined by the Board. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution of capital to the Member on account of its interest in the
Company if such distribution would violate the Act or any other applicable law
or any Basic Document or would constitute a default under the Loan Documents.
Section 17. Books and Records.
The Board shall keep or cause to be kept complete and accurate books of
account and records with respect to the Company's business. The books of the
Company shall at all times be maintained by the Board. The Member and its duly
authorized representatives shall have the right to examine the Company books,
records and documents during normal business hours. The Company, and the Board
on behalf of the Company, shall not have the right to keep confidential from the
Member any information that the Board would otherwise be permitted to keep
confidential from the Member pursuant to Section 18-305(c) of the Act. The
Company's books of account shall be kept using the method of accounting
determined by the Member. The Company's independent auditor, if any, shall be an
independent public accounting firm selected by the Member.
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Section 18. Reports.
(a) Within 60 days after the end of each fiscal quarter, the Board
shall cause to be prepared an unaudited report setting forth as of the end of
such fiscal quarter:
(i) unless such quarter is the last fiscal quarter, a
balance sheet of the Company; and
(ii) unless such quarter is the last fiscal quarter, an
income statement of the Company for such fiscal
quarter.
(b) The Board shall use diligent efforts to cause to be prepared and
mailed to the Member, within 90 days after the end of each fiscal year, an
unaudited report setting forth as of the end of such fiscal year:
(i) a balance sheet of the Company;
(ii) an income statement of the Company for such fiscal year;
and
(iii) a statement of the Member's capital account.
(c) The Board shall, after the end of each fiscal year, use reasonable
efforts to cause the Company's independent accountants, if any, to prepare and
transmit to the Member as promptly as possible any such tax information as may
be reasonably necessary to enable the Member to prepare its federal, state and
local income tax returns relating to such fiscal year.
Section 19. Other Business.
The Member, the Special Member and any Affiliate of the Member or the
Special Member may engage in or possess an interest in other business ventures
(unconnected with the Company) of every kind and description, independently or
with others notwithstanding any provision to the contrary at law or at equity.
The Company shall not have any rights in or to such independent ventures or the
income or profits therefrom by virtue of this Agreement.
Section 20. Exculpation and Indemnification.
(a) Neither the Member nor the Special Member nor any Officer,
Director, employee or agent of the Company nor any employee, representative,
agent or Affiliate of the Member or the Special Member (collectively, the
"Covered Persons") shall, to the fullest extent permitted by law, be liable to
the Company or any other Person that is a party to or is otherwise bound by this
Agreement, for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Covered Person in good faith on behalf of
the Company and in a manner reasonably believed to be within the scope of the
authority conferred on such Covered Person by this Agreement, except that a
Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person's gross negligence or willful misconduct.
13
(b) To the fullest extent permitted by applicable law, a Covered Person
shall be entitled to indemnification from the Company for any loss, damage or
claim incurred by such Covered Person by reason of any act or omission performed
or omitted by such Covered Person in good faith on behalf of the Company and in
a manner reasonably believed to be within the scope of the authority conferred
on such Covered Person by this Agreement, except that no Covered Person shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
such Covered Person by reason of such Covered Person's gross negligence or
willful misconduct with respect to such acts or omissions; provided, however,
that any indemnity under this Section 20 by the Company shall be provided out of
and to the extent of Company assets only, and the Member and the Special Member
shall not have personal liability on account thereof; and provided further, that
so long as any Obligation is outstanding, no indemnity payment from funds of the
Company (as distinct from funds from other sources, such as insurance) of any
indemnity under this Section 20 shall be payable from amounts allocable to any
other Person pursuant to the Basic Documents.
(c) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Covered Person defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the Company
prior to the final disposition of such claim, demand, action, suit or proceeding
upon receipt by the Company of an undertaking by or on behalf of the Covered
Person to repay such amount if it shall be determined that the Covered Person is
not entitled to be indemnified as authorized in this Section 20.
(d) A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, or any other facts pertinent to the
existence and amount of assets from which distributions to the Member might
properly be paid.
(e) To the extent that, at law or in equity, a Covered Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any other Covered Person, a Covered Person bound by this Agreement
acting under this Agreement shall not be liable to the Company or to any other
Covered Person for its good faith reliance on the provisions of this Agreement
or any approval or authorization granted by the Company or any other Covered
Person. The provisions of this Agreement, to the extent that they restrict the
duties and liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the Member, the Springing Members and the Special Member
to replace such other duties and liabilities of such Covered Person.
(f) Notwithstanding the foregoing provisions, any indemnification set
forth herein shall be fully subordinate to the Loan and, to the fullest extent
permitted by law, shall not constitute a claim against the Company in the event
that the Company's cash flow is insufficient to pay its Obligations.
(g) The foregoing provisions of this Section 20 shall survive any
termination of this Agreement.
14
Section 21. Assignments.
(a) Subject to Section 23 and any transfer restrictions contained in
the Loan Documents, the Member may assign its limited liability company interest
in the Company. Subject to Section 23, if the Member transfers any of its
limited liability company interest in the Company pursuant to this Section 21,
the transferee shall be admitted to the Company as a member of the Company upon
its execution of an instrument signifying its agreement to be bound by the terms
and conditions of this Agreement, which instrument may be a counterpart
signature page to this Agreement. If the Member transfers all of its limited
liability company interest in the Company, such admission shall be deemed
effective immediately prior to the transfer and, immediately following such
admission, the transferor Member shall cease to be a member of the Company. Any
successor to a Member by merger or consolidation in compliance with the Basic
Documents shall, without further act, be the Member hereunder, and such merger
or consolidation shall not constitute an assignment for purposes of this
Agreement and the Company shall continue without dissolution.
(b) Except as permitted under the Loan documents, for so long as any
Obligation remains outstanding, the Company shall always have one and only one
member.
Section 22. Resignation.
So long as any Obligation is outstanding, the Member may not resign,
except as permitted under the Basic Documents and if the Lender consents in
writing and the Rating Agency Condition is satisfied and if an additional member
is admitted to the Company pursuant to Section 23. If the Member is permitted to
resign pursuant to this Section 22, an additional member of the Company shall be
admitted to the Company, subject to Section 23, upon its execution of an
instrument signifying its agreement to be bound by the terms and conditions of
this Agreement, which instrument may be a counterpart signature page to this
Agreement. Such admission shall be deemed effective immediately prior to the
resignation and, immediately following such admission, the resigning Member
shall cease to be a member of the Company.
Section 23. Admission of Additional Members and Transfers of Indirect
Interests.
(a) One or more additional members of the Company may be admitted to
the Company with the written consent of the Member; provided, however, that,
notwithstanding the foregoing, no additional Member may be admitted to the
Company pursuant to Sections 21, 22 or 23, other than pursuant to Section 24(a)
or Section 5(c), and no transfer of any direct or indirect interest in the
Company may be made that results in a Change in Control of the Company, except
as may be expressly provided otherwise in the Loan Documents, unless (1), an
acceptable nonconsolidation opinion is delivered to the Lender and to each
Rating Agency concerning, as applicable, the Company, the new transferee and/or
their respective owners, (2) the Rating Agency Condition is satisfied and (3)
the Lender consents in writing.
Section 24. Dissolution.
15
(a) The Company shall be dissolved, and its affairs shall be wound up
upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the Company or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the Company in the Company unless the Company is continued without
dissolution in a manner required under Section 5(c) or this Section 24(a) or
permitted by this Agreement or the Act or (ii) the entry of a decree of judicial
dissolution under Section 18-802 of the Act. Upon the occurrence of any event
that causes the last remaining member of the Company to cease to be a member of
the Company or that causes the Member to cease to be a member of the Company
(other than (i) upon an assignment by the Member of all of its limited liability
company interest in the Company and the admission of the transferee pursuant to
Sections 21 and 23, or (ii) the resignation of the Member and the admission of
an additional member of the Company pursuant to Sections 22 and 23), to the
fullest extent permitted by law, the personal representative of such member is
hereby authorized to, and shall, within 90 days after the occurrence of the
event that terminated the continued membership of such member in the Company,
agree in writing (i) to continue the Company and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of the Company, effective as of the occurrence of the event
that terminated the continued membership of the last remaining member of the
Company or the Member in the Company.
(b) Notwithstanding any other provision of this Agreement, the
Bankruptcy of the Member or a Special Member shall not cause the Member or
Special Member or additional member, respectively, to cease to be a member of
the Company and upon the occurrence of such an event, the Company shall continue
without dissolution.
(c) Notwithstanding any other provision of this Agreement, each of the
Member and the Special Member waive any right it might have to agree in writing
to dissolve the Company upon the Bankruptcy of the Member or Special Member or
the occurrence of an event that causes the Member or Special Member to cease to
be a member of the Company.
(d) In the event of dissolution, the Company shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company shall
be applied in the manner, and in the order of priority, set forth in Section
18-804 of the Act.
(e) The Company shall terminate when (i) all of the assets of the
Company, after payment of or due provision for all debts, liabilities and
obligations of the Company shall have been distributed to the Member in the
manner provided for in this Agreement and (ii) the Certificate of Formation
shall have been canceled in the manner required by the Act.
Section 25. Waiver of Partition; Nature of Interest.
To the fullest extent permitted by law, each of the Member, the Special
Member, and the Springing Members hereby irrevocably waives any right or power
that such Person might have to cause the Company or any of its assets to be
partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
16
assets of the Company pursuant to any applicable law or to file a complaint or
to institute any proceeding at law or in equity to cause the dissolution,
liquidation, winding up or termination of the Company. The Member shall not have
any interest in any specific assets of the Company, and the Member shall not
have the status of a creditor with respect to any distribution pursuant to
Section 16 hereof. The interest of the Member in the Company is personal
property.
Section 26. Tax Status.
It is intended that the Company shall be a disregarded entity for
federal, state, and local income tax purposes.
Section 27. Benefits of Agreement; No Third-Party Rights.
Except for the Lender, its successors or assigns as holders of the
Loan with respect to the Special Purpose Provisions, (1) none of the provisions
of this Agreement shall be for the benefit of or enforceable by any creditor of
the Company or by any creditor of the Member or a Special Member, and (2)
nothing in this Agreement shall be deemed to create any right in any Person
(other than Covered Persons) not a party hereto, and this Agreement shall not be
construed in any respect to be a contract in whole or in part for the benefit of
any third Person, except as provided in Section 30. The Lender, its successors
or assigns are intended third-party beneficiaries of this Agreement and may
enforce the Special Purpose Provisions.
Section 28. Severability of Provisions.
Each provision of this Agreement shall be considered severable and if
for any reason any provision or provisions herein are determined to be invalid,
unenforceable or illegal under any existing or future law, such invalidity,
unenforceability or illegality shall not impair the operation of or affect those
portions of this Agreement which are valid, enforceable and legal.
Section 29. Entire Agreement.
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof.
Section 30. Binding Agreement.
The Member agrees that this Agreement, including, without limitation,
the Special Purpose Provisions, constitutes a legal, valid and binding agreement
of the Member, and is enforceable against the Member by the Independent
Directors, in accordance with its terms. In addition, the Independent Directors
shall be intended beneficiaries of this Agreement.
Section 31. Governing Law.
This Agreement shall be governed by and construed under the laws of the
State of Delaware (without regard to conflict of laws principles), all rights
and remedies being governed by said laws.
17
Section 32. Amendments.
Subject to Section 9(j), this Agreement may be modified, altered,
supplemented or amended pursuant to a written agreement executed and delivered
by the Member. Notwithstanding anything to the contrary in this Agreement, so
long as any Obligation is outstanding, this Agreement may not be modified,
altered, supplemented or amended unless the Lender consents in writing and the
Rating Agency Condition is satisfied except: (i) to cure any ambiguity or (ii)
to convert or supplement any provision in a manner consistent with the intent of
this Agreement and the other Basic Documents.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original of this Agreement and all of which together
shall constitute one and the same instrument.
Section 34. Notices.
Any notices required to be delivered hereunder shall be in writing and
personally delivered, mailed or sent by telecopy, electronic mail or other
similar form of rapid transmission, and shall be deemed to have been duly given
upon receipt (a) in the case of the Company, to the Company at its address in
Section 2, (b) in the case of the Member, to the Member at its address as listed
on Schedule B attached hereto and (c) in the case of either of the foregoing, at
such other address as may be designated by written notice to the other party.
Section 35. Effectiveness.
Pursuant to Section 18-201 (d) of the Act, this Agreement shall be
effective as of October 22, 2004.
Section 36. Interests and Certificates.
(a) Interests
Each limited liability company interest in the Company shall constitute
a "security" within the meaning of (i) Section 8-102(a)(15) of the Uniform
Commercial Code as in effect from time to time in the States of Delaware and New
York and (ii) the Uniform Commercial Code of any other applicable jurisdiction
that now or hereafter substantially includes the 1994 revisions to Article 8
thereof as adopted by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws and approved by the American Bar Association
on February 14, 1995. Notwithstanding any provision of this Agreement to the
contrary, to the extent that any provision of this Agreement is inconsistent
with any non-waivable provision of Article 8 of the Uniform Commercial Code as
in effect in the State of Delaware (6 Del C. ss. 8-101, et. seq.) (the "UCC"),
such provision of Article 8 of the UCC shall be controlling.
18
(b) Certificates.
(i) Upon the issuance of limited liability company
interests in the Company to any Person in accordance
with the provisions of this Agreement, without any
further act, vote or approval of any Member,
Director, Officer or any Person, the Company shall
issue one or more non-negotiable certificates in the
name of such Person substantially in the form of
Exhibit A hereto (a "Certificate"), which evidences
the ownership of the limited liability company
interests in the Company of such Person. Each such
Certificate shall be denominated in terms of the
percentage of the limited liability company interests
in the Company evidenced by such Certificate and
shall be signed by an Officer on behalf of the
Company.
(ii) Without any further act, vote or approval of any
Member, Director, Officer or any Person, the Company
shall issue a new Certificate in place of any
Certificate previously issued if the holder of the
limited liability company interests in the Company
represented by such Certificate, as reflected on the
books and records of the Company:
(A) makes proof by affidavit, in form and
substance satisfactory to the Company, that
such previously issued Certificate has been
lost, stolen or destroyed;
(B) requests the issuance of a new Certificate
before the Company has notice that such
previously issued Certificate has been
acquired by a purchaser for value in good
faith and without notice of an adverse
claim;
(C) if requested by the Company, delivers to the
Company a bond, in form and substance
satisfactory to the Company, with such
surety or sureties as the Company may
direct, to indemnify the Company against any
claim that may be made on account of the
alleged loss, destruction or theft of the
previously issued Certificate; and
(D) satisfies any other reasonable requirements
imposed by the Company.
(iii) Upon a Member's transfer in accordance with the
provisions of this Agreement of any or all limited
liability company interests in the Company
represented by a Certificate, the transferee of such
limited liability company interests in the Company
shall deliver such Certificate to the Company for
cancellation (executed by such transferee on the
reverse side thereof), and the Company shall
thereupon issue a new Certificate to such transferee
for the percentage of limited liability company
interests in the Company being transferred and, if
applicable, cause to be issued to such Member a new
Certificate for that percentage of limited liability
19
company interests in the Company that were
represented by the canceled Certificate and that are
not being transferred.
(c) Registration of Limited Liability Company Interests. The Company
shall maintain books for the purpose of registering the transfer of limited
liability company interests. Notwithstanding any provision of this Agreement to
the contrary, a transfer of limited liability company interests requires
delivery of an endorsed Certificate and shall be effective upon registration of
such transfer in the books of the Company.
[SIGNATURE PAGE FOLLOWS]
20
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have duly executed this Limited Liability Company Agreement as of the
22nd day of October, 2004.
MEMBER:
CEDAR-FRANKLIN VILLAGE 2 LLC
By: CEDAR SHOPPING CENTERS
PARTNERSHIP, L.P., its sole member
By: Cedar Shopping Centers, Inc., its
general partner
By:
-----------------------------------
Name: Brenda J. Walker
Title: Vice President
SPRINGING MEMBERS:
--------------------------------
Name: Suzanne M. Hay
Springing Member 1
--------------------------------
Name: Jan Koeman
Springing Member 2
S-1
SCHEDULE A
Definitions
A. Definitions
When used in this Agreement, the following terms not otherwise defined
herein have the following meanings:
"Act" has the meaning set forth in the preamble to this Agreement.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with such Person or any Person who has a familial relationship,
by blood, marriage or otherwise with the Company or any Affiliate of the
Company.
"Agreement" means this Limited Liability Company Agreement of the
Company, together with the schedules attached hereto, as amended, restated or
supplemented or otherwise modified from time to time.
"Bankruptcy" means, with respect to any Person, if such Person (i)
makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of this nature, (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Person
or of all or any substantial part of its properties, or (vii) if 120 days after
the commencement of any proceeding against the Person seeking reorganization,
arrangement, composition, readjustment, liquidation or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person's consent or
acquiescence of a trustee, receiver or liquidator of such Person or of all or
any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated. The foregoing definition of "Bankruptcy" is intended to replace
and shall supersede and replace the definition of "Bankruptcy" set forth in
Sections 18-101(1) and 18-304 of the Act.
"Basic Documents" means this Agreement, the Management Agreement, the
Loan Documents, and all documents and certificates contemplated thereby or
delivered in connection therewith.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
A-1
"Certificate of Formation" means the Certificate of Formation of the
Company filed with the Secretary of State of the State of Delaware on July 16,
2004, as amended or amended and restated from time to time.
"Change in Control of the Company" means (a) a transfer resulting in a
Person that owned less than 49% of the direct or indirect equity interests in
the Company upon the closing of the Loan owning 49% or more of such equity
interests after the transfer, (b) a transfer or transfers after the closing of
the Loan that aggregate of 49% or more of the direct or indirect equity
interests in the Company or (c) a change in the equity owners that Control the
Company.
"Company" means Cedar-Franklin Village LLC, a Delaware limited
liability company.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities or general partnership or managing
member interests, by contract or otherwise. "Controlling" and "Controlled" shall
have correlative meanings. Without limiting the generality of the foregoing, a
Person shall be deemed to Control any other Person in which it owns, directly or
indirectly, a majority of the ownership interests.
"Covered Persons" has the meaning set forth in Section 20(a).
"Directors" means the Persons elected to the Board of Directors from
time to time by the Member, including the Independent Directors, in their
capacity as managers of the Company. A Director is hereby designated as a
"manager" of the Company within the meaning of Section 18-101(10) of the Act.
"Independent Director" means a natural person who is not at the time of
initial appointment as a director or at any time while serving as a director or
manager of the Company and has not been at any time during the five (5) years
preceding such initial appointment:
(a) a stockholder, director (with the exception of serving as an
Independent Director of the Company), officer, trustee,
employee, partner, member, attorney or counsel of Company, the
Member or any Affiliate of either of them;
(b) a creditor, customer, supplier, or other person who derives
any of its purchases or revenues from its activities with the
Member, the Company or any Affiliate of either of them;
(c) a Person Controlling or under common Control with any Person
excluded from serving as Independent Director under (a) or
(b); or
(d) a member of the immediate family by blood or marriage of any
Person excluded from serving as Independent Director under (a)
or (b).
A natural person who satisfies the foregoing definition other than subparagraph
(b) shall not be disqualified from serving as an Independent Director of the
Company if such individual is an Independent Director provided by a
nationally-recognized company that provides professional independent directors
A-2
(a "Professional Independent Director") and other corporate services in the
ordinary course of its business. A natural person who otherwise satisfies the
foregoing definition other than subparagraph (a) by reason of being the
independent director of a "special purpose entity" affiliated with the Company
shall not be disqualified from serving as an Independent Director of the Company
if such individual is either (i) a Professional Independent Director or (ii) the
fees that such individual earns from serving as independent director of
affiliates of the Company constitute in the aggregate less than five percent
(5%) of such individual's annual income. Notwithstanding the immediately
preceding sentence, an Independent Director may not simultaneously serve as
Independent Director of the Company and independent director of a special
purpose entity that owns a direct or indirect equity interest in the Company or
a direct or indirect interest in any co-borrower with the Company.
For purposes of this paragraph, a "special purpose entity" is an entity, whose
organizational documents contain restrictions on its activities and impose
requirements intended to preserve such entity's separateness that are
substantially similar to the Special Purpose Provisions of this Agreement.
"Lender" means Eurohypo AG, New York Branch, together with its
successors and assigns.
"Loan" means that certain loan in the amount of $43,500,000 to be made
by Lender to the Company in accordance with the terms, conditions and provisions
of the Loan Documents.
"Loan Agreement" means that certain Loan Agreement dated _____, 2004,
by and between the Company and Lender.
"Loan Documents" has the meaning set forth in the Loan Agreement.
"Management Agreement" means the agreement of the Directors in
substantially the form attached hereto as Schedule C. The Management Agreement
shall be deemed incorporated into, and a part of, this Agreement.
"Material Action" means to file any insolvency, or reorganization case
or proceeding, to institute proceedings to have the Company be adjudicated
bankrupt or insolvent, to institute proceedings under any applicable insolvency
law, to seek any relief under any law relating to relief from debts or the
protection of debtors, to consent to the filing or institution of bankruptcy or
insolvency proceedings against the Company, to file a petition seeking, or
consent to, reorganization or relief with respect to the Company under any
applicable federal or state law relating to bankruptcy or insolvency, to seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian, or any similar official of or for the Company or a
substantial part of its property, to make any assignment for the benefit of
creditors of the Company, to admit in writing the Company's inability to pay its
debts generally as they become due, or to take action in furtherance of any of
the foregoing.
"Member" means Cedar-Franklin Village 2 LLC, as the initial member of
the Company, and includes any Person admitted as an additional member of the
Company or a substitute member of the Company pursuant to the provisions of this
A-3
Agreement, each in its capacity as a member of the Company; provided, however,
the term "Member" shall not include the Special Member or the Springing Members.
"Obligations" shall mean the indebtedness, liabilities and obligations
of the Company under or in connection with the Loan Documents.
"Officer" means an officer of the Company described in Section 11.
"Officer's Certificate" means a certificate signed by any Officer of
the Company who is authorized to act for the Company in matters relating to the
Company.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, limited liability partnership, association, joint
stock company, trust, unincorporated organization, or other organization,
whether or not a legal entity, and any governmental authority.
"Property" shall have the meaning given thereto in Section 7(a) of this
Agreement.
"Rating Agency" has the meaning assigned to that term in the Loan
Documents, or if no such defined term exists, means a nationally-recognized
rating agency that is rating or that has rated the Loan or any pool of loans of
which the Loan forms a part or any securities issued in connection with a
securitization of the Loan or such pool of loans.
"Rating Agency Condition" means with respect to any action taken at any
time after the loan evidenced and secured by the Loan Documents has been sold or
assigned to a securitization trust, that each Rating Agency shall have notified
the Company in writing that such action will not result in a reduction,
withdrawal, downgrade or qualification of the then current rating by such Rating
Agency of the Loan or any pool of loans of which the Loan forms a part, or of
any of securities issued by such securitization trust.
"Special Member" means, upon such person's admission to the Company as
a member of the Company pursuant to Section 5(c), a person acting as either
Springing Member 1 or Springing Member 2, in such person's capacity as a member
of the Company. A Special Member shall only have the rights and duties expressly
set forth in this Agreement.
"Special Purpose Entity" means an entity, whose organizational
documents contain restrictions on its purpose and activities and impose
requirements intended to preserve the its separateness that are substantially
similar to the Special Purpose Provisions of this Agreement.
"Springing Member" means a Person who is not a member of the Company
but who has signed this Agreement in order that, upon the conditions described
in Section 5(c), such Person can become the Special Member without any delay in
order that at all times the Company shall have at least one member.
A-4
B. Rules of Construction
Definitions in this Agreement apply equally to both the singular and
plural forms of the defined terms. The words "include" and "including" shall be
deemed to be followed by the phrase "without limitation." The terms "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Section, paragraph or
subdivision. The Section titles appear as a matter of convenience only and shall
not affect the interpretation of this Agreement. All Section, paragraph, clause,
Exhibit or Schedule references not attributed to a particular document shall be
references to such parts of this Agreement.
A-5
SCHEDULE B
Member
<TABLE>
<CAPTION>
-------------------------- -------------------------------- --------------------------- ----------------------------
Name Mailing Address Capital Contribution Membership Interest
-------------------------- -------------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Cedar-Franklin Village c/o Cedar Shopping Centers
2 LLC Partnership, L.P [] 100%
44 South Bayles Avenue, Suite
304, Port Washington, NY 11050
-------------------------- -------------------------------- --------------------------- ----------------------------
</TABLE>
B-1
SCHEDULE C
Management Agreement
______________________ __, 2004
Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue, Suite 304
Port Washington, NY 11050
Re: Management Agreement - Cedar Franklin Village LLC
Ladies and Gentlemen:
For good and valuable consideration, each of the undersigned Persons,
who have been designated as directors of Cedar-Franklin Village LLC, a Delaware
limited liability company (the "Company"), in accordance with the Limited
Liability Company Agreement of the Company, dated as of July 16 , 2004, as it
may be amended or restated from time to time (the "LLC Agreement"), hereby agree
as follows:
1. Each of the undersigned accepts such Person's rights and authority
as a Director under the LLC Agreement and agrees to perform and discharge such
Person's duties and obligations as a Director under the LLC Agreement, and
further agrees that such rights, authorities, duties and obligations under the
LLC Agreement shall continue until such Person's successor as a Director is
designated or until such Person's resignation or removal as a Director in
accordance with the LLC Agreement. Each of the undersigned agrees and
acknowledges that it has been designated as a "manager" of the Company within
the meaning of the Delaware Limited Liability Company Act.
2. So long as any Obligation is outstanding, each of the undersigned
agrees, solely in its capacity as a creditor of the Company on account of any
indemnification or other payment owing to the undersigned by the Company, not to
acquiesce, petition or otherwise invoke or cause the Company to invoke the
process of any court or governmental authority for the purpose of commencing or
sustaining an involuntary case against the Company under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Company or any substantial part of the property of the Company, or to the
fullest extent permitted by law, ordering the winding up or liquidation of the
affairs of the Company.
3. THIS MANAGEMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AND ALL RIGHTS AND REMEDIES
C-1
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Initially capitalized terms used and not otherwise defined herein have
the meanings set forth in the LLC Agreement.
This Management Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this Management
Agreement and all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Management
Agreement as of the day and year first above written.
------------------
Leo S. Ullman
------------------
Brenda J. Walker
------------------
Suzanne M. Hay
------------------
------------------
C-3
SCHEDULE D
DIRECTORS
---------
1. Leo S. Ullman
2. Brenda J. Walker
3. Suzanne M. Hay
SCHEDULE E
OFFICERS TITLE
Leo S. Ullman President
Brenda J. Walker Vice President and Treasurer
Stuart H. Widowski Secretary
Lise S. Oelbaum Assistant Secretary
Exhibit A
CERTIFICATE FOR LIMITED LIABILITY COMPANY INTERESTS IN CEDAR-FRANKLIN VILLAGE
LLC
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE. THE HOLDER OF
THIS CERTIFICATE, BY ITS ACCEPTANCE HEREOF, REPRESENTS THAT IT IS ACQUIRING THIS
SECURITY FOR INVESTMENT AND NOT WITH A VIEW TO ANY SALE OR DISTRIBUTION HEREOF.
ANY TRANSFER OF THIS CERTIFICATE OR ANY LIMITED LIABILITY COMPANY INTEREST
REPRESENTED HEREBY IS SUBJECT TO THE TERMS AND CONDITIONS OF THE LIMITED
LIABILITY COMPANY AGREEMENT (AS DEFINED BELOW).
Certificate Number 001 100% Percentage Interest
Cedar-Franklin Village LLC, a Delaware limited liability company (the
"Company"), hereby certifies that Cedar-Franklin Village 2 LLC (together with
any assignee of this Certificate, the "Holder") is the registered owner of 100
percent of the limited liability company interests in the Company. The rights,
powers, preferences, restrictions and limitations of the limited liability
company interests in the Company are set forth in, and this Certificate and the
limited liability company interests in the Company represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the Limited
Liability Company Agreement of the Company dated as of July 16, 2004, as the
same may be further amended or restated from time to time (the "Limited
Liability Company Agreement"). By acceptance of this Certificate, and as a
condition to being entitled to any rights and/or benefits with respect to the
limited liability company interests evidenced hereby, the Holder is deemed to
have agreed to comply with and be bound by all the terms and conditions of the
Limited Liability Company Agreement. The Company will furnish a copy of the
Limited Liability Company Agreement to the Holder without charge upon written
request to the Company at its principal place of business. Transfer of any or
all of the limited liability company interests in the Company evidenced by this
Certificate is subject to certain restrictions in the Limited Liability Company
Agreement and can be effected only after compliance with all of those
restrictions and the presentation to the Company of the Certificate, accompanied
by an assignment in the form appearing on the reverse side of this Certificate,
duly completed and executed by and on behalf of the transferor in such Transfer,
and an application for transfer in the form appearing on the reverse side of
this Certificate, duly completed and executed by and on behalf of the transferee
in such Transfer.
Each limited liability company interest in the Company shall constitute
a "security" within the meaning of (i) Section 8-102(a)(15) of the Uniform
Commercial Code as in effect from time to time in the States of Delaware and New
York and (ii) the Uniform Commercial Code of any other applicable jurisdiction
that now or hereafter substantially includes the 1994 revisions to Article 8
thereof as adopted by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws and approved by the American Bar Association
on February 14, 1995 (and each limited liability company interest in the Company
shall be treated as such a "security" for all purposes, including, without
limitation perfection of the security interest therein under Article 8 of each
applicable Uniform Commercial Code).
This Certificate and the limited liability company interests evidenced
hereby shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the Company has caused this Certificate to
be executed as of the date set forth below.
CEDAR FRANKLIN VILLAGE LLC
Dated: _____________________ By:
------------------
Name: Brenda J. Walker
Title: Vice President
(REVERSE SIDE OF CERTIFICATE)
ASSIGNMENT OF INTEREST
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________________________________ (print or typewrite name of
transferee), __________________ (insert Social Security or other taxpayer
identification number of transferee), the following specified percentage of
limited liability company interests in the Company: ______________ (identify the
percentage interest being transferred) effective as of the date specified in the
Application for Transfer of Interests below, and irrevocably constitutes and
appoints __________________________ and its authorized officers, as
attorney-in-fact, to transfer the same on the books and records of the Company,
with full power of substitution in the premises.
Dated: _________________ Signature: __________________________________
(Transferor)
Address: __________________________________
APPLICATION FOR TRANSFER OF INTERESTS
The undersigned applicant (the "Applicant") hereby (a) applies for a
transfer of the percentage of limited liability company interests in the Company
described above (the "Transfer") and applies to be admitted to the Company as a
substitute member of the Company, (b) agrees to comply with and be bound by all
of the terms and provisions of the Limited Liability Company Agreement, (c)
represents that the Transfer complies with the terms and conditions of the
Limited Liability Company Agreement, (d) represents that the Transfer does not
violate any applicable laws and regulations, and (e) agrees to execute and
acknowledge such instruments (including, without limitation, a counterpart of
the Limited Liability Company Agreement), in form and substance satisfactory to
the Company, as the Company reasonably deems necessary or desirable to effect
the Applicant's admission to the Company as a substitute member of the Company
and to confirm the agreement of the Applicant to be bound by all the terms and
provisions of the Limited Liability Company Agreement with respect to the
limited liability company interests in the Company described above. Initially
capitalized terms used herein and not otherwise defined herein are used as
defined in the Limited Liability Company Agreement.
The Applicant directs that the foregoing Transfer and the Applicant's
admission to the Company as a Substitute Member shall be effective as of
______________________________.
Name of Transferee (Print)
______________________________
Dated: ___________________ Signature: ________________________________
(Transferee)
Address: ________________________________
The Company has determined (a) that the Transfer described above is permitted by
the Limited Liability Company Agreement, (b) hereby agrees to effect such
Transfer and the admission of the Applicant as a substitute member of the
Company effective as of the date and time directed above, and (c) agrees to
record, as promptly as possible, in the books and records of the Company the
admission of the Applicant as a substitute member.
CEDAR-FRANKLIN VILLAGE LLC
By:
--------------------------------------
Name:
Title:
EXHIBIT 10.07
OPERATING AGREEMENT
OF
CEDAR-FRANKLIN VILLAGE 2 LLC
This OPERATING AGREEMENT (this "Agreement") of CEDAR-FRANKLIN VILLAGE 2
LLC (the "Company") is made and entered into to be effective for all purposes as
of October 21, 2004 by Cedar Shopping Centers Partnership, L.P. ("LP"), as the
sole equity member and such other persons as may from time to time be admitted
as members of the Company in accordance with the terms of this Agreement and the
Delaware Act (as that term is hereinafter defined). As used in this Agreement,
the term "Member" (whether one or more) shall mean LP and any other persons or
entities admitted as a member of the Company in accordance with this Agreement
and the Delaware Act (so long as they are members of the Company).
R E C I T A L S:
WHEREAS, the Company was formed as a limited liability company pursuant
to the Delaware Limited Liability Company Act, 6 Del. C. ss.ss. 18-101, et seq.
(as amended from time to time, the "Delaware Act"), by the filing of a
Certificate of Formation for the Company with the Secretary of State of
Delaware;
NOW, THEREFORE, the undersigned hereby adopts the following as its
"limited liability company agreement" (as that term is used in the Delaware
Act):
1. FORMATION. The Certificate of Formation, the formation of the
Company as a limited liability company under the Delaware Act, and all actions
taken by the person who executed and filed the Certificate of Formation are
hereby adopted and ratified. The affairs of the Company and the conduct of its
business shall be governed by the terms and subject to the conditions set forth
in this Agreement, as amended from time to time. The Member is hereby authorized
and directed to file any necessary amendments to the Certificate of Formation of
the Company in the office of the Secretary of State of the State of Delaware and
such other documents as may be required or appropriate under the Delaware Act or
the laws of any other jurisdiction in which the Company may conduct business or
own property.
2. NAME AND PRINCIPAL PLACE OF BUSINESS. The name of the Company is
Cedar-Franklin Village 2 LLC. The Member may change the name of the Company or
adopt such trade or fictitious names for use by the Company as the Member may
from time to time determine. All business of the Company shall be conducted
under such names and title to all assets or property owned by the Company shall
be held in such names. The principal place of business and office of the company
shall be c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles Avenue,
Suite 304, Port Washington, New York 11050, or at such other place or places as
the Member may from time to time designate.
3. REGISTERED AGENT AND REGISTERED OFFICE. The name of the Company's
registered agent for service of process is Corporation Service Company, and the
address of the Company's registered agent and the address of the Company's
registered office in the State of Delaware is 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19808. The registered agent and the registered office of
the Company may be changed from time to time by the Member.
4. TERM. The term of the Company shall be deemed to have commenced on
the filing of the Certificate of Formation in the office of Secretary of State
of the State of Delaware and shall continue until December 31, 2050, unless
sooner terminated or further extended pursuant to the provisions of this
Agreement by the Member. The existence of the Company as a separate legal entity
shall continue until cancellation of the Certificate of Formation as provided in
the Delaware Act.
5. PURPOSE. The purpose and business of the Company shall be to (a)
acquire and own a one hundred percent (100%) membership interest in
Cedar-Franklin Village LLC (the "Owner LLC"), whose
purposes are:
(i) to acquire, own, hold, lease, operate, manage, maintain, develop and
improve, the real property commonly known as "Franklin Village" located
in Franklin, Massachusetts (the "Property");
(ii) to enter into and perform its obligations under the documents
evidencing and/or securing a loan to Owner LLC (the "Loan Documents");
(iii) to sell, transfer, service, convey, dispose of, pledge, assign, borrow
money against, finance, refinance or otherwise deal with the Property
to the extent permitted under the Loan Documents; and
(iv) to engage in any lawful act or activity and to exercise any powers
permitted to limited liability companies organized under the laws of
the State of Delaware that are related or incidental to and necessary,
convenient or advisable for the accomplishment of the above-mentioned
purposes;
and (b) engage in any activity and take any action which limited liability
companies may take that is incidental, necessary and appropriate to accomplish
the foregoing.
6. MEMBERS.
(a) LP, whose address is set forth opposite its name in the
signature page of this Agreement, is the sole member of the Company and shall be
shown as such on the books and records of the Company. Except as expressly
permitted by this Agreement, no other person shall be admitted as a member of
the Company, and no additional interest in the Company shall be issued, without
the approval of the Member.
(b) Notwithstanding any other provision of this Agreement, the
Bankruptcy of the Member shall not cause the Member to cease to be a member of
the Company and upon the occurrence of such an event, the business of the
Company shall continue without dissolution. For purposes of this Section 6,
2
Bankruptcy means, with respect to any person or entity, if such person or entity
(i) makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has entered
against it an order for relief, in any bankruptcy or insolvency proceedings,
(iv) files a petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation or similar relief under any
statute, law or regulation, (v) files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against it in
any proceeding of this nature, (vi) seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the person or entity or of
all or any substantial part of its properties, or (vii) if 120 days after the
commencement of any proceeding against the person or entity seeking
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, if the proceeding has not been
dismissed, or if within 90 days after the appointment without such person's or
entity's consent or acquiescence of a trustee, receiver or liquidator of such
person or entity or of all or any substantial part of its properties, the
appointment is not vacated or stayed, or within 90 days after the expiration of
any such stay, the appointment is not vacated. The foregoing definition of
"Bankruptcy" is intended to replace and shall supersede and replace the
definition of "Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the
Delaware Act.
7. MANAGEMENT. In accordance with Section 18-402 of the Delaware Act,
management of the Company shall be vested in the Member. The Member shall have
the power to do any and all acts necessary, convenient or incidental to or for
the furtherance of the purposes described herein, including all powers,
statutory or otherwise, possessed by members of a limited liability company
under the laws of the State of Delaware. The Member has the authority to bind
the Company. Notwithstanding anything to the contrary contained herein, the
provisions of this Section 7 are subject to the provisions contained in Section
20 hereof.
8. OFFICERS. The Member may, from time to time as it deems advisable,
appoint officers of the Company (the "Officers") and assign in writing titles
(including, without limitation, President, Vice President, Secretary, Assistant
Secretary and Treasurer) to any such person. Unless the Member decides
otherwise, if the title is one commonly used for officers of a business
corporation formed under the General Corporation Law of the State of Delaware,
the assignment of such title shall constitute the delegation to such person of
the authorities and duties that are normally associated with that office. Any
delegation pursuant to this Section 8 may be revoked at any time by the Member.
The Member hereby initially appoints Leo S. Ullman, President; Brenda J. Walker,
Vice President and Treasurer, Stuart H. Widowski, Secretary and Lise S. Oelbaum,
Assistant Secretary.
9. INITIAL CAPITAL CONTRIBUTION. The Member has contributed to the
Company an initial contribution to the capital of the Company.
10. ADDITIONAL CAPITAL CONTRIBUTIONS. The Member is not required to
contribute any additional capital to the Company other than the initial
contributions heretofore made. The Member will not have any obligation to
restore any negative or deficit balance in its capital account, including any
negative or deficit balance in its capital account upon liquidation and
3
dissolution of the Company. Any additional funds required by the Company to meet
its cash requirements shall, to the extent possible, be provided by Company
borrowings from third parties, upon such terms and conditions as determined
appropriate by the approval of the Member; provided, however, that in lieu of
causing the Company to borrow from third parties, the Member may from time to
time make additional capital contributions to the Company.
11. TAX MATTERS. The undersigned intend for the Company to be treated
as a partnership for federal income tax purposes if the Company has two or more
members, and otherwise as an entity that is disregarded as an entity separate
from its owner for federal income tax purposes pursuant to Treasury Regulation
Section 301.7701-3.
12. DISTRIBUTIONS. The Company shall, as soon as reasonably practical,
make monthly distributions and biannual adjusting distributions of the Company's
net cash flow available for distribution, including distributions of net cash
flow from operations, net proceeds of any interim capital transaction and net
proceeds available upon dissolution and winding up of the Company (such net cash
flow, net proceeds from interim capital transactions and net proceeds upon
dissolution and winding up of the Company being herein sometimes referred to as
the "Distributable Cash") (in each case after establishment of appropriate and
reasonable reserves) to the Member. Notwithstanding any provision to the
contrary contained in this Agreement, the Company, or any member on behalf of
the Company, shall not be required to make a distribution to the Member on
account of its interest in the Company if such distribution would violate the
Delaware Act or any other applicable law.
13. DISSOLUTION AND TERMINATION.
(a) The Company shall be dissolved and its business wound up
upon the earliest to occur of any of the following events:
(i) The expiration of the term of the Company;
(ii) The sale of all or substantially all of the
Company's assets.
(iii) The termination of the legal existence of the
last remaining member of the Company or the occurrence of any
other event which terminates the continued membership of the
last remaining member of the Company in the Company unless the
business of the Company is continued in a manner permitted by
this Agreement or the Delaware Act; or
(iv) The entry of a decree of judicial dissolution
under Section 18-802 of the Delaware Act.
Upon the occurrence of any event that causes the last
remaining member of the Company to cease to be a member of the Company, to the
fullest extent permitted by law, the personal representative of such member is
hereby authorized to, and shall, within 90 days after the occurrence of the
event that terminated the continued membership of such member in the Company,
4
agree in writing (i) to continue the Company and (ii) to the admission of the
personal representative or its nominee or designee, as the case may be, as a
substitute member of the Company, effective as of the occurrence of the event
that terminated the continued membership of the last remaining member of the
Company in the Company.
(b) Intentionally omitted.
(c) The Company shall not dissolve, liquidate or terminate
upon the death, Bankruptcy, insolvency, dissolution, liquidation, termination,
resignation, or removal of the Member.
(d) Upon dissolution, the Company's business shall be
liquidated in an orderly manner. The Member shall act as the liquidating trustee
to wind up the business of the Company pursuant to this Agreement. If there
shall be no remaining Member, the successor-in-interest of the Member may
approve one or more liquidating trustees to act as the liquidator in carrying
out such liquidation. In performing its duties, the liquidator is authorized to
sell, distribute, exchange or otherwise dispose of the assets of the Company in
accordance with the Delaware Act and in any reasonable manner that the
liquidator shall determine to be in the best interest of the Member or its
successors-in-interest.
(e) In the event it becomes necessary in connection with the
liquidation of the Company to make a distribution of property in kind, such
property shall be transferred and conveyed to the Member.
(f) The Company shall terminate when (i) all of the assets of
the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Member in the
manner provided for in this Agreement and (ii) the Certificate of Formation of
the Company shall have been canceled in the manner required by the Delaware Act.
14. INDEMNIFICATION. The Member shall not be liable to the Company for
monetary damages for any losses, claims, damages or liabilities arising from any
act or omission performed or omitted by it arising out of or in connection with
this Agreement or the Company's business or affairs, except for any such loss,
claim, damage or liability primarily attributable to the Member's fraud, gross
negligence or willful misconduct. The Company shall, to the fullest extent
permitted by applicable law, indemnify, defend and hold harmless the Member
against any losses, claims damages or liabilities to which the Member may become
subject in connection with any matter arising out of or in connection with this
Agreement or the Company's business or affairs, except for any such loss, claim,
damage or liability primarily attributable to the Member's fraud, gross
negligence or willful misconduct. If the Member becomes involved in any capacity
in any action, proceeding or investigation in connection with any matter arising
out of or in connection with this Agreement or the Company's business or
affairs, the Company shall reimburse the Member for its reasonable legal fees
and other reasonable out-of-pocket expenses (including the cost of any
5
investigation and preparation) as they are incurred in connection therewith,
provided that the Member shall promptly repay to the Company the amount of any
such reimbursed expenses paid to it if it shall ultimately be determined that
the Member was not entitled to be indemnified by the Company in connection with
such action, proceeding or investigation. If for any reason (other than the
fraud, gross negligence or willful misconduct of the Member) the foregoing
indemnification is unavailable to the Member, or insufficient to hold it
harmless, then the Company shall contribute to the amount paid or payable by the
Member as a result of such loss, claim, damage, liability or expense in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Member on the other hand or, if such allocation
is not permitted by applicable law, to reflect not only the relative benefits
referred to above but also any other relevant equitable considerations. The
provisions of this Paragraph 14 shall survive any termination of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations of the Company or the Member under this Paragraph 14 shall (i) be in
addition to any liability which the Company or the Member may otherwise have and
(ii) inure to the benefit of the Member, its affiliates and their respective
members, directors, officers, employees, agents and affiliates and any
successors, assigns, heirs and personal representatives of such persons.
15. LIABILITY OF THE MEMBER. Except as otherwise expressly provided in
the Delaware Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and the Member shall not be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being the member. Except as otherwise expressly provided in the Delaware Act,
the liability of the Member shall be limited to the amount of capital
contributions, if any, required to be made by the Member in accordance with the
provisions of this Agreement, but only when and to the extent the same shall
become due pursuant to the provisions of this Agreement.
16. WAIVER OF PARTITION AND NATURE OF INTEREST IN THE COMPANY. To the
fullest extent permitted by law, the Member hereby irrevocably waives any right
or power that the Member might have to cause the Company or any of its assets to
be partitioned, to cause the appointment of a receiver for all or any portion of
the assets of the Company, to compel any sale of all or any portion of the
assets of the Company pursuant to any applicable law, or to file a complaint or
to institute any proceeding at law or in equity to cause the termination,
dissolution and liquidation of the Company. The Member has been induced to enter
into this Agreement in reliance upon the waivers set forth in this Paragraph 16,
and without such waivers, the Member would not have entered into this Agreement.
The Member shall not have any interest in any specific assets of the Company.
17. BOOKS, RECORDS, ACCOUNTING AND REPORTS. The Company shall maintain,
or cause to be maintained, in a manner customary and consistent with good
accounting principles, practices and procedures, a comprehensive system of
office records, books and accounts (which records, books and accounts shall be
and remain the property of the Company) in which shall be entered fully and
accurately each and every financial transaction with respect to the ownership
and operation of the property of the Company. Such books and records of account
shall be prepared and maintained at the principal place of business of the
6
Company or such other place or places as may from time to time be determined by
the Member. The Member or its duly authorized representative shall have the
right to inspect, examine and copy such books and records of account at the
Company's office during reasonable business hours. A reasonable charge for
copying books and records may be charged by the Company. The books of the
Company shall be kept on the accrual basis in accordance with generally accepted
accounting practices and principles. The Company shall report its operations for
tax purposes on the accrual method. The fiscal year of the Company shall end on
December 31 of each year, unless a different fiscal year is elected by the
Member and acceptable by the Code.
18. THE COMPANY ACCOUNTANT. The Company shall retain as the regular
accountant and auditor for the Company (the "Company Accountant") a
nationally-recognized accounting firm designated by the Member. The fees and
expenses of the Company Accountant shall be a Company expense.
19. MISCELLANEOUS.
(a) Further Assurances. The Member agrees to execute,
acknowledge, deliver, file, record and publish such further instruments and
documents, and do all such other acts and things as may be required by law, or
as may be required to carry out the intent and purposes of this Agreement.
(b) Successors and Assigns. This Agreement shall be binding
upon the Member and its respective executors, administrators, legal
representatives, heirs, successors and assigns.
(c) Severability. In case any one or more of the provisions
contained in this Agreement or any application thereof shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein and any other application thereof
shall not in any way be affected or impaired thereby.
20. SPE REQUIREMENTS.
(a) The purpose of the Company is limited to the purpose
described in Paragraph 5 hereof.
(b) The Company's ability to incur indebtedness is limited to
equipment leasing, equipment financing and trade payables incurred in the
ordinary course of business, relating to its role as sole member of the Owner
LLC.
(c) The Company shall:
(i) Maintain books and records separate from any
other person or entity;
7
(ii) Maintain its bank accounts separate from any
other person or entity;
(iii) Not commingle assets with those of any other
entity and shall hold all of its assets in its own name;
(iv) Conduct its own business in its own name;
(v) Maintain separate financial statements, provided,
however, that in lieu thereof, the Company's assets may be
included in a consolidated financial statement of its
affiliate;
(vi) Pay its own liabilities out of its own funds;
(vii) Except for capital contributions or capital
distributions permitted under the terms of this Agreement, not
enter into any transaction with an affiliate except on
commercially reasonable terms similar to those available to
unaffiliated parties in an arm's length transaction;
(viii) Pay the salaries of its own employees, if any,
and maintain a sufficient number of employees in light of its
contemplated business operations;
(ix) Not guarantee or become obligated for the debts
of any other entity or hold out its credit as being available
to satisfy the obligations of others;
(x) Not acquire obligations or securities of its
Member;
(xi) Allocate fairly and reasonably any overhead for
shared office space;
(xii) Use separate stationery, invoices and checks;
(xiii) Not pledge its assets for the benefit of any
other entity;
(xiv) Hold itself out as a separate entity;
(xv) Correct any known misunderstanding regarding its
separate identity;
(xvi) Maintain adequate capital in light of its
contemplated business operations;
(xvii) Not identify itself as a division of any other
person or entity;
8
(xviii) Not hold, form or acquire any subsidiaries
other than Owner LLC;
(xix) Not make loans to any other person or entity or
hold or buy evidence of indebtedness issued by another person
or entity;
(xx) Observe all limited liability company
formalities; and
(xxi) File its tax returns separate from any other
entity, except to the extent that the Company is treated as a
"disregarded entity" for tax purposes and is not required to
file tax returns under applicable law .
21. NON-COMPLIANCE. Failure of the Company, or the Member on behalf of
the Company, to comply with any of the foregoing covenants or any other
covenants contained in this Agreement shall not affect the status of the Company
as a separate legal entity or the limited liability of the Member.
22. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware (without regard to conflict of laws
principles), all rights and remedies being governed by said laws.
9
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth in the introductory paragraph hereof.
Address Member
44 South Bayles Avenue, Suite 304 CEDAR SHOPPING CENTERS
Port Washington, New York 11050 PARTNERSHIP, L.P.
By: Cedar Shopping Centers, Inc.,
its general partner
By:
----------------------------
Brenda J. Walker
Vice President
10
EXHIBIT 10.08
LEASE AGREEMENT
ARTICLE I - PARTIES
This Lease Agreement (hereinafter "Lease" or "Agreement") made this
_____ day of ___________, 2004.
Cedar-Franklin Village LLC, a Delaware limited liability company,
having an office c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Port Washington, New York 11050 (hereinafter "LANDLORD") which
expression shall include their heirs, successors, and assigns where the context
so admits, does hereby lease to Calarese Properties, Inc., a Massachusetts
corporation with an address at 1000 Franklin Village Drive, Franklin,
Massachusetts 02031 (hereinafter "TENANT"), which expression shall include their
heirs, successors, and assigns where the context so admits, and the TENANT
hereby leases from the LANDLORD the following described premises:
ARTICLE II - LEASED PREMISES
Suite 301 in the Executive Center at Franklin Village, (hereinafter the
"Office Building") Route 140, Franklin, Massachusetts, consisting of
approximately One Thousand Seven Hundred Eighty Six (1,786) square feet inside
the Office Building currently occupied by Calarese Development Corporation
(hereinafter the "Leased Premises") , together with the right to use, in common
with others entitled thereto, the hallways, stairways and elevators necessary
for access to the Leased Premises and lavatories nearest thereto, along with the
right to use, in common with others entitled thereto, parking area and sidewalks
(the "Common Area") shown within the area labeled "Office Building Parcel" on
Exhibit A attached hereto and made a part hereof (hereinafter the "Office
Building Parcel"), but reserving and excepting to LANDLORD the use of the
demising walls, the area above the ceilings of the Leased Premises and the right
to install, maintain, use, repair and replace pipes, ducts, conduits, wires and
appurtenant fixtures leading through the Leased Premises in locations which will
not materially interfere with TENANT'S use thereof.
ARTICLE III - TERM
3.1 The term (the "Term") of this Lease shall be for three (3) years,
as hereinafter provided, commencing upon November 1, 2004 (the "Commencement
Date").
In the event that the Term shall commence on a day other than the first
of the month, then rent shall be immediately paid for such fractional month,
prorated on the basis of a thirty (30) day month, and for the purposes of
determining the date of expiration of this Lease or anniversary dates of the
Commencement Date of this Lease, the Term of the Lease shall be deemed to
commence on the first day of the calendar month next succeeding. A pro rata
monthly installment of minimum annual rent shall be due on the first day of the
last calendar month of the Term to cover rent for the last month of the term if
the Term for any reason terminates on a day other than the last day of a
calendar month. The pro rata calculation will be based on a thirty (30) day
month.
By taking occupancy of the Leased Premises, TENANT shall be deemed to
have accepted the Leased Premises, to have acknowledged that the same are in the
condition called for hereunder and to have agreed that as of that time, all of
the obligations of the LANDLORD imposed under this Lease shall have been
performed.
ARTICLE IV - RENT
4.1 TENANT hereby covenants and agrees to pay during the Term hereof
(and at the rate for any partial month at the commencement of the term), initial
minimum annual rent of Thirty Nine Thousand Seven Hundred Fifty-Six Dollars and
Thirty-Six Cents ($39,756.36), payable without deduction, setoff or demand, in
equal monthly installments of Three Thousand Three Hundred Thirteen Dollars and
Three Cents ($3,313.03).The first monthly installment of minimum annual rent
shall be due upon the execution of the Lease and continuing to be payable
thereafter on the first day of each succeeding calendar month throughout the
Term.
There shall be added to any rent due hereunder, whether minimum or
additional, or any other sums due, which are not paid within ten (10) days of
the date that the same first became due, a late charge equal to ten percent
(10%) of the amount so overdue, which amount shall not be deemed a penalty, but
shall merely compensate Landlord for a portion of Landlord's expenses caused by
Tenant's late payment.
ARTICLE V - INTENTIONALLY OMITTED
ARTICLE VI - INTENTIONALLY OMITTED
ARTICLE VII - SERVICES AND UTILITIES
TENANT shall pay, as they become due, all bills for utilities furnished
to the Leased Premises except as otherwise specifically herein provided.
Notwithstanding the above, the LANDLORD agrees to pay for gas or electricity
utilized to heat or cool water utilized in the heating and air conditioning
system serving the Leased Premises, and to furnish hot and cold water to the
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lavatories in the Leased Premises and in the common area of the Office Building
and reasonable heat and air conditioning to the hallways, stairways, and
lavatories during normal business hours on regular business days (which shall
not include Sundays and holidays as set forth in Exhibit B attached hereto and
made a part hereof) of the heating and air conditioning seasons of each year, to
furnish elevator service and to light passageways and stairways during such
regular business hours and to furnish such cleaning service to the common area
of the Office Building as is customary in similar buildings in said city or
town, all subject to interruption due to any accident, to the making of repairs,
alterations, or improvements, to labor difficulties, to difficulty in obtaining
fuel, electricity, service or supplies from the sources from which they are
usually obtained for said building, or to any cause beyond LANDLORD'S control.
LANDLORD shall have no obligation to provide utilities or equipment
other than the utilities and equipment within the Leased Premises as of the
commencement date of this Lease. In the event TENANT requires additional
utilities or equipment, the installation and maintenance thereof shall be the
TENANT'S sole obligation, provided that such installation shall be subject to
written consent of the LANDLORD.
ARTICLE VIII - USE OF LEASED PREMISES
The TENANT shall use the Leased Premises only for general office use,
and for no other purpose.
ARTICLE IX - COMPLIANCE WITH LAWS
The TENANT acknowledges that no trade or occupation shall be conducted
in the Leased Premises or use made thereof which will be unlawful, improper,
noisy or offensive, or contrary to any present or future law, ordinance or
regulation of any State or Federal, municipal and local governments, including
but not limited to any activity which impairs or interferes with any of the
Building Systems (hereinafter defined) in the Office Building.
ARTICLE X - INSURANCE
10.1 Throughout the term hereof, LANDLORD shall maintain a policy of
insurance on the Office Building against damage by fire and such other risks
covered by the so-called Extended Coverage endorsement to the extent of not less
than the insurable replacement value thereof. Such policy or policies shall be
issued by responsible insurance companies.
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In the case of any loss or damage covered by such insurance, the
proceeds of such insurance shall, subject to the provisions of Landlord's
mortgage and the agreement of its mortgagee, be devoted by LANDLORD, so far as
may be required hereunder, to the repair, rebuilding or restoration of the
Office Building, provided, however, that this Lease shall not have been
terminated.
10.2 TENANT shall procure such insurance on its improvements and
personal property as it deems appropriate.
10.3 TENANT agrees to maintain with respect to the Leased Premises,
Office Building, and Office Building Parcel, broad form commercial general
liability insurance with limits in the amount of One Million Dollars
($1,000,000.00) per occurrence and property damage liability insurance in the
amount of Five Hundred Thousand Dollars ($500,000.00) per occurrence and to
submit copies of such policies and certificates of such insurance to LANDLORD.
The insurers under such policies shall be satisfactory to LANDLORD and such
policies shall name as insured parties LANDLORD and TENANT, as their interests
may appear, and shall provide thirty (30) days' prior written notice to LANDLORD
of lapse or cancellation. In the event TENANT shall fail to obtain such
insurance, LANDLORD may, but shall not be obligated to, purchase such insurance
on behalf of TENANT, and TENANT shall pay to Landlord the cost of such insurance
upon demand by LANDLORD.
10.4 TENANT will not do or omit any act, or keep anything in, upon or
about the Leased Premises, the Office Building or the Office Building Parcel
which may prevent or impair obtaining and maintaining any fire, liability or
other insurance upon or written in connection with the Leased Premises, the
Office Building or the Office Building Parcel or which may make any such
insurance void or voidable or otherwise invalidate the obligations of the
insurer contained therein, or which may create any extra premiums or increase
the rate of any such insurance over that normally applicable to office
buildings. TENANT agrees to pay to LANDLORD, upon demand, the amount of any
extra premiums or any increase in the rate of such insurance which results from
TENANT'S occupancy of or conduct in the Leased Premises, whether or not LANDLORD
has consented to such business. IF TENANT installs any electrical equipment that
overloads the lines in accordance with the provisions hereof, it shall make
whatever changes are necessary to comply with the requirements of the insurance
underwriter or governmental authorities having jurisdiction.
ARTICLE XI - MAINTENANCE
11.1 TENANT shall at its own cost and expense maintain the Leased
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Premises in good condition, ordinary wear and tear, damage by fire and other
casualty, damage occasioned solely by reason of acts and omissions of LANDLORD,
and taking by eminent domain, only excepted, and whenever necessary, to replace
plate glass and other glass therein, acknowledging as of the Commencement Date
of this Lease that the Leased Premises are in good order and the glass whole.
The TENANT shall not permit the Leased Premises to be overloaded, damaged,
stripped, or defaced, nor suffer any waste.
TENANT shall furnish the Leased Premises in a neat and attractive
manner, and shall maintain the Leased Premises in a clean, orderly, and
professional condition at all times during this Lease or any extension thereof.
11.2 The LANDLORD agrees to maintain the structure, including the roof
and foundation, and the Common Area of the Office Building and the HVAC,
electrical, and plumbing systems serving the Building in the same condition as
they are at the commencement of the term, reasonable wear and tear, damage by
fire, taking by eminent domain, and damage insured against and with respect to
which TENANT obtains proceeds of insurance only excepted, unless such
maintenance is required because of TENANT or those for whose conduct the TENANT
is legally responsible.
11.3 TENANT agrees to give prompt notice in writing to LANDLORD of any
defective condition or the need for repairs in the Leased Premises for which
LANDLORD is responsible under this Article XI. LANDLORD shall have a reasonable
opportunity to repair the same or cure such defect.
ARTICLE XII - CONSTRUCTION AND ALTERATIONS
12.1 TENANT has inspected the Leased Premises and has agreed to accept
the Leased Premises in "As Is" condition, with all faults, and without
representation or warranty by LANDLORD with respect to any matter, all implied
warranties being hereby expressly waived. LANDLORD shall have no obligation to
perform any work in connection with the Leased Premises, whether on or off-site,
and shall have no obligation to apply for or obtain any governmental consents or
permits.
Any additional work required for TENANT to use the Leased Premises for
the intended purpose shall be at the sole cost and expense of TENANT. Any
equipment or work which the LANDLORD installs or constructs in the Leased
Premises on the TENANT'S behalf and at the TENANT'S request shall be paid for by
TENANT within fifteen (15) days after receipt of a bill therefor at cost, plus
fifteen percent (15%) for overhead and supervision.
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12.2 Any work required for TENANT to use the Leased Premises for the
intended purpose shall be at the sole cost and expense of TENANT and shall be
deemed to be "Tenant's Work". TENANT shall make no alterations of any nature
without (i) LANDLORD'S prior written consent, and (ii) TENANT submitting to
LANDLORD plans and specifications, in accordance with Section 12.3 below. In no
event shall TENANT's alterations affect the Building's structure or electrical,
mechanical, plumbing or HVAC systems(the "Building Systems").
12.3 TENANT shall prepare, at its sole cost and expense, complete plans
and specifications prepared by a professional architect or engineer for all
Tenant's Work, whether original or alterations, in such detail as LANDLORD may
require and in compliance with all applicable statutes, ordinances, regulations
and codes. TENANT shall submit such plans and specifications to LANDLORD or
LANDLORD'S designated representative for written approval prior to commencement
of any work, together with the name of the contractor or contractors to perform
such work. All contractors or others performing work on the Leased Premises
shall be approved in writing by LANDLORD. TENANT shall employ only such labor as
will not cause any conflict or controversy with any labor organization
representing trades performing work for LANDLORD or others in the Office
Building Parcel, or any part thereof, including the Leased Premises. TENANT
shall obtain all permits and approvals prior to commencing Tenant's Work. All
such allowed alterations shall be at TENANT'S expense, shall be in quality at
least equal to the contemplated or then existing construction, as the case may
be, and shall be prosecuted diligently and completed in a good and workmanlike
manner.
12.4 Any alterations or improvements made by the TENANT shall become
the property of the LANDLORD at the termination of occupancy as provided herein;
provided, however, that TENANT shall be obligated to remove such improvements,
fixtures and equipment at the said termination of occupancy as LANDLORD shall
request prior to such termination, the TENANT being obligated to repair any
damage which such removal may cause. TENANT agrees that any window treatments
installed by TENANT in the Leased Premises which are visible from the exterior
of the Leased Premises shall be of a type and color to be determined by LANDLORD
or shall be approved in advance by LANDLORD, which approval may be withheld for
any reason.
12.5 TENANT shall not suffer or permit any liens to stand against the
Leased Premises or Office Building or Office Building Parcel by reason of work,
labor, services or materials done for or at the request of TENANT. TENANT shall
cause any such lien to be discharged within five (5) days after the date of
filing thereof. If TENANT shall fail to take such action as shall cause such
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lien to be discharged within five (5) days after the filing of such notice,
LANDLORD may pay the amount of such lien or discharge the same by deposit or
bonding proceedings, and in the event of such deposit or bonding proceedings,
LANDLORD may require the lienor to prosecute an appropriate action to enforce
the lienor's claim and may pay any judgment recovered on such claim. In the
event that LANDLORD does any of the things it is by this paragraph empowered to
do, TENANT shall promptly reimburse LANDLORD for any sums expended by LANDLORD
in connection therewith, including any sum paid in discharge of any lien or
judgment, for premiums on bonds, or for attorney's fees. All such sums shall be
payable upon demand with interest at the rate of eighteen percent (18%) per
annum.
12.6 LANDLORD may, from time to time, enter the Leased Premises to
perform construction work or make improvements, benefiting the common area of
the Office Building or other tenants of the Office Building. LANDLORD agrees to
give reasonable advance notice (except in the case of an emergency where no
advance notice shall be required) to TENANT of LANDLORD'S need to enter the
Leased Premises for such purposes and agrees to perform such work in a manner
which will minimize any disruption to TENANT within the Leased Premises.
ARTICLE XIII - ASSIGNMENT/SUBLEASING
TENANT agrees not to sell, assign, mortgage, pledge, franchise or in
any manner transfer this Lease or any estate of interest thereunder and not to
sublet the Leased Premises or any part or parts thereof and not to permit any
licensee or concessionaire therein without the previous written consent of the
LANDLORD in each instance first obtained. Notwithstanding the above, TENANT may
sublet all or a portion of the Premises provided that (i) the terms of such
sublease agreement and the identity of such sublessee shall be approved in
advance by LANDLORD (such approval not to be unreasonably withheld, conditioned
, or delayed) and (ii) LANDLORD shall be entitled to receive any rent or
payments received by TENANT on account of such sublease which is, on a square
foot basis, in excess of the rent paid by TENANT to LANDLORD on a square foot
basis hereunder. Consent by LANDLORD to one assignment of this Lease or to one
subletting, sale, mortgage, pledge or other transfer including licensing or the
grant of a concession shall not be a waiver of LANDLORD'S right under this
Article as to any subsequent similar action. Notwithstanding any assignment or
subletting, TENANT shall remain fully liable on this Lease and shall not be
released from performing any of the terms, covenants and conditions of this
Lease. This prohibition includes any subletting or assignment which would
otherwise occur by operation of law. In connection with any request by TENANT to
assign or sublet this Lease, TENANT shall pay to LANDLORD, upon demand, any and
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all legal fees incurred by LANDLORD related to said request or the proposed
assignment.
LANDLORD'S rights to assign this Lease are and shall remain
unqualified. Upon any sale of the Leased Premises and provided the purchaser
assumes all obligations under this Lease, LANDLORD shall thereupon be entirely
freed of all obligations of the LANDLORD hereunder and shall not be subject to
any liability resulting from any act or omission or event occurring after such
conveyance. LANDLORD shall give TENANT notice of any transfer or assignment of
this Lease. Upon the sale or other transfer of LANDLORD'S interest in this
Lease, TENANT agrees to recognize and attorn to such transferee as LANDLORD, and
TENANT further agrees to execute and deliver a recordable instrument setting
forth the provisions of this paragraph.
ARTICLE XIV - SUBORDINATION
This Lease is and shall be subject and subordinate to all matters of
record, including without limitation, ground leases and mortgages, any of which
may now or hereafter be placed on or affect the Leased Premises, or any part
thereof and to each advance made or to be made under any part thereof and to
each advance made or to be made under any such mortgages, and to all renewals,
modifications, consolidations, replacements and extensions thereof and all
substitutions therefor, provided that said mortgagee or ground LANDLORD agrees
in writing delivered to TENANT to recognize this Lease, and not to disturb
TENANT'S rights thereunder, and provided further that to the extent that the
TENANT has agreed or does agree with LANDLORD'S first mortgagee not to
subordinate this Lease to any second mortgage or ground lease without such first
mortgagee's consent, then this Lease shall not be deemed subordinate to any
second mortgage or ground lease until such consent is received from such
mortgagee. This Article shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, TENANT
shall execute and deliver promptly any certificate that LANDLORD and/or any
mortgagee and/or LANDLORD under any ground or underlying lease and/or their
respective successors may require and TENANT hereby appoints LANDLORD and/or any
mortgagee and/or the LANDLORD under any ground or underlying lease and/or their
respective successors in interest as TENANT'S attorney-in-fact to execute and
deliver any such certificate or certificates for, in the name of and on behalf
of TENANT should TENANT not deliver the same to LANDLORD within the ten (10)
days of LANDLORD'S request therefor.
Without limitation of any of the provisions of this Lease, if any
ground LANDLORD or mortgagee shall succeed to the interest of LANDLORD by reason
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of the exercise of its rights under such ground lease or mortgage (or the
acceptance of voluntary conveyance in lieu thereof) or the expiration or sooner
termination of such ground lease, however caused, then such successor shall give
written notice to TENANT (which in the case of a ground lease shall be within
thirty (30) days after such expiration or sooner termination) that it is
succeeding to the interest of LANDLORD under this Lease; and in such event, the
TENANT shall attorn to such successor and shall ipso facto be and become bound
directly to such successor in interest to LANDLORD to perform and observe all
the TENANT'S obligations under this Lease without the necessity of the execution
of any further instrument. Nevertheless, TENANT agrees at any time and from time
to time during the term hereof to execute a suitable instrument in confirmation
of TENANT'S agreement to LANDLORD, and/or the ground LANDLORD, or such
mortgagee, and/or their respective assigns and TENANT'S attorney-in-fact, to
execute and deliver any such agreement of attornment for and on behalf of
TENANT.
ARTICLE XV - LANDLORD'S ACCESS
The LANDLORD or agents of the LANDLORD may, upon reasonable prior
notice (except no notice shall be necessary in the event of an emergency), at
reasonable times, enter to view the Leased Premises and may remove placards and
signs not approved and affixed as herein provided, and make repairs and
alterations as LANDLORD should elect to do and may show the Leased Premises to
others, and at any time within SIX (6) months before the expiration of the term,
may affix to any suitable part of the Leased Premises a notice for letting or
selling the Leased Premises or property of which the Leased Premises are a part
and keep the same so affixed without hindrance or molestation. LANDLORD agrees
to make such entries in a manner which will minimize any disruption to TENANT
within the Leased Premises.
ARTICLE XVI - INDEMNIFICATION
TENANT hereby covenants to indemnify and save harmless, LANDLORD and
LANDLORD's partners, agents, servants, employees, officers, attorneys,
shareholders and directors (collectively, "Landlord Group") from and against any
actions, judgments, damages, costs, claims, liabilities or penalties asserted by
or on behalf of any person, firm, corporation or public authority, including
attorneys fees and expenses:
(a) On account of or based upon any injury to person, or loss
of or damage to property sustained or occurring in, on, upon the Leased
Premises.
(b) To the extent based upon any injury to person or loss of
9
or damage to property sustained or occurring in or about the Office Building or
Office Building Parcel, arising out of the negligence of TENANT its employees,
agents, contractors, subtenants, assignees, licensees, or invitees, but solely
insofar as such negligence of TENANT occurs in its capacity as a tenant and the
relationship of such employees, agents, contractors, assignees, licensees, or
invitees with TENANT arises as a result of TENANT's occupancy of the Premises as
a tenant and is not related to services performed by TENANT in its capacity as
manager of the Shopping Center pursuant to a Management Agreement of even date
herewith, in addition to and not in limitation of subparagraph (a) above.
Neither LANDLORD nor Landlord Group shall be liable for any defect in the
Leased Premises, Common Area, the Office Building or Office Building Parcel or
in any of the improvements, equipment, machinery, or apparatus thereon, nor
shall LANDLORD nor Landlord Group be liable to TENANT for any loss of life,
bodily or personal injury, or property damage of TENANT caused by or resulting
from: (i) steam, snow or ice, (ii) leakage, backing up, seepage, or overflow of
water or sewer, (iii) fire, casualty, act of God or the elements, or (iv) the
design, construction, operation or use of any improvement, machinery, apparatus
or equipment in or on the Leased Premises, Common Area or Office Building Parcel
except to the extent that the same shall have resulted from the negligence of
LANDLORD or Landlord Group or from a failure by LANDLORD to perform its
obligations under this Lease.
In the event the Landlord Group or any member thereof shall be made a
party to any litigation arising out TENANT's occupancy of the Leased Premises as
tenant (and unrelated to TENANT's responsibilities as manager of the Shopping
Center) and LANDLORD's liability for claims made against it would be limited to
claims and amounts for which TENANT would be responsible hereunder, TENANT shall
indemnify, protect and save harmless the Landlord Group therefrom and shall pay
upon demand all damages, costs, expenses and attorneys' fees arising out of or
related thereto.
TENANT shall store, sell and use TENANT'S property, fixtures,
inventory, and equipment in, the Leased Premises and all other portions of the
Common Area and Office Building, at TENANT'S own risk, and TENANT shall and does
hereby release the Landlord Group from and against any and all claims of any
nature arising out of or related thereto.
Anything in this lease to the contrary notwithstanding, neither
LANDLORD nor Landlord Group shall have personal liability hereunder and TENANT
shall look solely to the estate and property of LANDLORD in the land and the
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Office Building for the collection of any judgment or other judicial process
arising out of any default or breach by LANDLORD with respect to any of the
terms of covenants of this lease to be observed or performed by LANDLORD, and no
other assets of LANDLORD or Landlord Group shall be subject to levy, execution
or other procedures for the satisfaction of TENANT'S remedies.
This Article XVI shall survive the termination of this Lease.
ARTICLE XVII - WAIVER OF SUBROGATION
TENANT covenants that with respect to any insurance coverage carried by
TENANT in connection with the Leased Premises or the Office Building or Office
Building Parcel (whether or not such insurance is required by the terms of this
Lease) such insurance shall provide for the waiver by the insurance carrier of
any subrogation rights against LANDLORD, its agents, servants and employees.
ARTICLE XVIII - FIRE, CASUALTY/EMINENT DOMAIN
18.1 (A) If the Leased Premises or any part thereof shall be damaged by
fire or other casualty, TENANT shall give immediate notice thereof to LANDLORD.
If a substantial portion of the Office Building or the Leased Premises shall be
damaged by fire or other casualty, the LANDLORD may elect to terminate this
Lease by giving the TENANT notice of such election within sixty (60) days of
such fire or other casualty.
(b) If the Leased Premises or any part thereof shall be damaged by fire
or other casualty, and the LANDLORD does not elect to terminate the Lease
pursuant to this Section 18.1, LANDLORD shall proceed with reasonable diligence
at its expense to repair or cause to be repaired such damage provided that
LANDLORD shall not be obligated to expend funds therefore in excess of the
amount recoverable from LANDLORD'S insurer on account of such damage. All
repairs to and replacements of TENANT'S property and alterations installed at
TENANT'S expense shall be made by and at the expense of TENANT. If the Leased
Premises or any part thereof shall have been rendered unfit for TENANT'S use and
occupation by reason of such damage, the minimum annual rent or a just and
proportionate part thereof, according to the nature and extent of the impairment
of the Leased Premises and the TENANT'S use thereof shall be abated until the
Leased Premises (except as to TENANT'S property and alterations installed at
TENANT'S expense) shall have been restored as nearly as practicable to the
condition in which they were immediately prior to such casualty and are rendered
suitable for TENANT'S occupancy. LANDLORD shall not be liable for delays in the
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making of any such repairs due to acts of God, as defined herein, nor shall
LANDLORD be liable for any inconvenience or annoyance to TENANT or injury to
TENANT'S business resulting from reasonable delays in repairing such damage.
(c) In case the Office Building or any part thereof materially
affecting TENANT'S use of the Leased Premises is so damaged by such fire or
other casualty that reconstruction of the Office Building and the Leased
Premises to substantially their former condition (except as to TENANT'S property
and alterations installed at TENANT'S property and alterations installed at
TENANT'S expense) may reasonably be expected to take more than one hundred
eighty (180) days from the date of damage to complete, or if LANDLORD fails
within sixty (60) days of written notice from TENANT to confirm in writing that
LANDLORD will so restore the Leased Premises and has or will have funds
(insurance proceeds or otherwise) sufficient therefor, then, whether or not the
Leased Premises shall have been damaged by such fire or other casualty, this
Lease and the term hereof may be terminated at the election of the TENANT by a
notice in writing of its election to terminate on a date stated in the notice,
which notice shall be given no later than seventy (70) days after such damage
and which date of termination shall be not less than thirty (30) days after the
day on which such termination notice is given. In the event any such notice is
duly given, this Lease and the term hereof shall expire, and rent shall be
apportioned, as of such termination date.
18.2 (a) In the event that a substantial portion of the Office Building
shall be taken or appropriated by eminent domain or shall be condemned for any
public or quasi-public use, then this Lease and the term hereof may be
terminated at the election of LANDLORD by a notice in writing of its election so
to terminate, which notice shall be given no later than sixty (60) days
following the date on which LANDLORD shall have received notice of such taking,
appropriation, or condemnation. If the entire Leased Premises or such portion
thereof or a substantial portion of the Office Building Parcel or the access
thereto shall be so taken, appropriated, or condemned, such that TENANT shall be
precluded from utilizing the Leased Premises substantially as contemplated, then
this Lease and the term hereof may be terminated at the election of TENANT by a
notice in writing of its election so to terminate, which notice shall be given
no later than sixty (60) days following the date on which TENANT shall have
received notice of such taking, appropriation or condemnation. Upon the giving
of any such notice of termination (either by LANDLORD or TENANT) this Lease and
the term hereof shall terminate on or retroactively as of the date on which
LANDLORD or TENANT, as the case may be, shall be required to vacate any portion
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of the area so taken, appropriated or condemned or shall be deprived of the
means of access thereto, provided, however, that LANDLORD may in LANDLORD'S
notice of termination elect to terminate this Lease and the term hereof
retroactively as of the date on which such taking, appropriation or condemnation
became legally effective. In the event of such termination, this Lease and the
term hereof shall expire as of such effective termination date and rent shall be
apportioned as of such date.
(b) If neither party (having the right to do so) elects to terminate this
Lease and the term hereof, LANDLORD shall, with reasonable diligence and at
LANDLORD'S expense, restore the remainder of the Leased Premises (but not
TENANT'S personal property or alterations installed at TENANT'S expense), and
the means of access thereto, as nearly as practicable to the condition which
obtained prior to such taking, appropriation or condemnation, in which event the
minimum annual rent shall be adjusted such that a just proportion of the minimum
annual rent shall be abated according to the nature and extent of the taking,
appropriation or condemnation. LANDLORD shall not be liable for any delays in
such restoration which are due to acts of God, as defined herein, nor shall
LANDLORD be liable for any inconvenience or annoyance to TENANT or injury to
TENANT'S business resulting from reasonable delays in such restoration (although
the same shall be taken into account in connection with any abatement of rent).
LANDLORD expressly reserves and TENANT hereby assigns to LANDLORD all rights to
compensation and damages created, accrued or accruing by reason of any such
taking, appropriation or condemnation, excluding only rights to compensation or
damages relating to TENANT'S fixtures, property, or equipment or relocation
expenses made directly to TENANT by a governmental agency or entity.
(c) If the Leased Premises or any part thereof or the access
thereto shall be taken, appropriated or condemned for any temporary use (i) this
Lease shall be and remain unaffected thereby and TENANT shall continue to pay
the full amount of the rent, (ii) TENANT shall be entitled to receive for itself
any award made for such use allocable to the term of this Lease, and (iii)
TENANT shall be responsible for any repairs necessary to restore the Leased
Premises to their condition prior to such taking, appropriation or condemnation,
provided that if any such taking, appropriation or condemnation extends beyond
the term of this Lease then the costs of such repairs shall be allocated between
LANDLORD and TENANT in proportion to the amount of any award each receives. Any
taking, appropriation or condemnation continuing in excess of one (1) year shall
be deemed to be a permanent taking, appropriation or condemnation and shall be
governed by subparagraphs (a) and (b) above.
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ARTICLE XIX - DEFAULT
19.1 If TENANT shall default in the payment of rent or any other
charges due hereunder and such default shall continue for ten (10) days after
written notice to TENANT, or if TENANT shall default in the performance of any
other of its obligations and such default shall continue for ten (10) days after
written notice thereof to the TENANT (except that if the TENANT cannot
reasonably cure any such default of its other obligations within said ten (10)
day period, this period may be extended for a reasonable time not exceeding
thirty (30) days, provided that the TENANT commences to cure such default within
the ten(10) day period and proceeds diligently thereafter to effect such cure),
or TENANT fails to take possession or occupancy of, or abandons the Leased
Premises, for more than two weeks, or an assignment or sublease in breach of
Article XIII, or if the TENANT shall file a petition under any bankruptcy or
insolvency law, or if such a petition filed against TENANT is not dismissed
within sixty (60) days, or if the TENANT shall be adjudicated bankrupt or
insolvent according to law, or if the TENANT shall make any assignment for the
benefit or creditors, or if the TENANT shall file any petition seeking a
reorganization, arrangement or similar relief, or if a receiver, custodian,
trustee or similar agent of the Leased Premises or of all or a substantial part
of TENANT'S assets shall be authorized or appointed, or if TENANT'S interest in
this Lease is taken upon execution or other process of law in any action against
TENANT.
Upon the occurrence of any of such events described above the LANDLORD may
lawfully enter the Leased Premises and repossess the same as the former estate
of the LANDLORD, or terminate this Lease by written notice to TENANT and, in
either event, expel the TENANT and those claiming through or under the TENANT
any process of law, and remove their effects without prejudice to any other
remedy which the LANDLORD may have for arrears of rent and other charges due
hereunder or proceeding on account of breach of covenant, and upon entry or
notice as aforesaid, this Lease shall terminate. TENANT covenants, in case of
any default by TENANT hereunder (which covenant shall survive the termination of
this Lease), to pay LANDLORD all costs of enforcing its rights under this Lease
(including, without limitation, reasonable attorney's fees and expenses), loss
of rent, reletting expenses, and brokerage fees together with, as agreed
liquidated damages, the greater of either (i) the amount by which, at the
termination of the Lease, the aggregate of the rent and other sums payable
hereunder projected over a period from such termination until the termination
date stated herein as the same may have been extended exceeds the aggregate
projected fair market rental value of the Leased Premises for such period, or
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(ii) an amount equal to the rent (including, without limitation, tax payments
projected on the basis of experience under this Lease) and other sums which
would have been payable had the Lease not so terminated (subject to off-set for
net rents actually received from reletting after subtraction of the expenses of
reletting), payable upon the due dates as specified herein.
LANDLORD may bring legal proceedings for the recovery of such damages,
or any installments thereof, from time to time at its election, and nothing
contained herein shall be deemed to require LANDLORD to postpone suit until the
date when the term of this Lease would have expired if it had not been
terminated hereunder.
Nothing herein contained shall be construed as limiting or precluding
LANDLORD'S recovery from TENANT of any amount or damages (including, without
limitation, reasonable attorney's fees and expenses) to which, in addition to
the damages particularly provided above, LANDLORD may lawfully be entitled by
reason of any default hereunder on the part of TENANT.
19.2 LANDLORD shall not be in default of any of its obligations unless
it shall fail to perform such obligations within thirty (30) days (or such
further time as is reasonably necessary) after receipt of written notice thereof
from TENANT. Notwithstanding the foregoing, LANDLORD shall respond to any of its
obligations involving emergency situations on an as soon as possible basis.
TENANT shall give like notice to any mortgagee which has so requested in
writing, which mortgagee shall have like opportunity to cure.
19.3 (a) If TENANT shall default in the observance or performance of
any term, covenant or condition on its part to be observed or performed under
this Lease, LANDLORD, without being under any obligation to do so and without
thereby waiving such default, may remedy such default for the account and at the
expense of TENANT, immediately but with notice which is reasonable under the
circumstances in case of emergency, and in any other case after TENANT shall
fail to remedy such default within the time set forth in this Lease, and after
LANDLORD shall have given notice to TENANT of such failure. If LANDLORD makes
any expenditures or incurs any obligations for the payment of money in
connection therewith, including, but not limited to, reasonable attorney's fees
and expenses, such sums paid or obligations incurred, with interest at the rate
of eighteen percent (18%) per annum shall be paid to LANDLORD by TENANT as rent
hereunder.
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ARTICLE XX - NOTICE
Any notice from the LANDLORD to the TENANT shall be deemed duly served
if mailed to the TENANT at the address set forth on page one of this Lease prior
to the commencement of the term, or to the Leased Premises after the
commencement date, registered or certified mailed, return receipt requested,
postage prepaid, Federal Express or other recognized overnight carrier. Any
notice from the TENANT to the LANDLORD relating to the Leased Premises or to the
occupancy thereof, shall be deemed duly served, if mailed to the LANDLORD by
registered or certified mail, return receipt requested, postage prepaid, or by
Federal Express or other recognized overnight carrier, addressed to the LANDLORD
at 1000 Franklin Village Drive, Suite 301, Franklin, Massachusetts 02038 or at
such other address as the LANDLORD may from time to time advise in writing.
ARTICLE XXI - SURRENDER
Subject to the provisions of Article 12.2 hereof, the TENANT shall at
the expiration or other termination of this Lease remove all TENANT'S goods and
effects from the Leased Premises, (including, without hereby limiting the
generality of the foregoing, all signs and lettering affixed or painted by the
TENANT, either inside or outside the Leased Premises). TENANT shall deliver to
the LANDLORD the Leased Premises and (subject to the provisions of Article XII
hereof) all keys and locks thereto, and other fixtures connected therewith and
all alterations and additions made to or upon the Leased Premises, in good
condition, ordinary wear and tear, only excepted. In the event of the TENANT'S
failure to remove any of TENANT'S property from the Leased Premises, LANDLORD is
hereby authorized upon five (5) days notice to TENANT without liability to
TENANT for loss or damage thereto, and at the sole risk of TENANT, to remove and
store any of said property at TENANT'S expense, or to retain same under
LANDLORD'S control or to sell at public or private sale, without notice of any
or all of the property not so removed and to apply the net proceeds of such sale
to the payment of any sum due hereunder, or to destroy such property.
ARTICLE XXII - COVENANT OF QUIET ENJOYMENT
LANDLORD hereby warrants that it and no other person or corporation has
the right to Lease the Leased Premises hereby demised. So long as TENANT shall
perform each and every covenant to be performed by TENANT hereunder (subject to
applicable grace periods), TENANT shall have peaceful and quiet possession of
the Leased Premises without hindrance on the part of the LANDLORD or persons
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claiming by or through the LANDLORD or anyone under LANDLORD'S control.
ARTICLE XXIII - INSPECTION
TENANT will permit LANDLORD, its agents, employees and contractors to
enter all parts of the Leased Premises upon prior reasonable notice to inspect
the same and to enforce or carry out any provision of this Lease.
ARTICLE XXIV - NON-WAIVER
No reference to any specific right or remedy shall preclude LANDLORD
from exercising any other right or from having any other remedy or from
maintaining any action to which it may otherwise be entitled either at law or in
equity.
LANDLORD'S failure to insist upon a strict performance of any covenant
of this Lease or to exercise any option or right herein contained shall not be a
waiver or relinquishment for the future of such covenant, right or option, but
the same shall remain in full force and effect.
ARTICLE XXV - CAPTIONS AND HEADINGS
The captions and headings used herein are intended only for the
convenience of the reference and are not to be used in construing this
instrument.
ARTICLE XXVI - APPLICABLE LAW
This Lease shall be construed under the laws of the Commonwealth of
Massachusetts. If any provision of this Lease, or portion thereof, or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby and each provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
ARTICLE XXVII - NO PARTNERSHIP
Any intention to create a joint venture or partnership relation between
the parties hereto is hereby expressly disclaimed.
ARTICLE XXVIII - LIABILITY
If two or more individuals, corporations, partnerships or other
business associations (or any combination of two or more thereof) shall sign
this Lease as TENANT, the liability of each individual, corporation, partnership
or other business association to pay rent and perform all other obligations
17
hereunder shall be deemed to be joint and several. In a like manner, if the
TENANT named in this Lease shall be a partnership or other business association,
the members of which are, by virtue of statute or general law, subject to
personal liability, the liability of each such member shall be deemed to be
joint and several.
TENANT shall neither assert nor seek to enforce any claim for breach of
this Lease against any of LANDLORD'S assets other than LANDLORD'S interest in
the Office Building and in the rents, issues and profits thereof (but not
including funds distributed by LANDLORD to the shareholders, partners or
beneficiaries), and TENANT agrees to look solely to such interest for the
satisfaction of any liability of LANDLORD under this Lease. In no event shall
LANDLORD (which term shall include without limitation all of the officers,
trustees, directors, partners, beneficiaries, joint ventures, members,
stockholders or other principals or representatives, disclosed or undisclosed,
thereof) ever be personally liable for any such liability or ever be personally
liable for damages, whether direct, consequential, punitive or otherwise. Each
LANDLORD shall be liable only for events occurring during that person's
ownership of LANDLORD'S estate.
ARTICLE XXIX - RULES AND REGULATIONS
The rules and regulations attached to this Lease as Exhibit B and made
a part hereof are hereby made a part of this Lease, and TENANT agrees to comply
with and observe the same. TENANT'S failure to keep and observe said rules and
regulations shall constitute a breach of the terms of this Lease in the manner
as if the same were contained herein as covenants. LANDLORD reserves the right
from time to time to amend or supplement said rules and regulations and to adopt
and promulgate additional reasonable rules and regulations applicable to the
Leased Premises, the Office Building, the Office Building Parcel and the
Shopping Center. Notice of such additional rules and regulations, and amendments
and supplements, if any, shall be given to TENANT and TENANT agrees thereupon to
comply with and observe all such rules and regulations, and amendments thereto
and supplements thereof. LANDLORD agrees that such rules and regulations shall
be enforced by LANDLORD on a uniform and nondiscriminatory basis.
ARTICLE XXX - EXAMINATION
The submission of this Lease for examination does not constitute a
reservation of or option for the Leased Premises, and this Lease becomes
effective only upon execution and delivery thereof by LANDLORD and TENANT.
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ARTICLE XXXI - ESTOPPEL
TENANT agrees that at any time and from time to time at reasonable
intervals, within ten (10) days after written request by LANDLORD, TENANT will
execute, acknowledge and deliver to LANDLORD, LANDLORD'S mortgagee, or an
assignee designated by LANDLORD, a writing ratifying this Lease and certifying:
(a) that TENANT has entered into occupancy of the Leased Premises and the date
of such entry if such is the case; (b) that this Lease is in full force and
effect, and has not been assigned, modified, supplemented or amended in any way
(or if there has been any assignments, modification, supplement or amendment,
identifying the same); (c) that this Lease represents the entire agreement
between LANDLORD and TENANT as to the subject matter hereof (or if there has
been any assignment, modification, supplement or amendment, identifying the
same); (d) the date of commencement and expiration of the term; (e) that all
conditions under this Lease to be performed by LANDLORD have been satisfied and
all required contributions by LANDLORD to TENANT on account of TENANT'S
improvements have been received (and, if not, what conditions remain unperformed
or contribution unpaid); (f) that to the knowledge of the signer of such
writing, except as otherwise stated, no default exists in the performance or
observance of any covenant or condition in this Lease and there are no defense
or offsets of which the signer may have knowledge; (g) the amount of minimum
rent then payable hereunder;(h) that minimum rent and all other rentals have
been paid under this Lease, if such be the case; and (i) such other information
as LANDLORD may reasonably request. TENANT hereby irrevocably appoints LANDLORD
its attorney-in-fact to execute such a writing in the event TENANT shall fail to
do so within ten (10) days of receipt of LANDLORD'S request.
ARTICLE XXXII - HOLDOVER
If TENANT remains in the Leased Premises beyond the expiration or
earlier termination of the term of this Lease without the consent of LANDLORD,
such holding over shall not be deemed to create any tenancy, but TENANT shall be
a tenant-at-sufferance only and shall pay rent to LANDLORD at the times and in
the manner determined by LANDLORD at a daily rate equal to one and one half
(1.5) the amount of all rent and other sums payable under this Lease as of the
day preceding the expiration or termination of this Lease as aforesaid. If
LANDLORD gives TENANT written permission to holdover after the term hereof,
rental shall be payable at the then applicable rental rate under this Lease for
the period of such holdover.
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ARTICLE XXXIII - NOTICE OF LEASE
TENANT agrees that it will not record this Lease. LANDLORD and TENANT
shall, upon request of either, execute and deliver a notice of this Lease in
such recordable form as may be required by applicable statute.
ARTICLE XXXIV - ALL AMOUNTS ARE RENT
All amounts payable to TENANT to LANDLORD under any provision of this
Lease shall be deemed to be rent or additional rent for the use of the Leased
Premises, and LANDLORD'S remedies for the nonpayment of such amounts shall be
the same as for nonpayment of minimum annual rent.
ARTICLE XXXV - ACTS OF GOD
In any case where either party is required to do any act other than the
payment of rent, delays caused by or resulting from acts of God, war, civil
commotion, fire, flood or other casualty, labor difficulties, shortages of
labor, materials or equipment, unusual government regulations, unusually severe
weather or other causes beyond such party's reasonable control shall not be
counted in determining the time during which such act shall be completed,
whether such time be designated as a fixed date, a fixed time or "a reasonable
time", and such time shall be deemed to be extended by the period of such delay.
ARTICLE XXXVI - NO ACCORD AND SATISFACTION
No acceptance by LANDLORD of a lesser sum than the minimum annual rent,
additional rent, or any other charge then due shall be deemed to be other than
on account of the earliest installment of such amount due, and notwithstanding
any endorsement or statement on any check or any letter accompanying any check
for payment, LANDLORD may accept such check or payment without prejudice to
LANDLORD'S right to recover the balance of such amount or pursue any other
remedy provided in this Lease or by law.
ARTICLE XXXVII - PARTIAL INVALIDITY
The invalidity of one more of the provisions of this Lease shall not
affect the remaining portions of this Lease; and, if any one or more of the
provisions of this Lease should be declared invalid by final order, decree or
judgment of a court of competent jurisdiction, this Lease shall be construed as
if such invalid provisions had not been included in this Lease.
ARTICLE XXXVIII - UNIFORM SIGN PROGRAM
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TENANT agrees to pay for its share of the installation of the directory
of the TENANT'S of the Office Building and shall pay for installation of any and
all signs permitted by LANDLORD, which shall be consistent with the sign
criteria attached hereto as Exhibit C and made a part hereof.
ARTICLE XXXIX - BROKERS
LANDLORD and TENANT each represent to the other that they have not
entered into any agreement or incurred any obligation in connection with this
transaction which might result in the obligation to pay a brokerage commission
to any broker other than Cedar Shopping Centers Partnership, L.P.
("Broker").TENANT agrees to indemnify and hold harmless LANDLORD from and
against any and all costs, expense or liability (including, attorneys' fees)
for any compensation, commission and charges caused by any broker or agent
(other than the Broker) by reason of any broker or agent having had
conversations or dealings with TENANT with respect to this Lease or the
negotiations thereof.
ARTICLE XL - HAZARDOUS WASTES
TENANT shall neither suffer nor itself manufacture, store, handle,
transport, dispose of, spill, leak, dump any toxic or hazardous waste, waste
product or substance (as they may be defined in any Federal or State statute,
rule or regulation pertaining to or governing such wastes, waste products or
substances) at the Building, Common Area or Office Building Parcel at any time
during the Term.
If Hazardous Substances are used, stored, generated or disposed of on
or in the Leased Premises or Building whether or not permitted by LANDLORD or if
the Leased Premises become contaminated in any manner TENANT shall indemnify and
hold harmless the LANDLORD from any and all claims, damages, fines, judgments,
penalties, costs, liabilities or losses, including reasonable attorney's fees
and costs, arising out of or in any way connected with the use, manufacture,
storage or disposal of Hazardous Substances by TENANT or TENANT'S agents,
employees or contractors. The indemnity obligations of TENANT under this
provision shall survive any termination of the Lease.
ARTICLE XLI - OFFICE BUILDING ALTERATIONS
LANDLORD shall have the right at any time without the same constituting
an eviction and without incurring liability to TENANT therefor to change the
arrangement and/or location of public entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the Office
21
Building and to change the name, number or designation of which the Office
Building may be known. There shall be no allowance for TENANT for diminution of
rental value and no liability on the part of LANDLORD by reason of
inconvenience, annoyance or injury to business arising from LANDLORD or other
tenants' making any repairs in the Office Building or any such alterations,
additions and improvements.
ARTICLE XLII - PARKING
LANDLORD shall have the right to designate specific spaces to be used
by TENANT and also the right from time to time to reassign such parking spaces
when, in the opinion of the LANDLORD, a rearrangement of the parking allocations
becomes necessary. TENANT shall comply with all rules and regulations which
LANDLORD may reasonably prescribe from time to time for the proper functioning,
operation and control of the parking facilities. The regulations shall also
control the use, hours of permitted occupancy, operation and placement of motor
vehicles in the parking facilities, and shall also contain any other rules and
regulations reasonably deemed necessary and proper by the LANDLORD for the
orderly conduct and maintenance of said parking facilities. Any violation by the
TENANT of said rules and regulations shall be conclusively presumed to be a
violation of the terms of this Lease. Four parking spaces currently designated
for use by Calarese Development Corporation in the location as shown in Exhibit
A shall be designated for the exclusive use of TENANT and its invitees.
ARTICLE XLIII - TERMINATION
TENANT and LANDLORD are simultaneously herewith entering into a
Management Agreement (the "Management Agreement") whereby TENANT will perform
certain services with respect to the Office Building and Office Building Parcel.
In the event that the Management Agreement is terminated then LANDLORD or TENANT
may terminate this Lease upon thirty (30) days written notice to the other and
this Lease shall terminate upon the expiration of such 30-day period as if such
date were the original Expiration Date set forth in this Lease.
ARTICLE XLIV - SIGNS
TENANT shall not install any signs upon the Leased Premises, Office
Building or Office Building Parcel without Landlord's prior written consent. If
LANDLORD shall consent to any sign, upon termination of the Lease, TENANT shall
remove said sign and restore the Leased Premises and/or the Office Building to
the condition existing prior to the installment of such sign. TENANT may keep
and maintain current sign locations occupied by Calarese Development Corporation
22
as shown on Exhibit A.
ARTICLE XLV - SUCCESSORS AND ASSIGNS
This Lease and the terms hereof shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns.
ARTICLE XLVI - FINANCING REQUIREMENTS
If in connection with obtaining financing for the Office Building, a
bank, insurance company, pension trust or other institutional lender shall
request reasonable modifications in this Lease as a condition to such financing,
TENANT will not unreasonably withhold, delay, or condition its consent thereto,
provided that such modifications do not increase the obligations of TENANT
hereunder or materially adversely affect the leasehold interest hereby created.
ARTICLE XLVII-TIME OF ESSENCE
Time is of the essence with respect to Tenant's obligations and
covenants under this Lease.
ARTICLE XLVIII - ENTIRE AGREEMENT
This Lease and the Exhibits hereto constitute the full and complete
agreement between the parties hereto with respect to the Leased Premises and
there are no other terms, obligations, covenants, representations, warranties or
conditions other than contained herein.
IN WITNESS WHEREOF, LANDLORD and TENANT have caused this Lease to be signed,
sealed and delivered as of the day first above written.
LANDLORD:
CEDAR-FRANKLIN VILLAGE, LLC
BY:_________________________
Name:
Title:
TENANT:
CALARESE Properties, Inc.
BY:_________________________
Name:
Title:
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COUNTY OF __________ ___, 2004
On this _____ day of ________, 2004, before me, personally appeared the
above-named ROGER V. CALARESE, who, being by me duly sworn, acknowledged the
foregoing instrument to be the free act and deed of Calarese Properties, Inc.
---------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES:
COUNTY OF ___________ _________ ___, 2004
On this _____ day of ________, 2004, before me, personally appeared the
above-named ______________, known to me to be the _______________ of
_________________and who, being by me duly sworn, acknowledged the foregoing
instrument to be ___ free act and deed as said _______________ of Cedar-Franklin
Village, LLC.
----------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES:
24
EXHIBIT A
25
EXHIBIT B
FRANKLIN VILLAGE OFFICE BUILDING RULES AND REGULATIONS
1. The sidewalk, entrances, passages, corridors, vestibules, halls, elevators or
stairways in and about the Office Building shall not be obstructed by Lessee.
2. Lessee shall not place objects against glass partitions, doors or windows
which would be unsightly from the Office Building corridor or from the exterior
of the Office Building.
3. Lessee shall not waste electricity or water in the Office Building or
Premises and shall cooperate fully with Lessor to assure the most effective
operation of the Building heating and air-conditioning systems.
4. No additional or different locks or bolts shall be affixed on doors by
Lessee. Lessee shall return all keys to Lessor upon termination of Lessee's
lease.
5. Lessee shall not allow peddlers, solicitors, or beggars in the Office
Building and shall report such persons to the Building Office.
6. No bicycles, vehicles, or animals of any kind shall be brought into or kept
in or about the Premises.
7. No space in the Office Building shall be used for manufacturing, or for the
sale of merchandise of any kind at auction or for storage thereof preliminary to
such sale.
8. Lessee shall not engage or pay any employees of the Office Building without
approval from the Lessor.
9. Lessee shall not bring into the Office Building and shall not permit or place
within the Premises matter of any description which would result in a floor load
in excess of the load which such floor was designed to carry, without prior
written approval of Lessor in each instance.
10. All removals from the Office Building, or the carrying in or out of the
Office Building or Premises of any freight, furniture or bulky matter of any
description, must take place at such time and in such manner as Lessor may
determine from time to time.
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11. Lessor may prohibit any advertising by Lessee which refers to the Office
Building and which in Lessor's opinion tends to impair the reputation of the
Office Building.
12. Lessor reserves the right to exclude from the Office Building, between the
hours of 6:00 a.m. and 8:00 a.m. on business days and at all hours on Saturday,
Sunday and holidays, all persons who do not present a pass or other appropriate
identification approved by the Lessor. Lessor will furnish passes to persons
designated by Lessee. Lessee shall be responsible to Lessor for all acts of such
persons.
13. Holidays, for purposes of Office Building operations, shall be those days
upon which in the Town of Franklin, Massachusetts, the following holidays are
observed from time to time:
New Years' Day Labor Day
Washington's Birthday Columbus Day
Patriot's Day Veteran's Day
Memorial Day Thanksgiving Day
Independence Day Christmas Day
Easter Day
and any additional holidays there observed which may at ant time be provided by
Town, County, State or Federal Governments.
14. Lessee shall cooperate with Lessor in minimizing loss and risk thereof from
fire and associated perils.
15. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were designated and constructed,
and no sweepings, rubbish, rags, acids or like substances shall be deposited
therein.
16. Lessor shall not be responsible to any tenant for the non-observance or
violation by any other tenant, however resulting, of any of the rules and
regulations at any time prescribed for the Office Building.
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EXHIBIT C
FRANKLIN VILLAGE
OFFICE BUILDING SIGN CRITERIA
1. Lessee and sublessees shall be allowed to place one sign on the entrance to
the Premises limited to the name of Lessee.
2. Lessee's and sublessees' name and the location of the Premises shall be shown
on the interior and exterior Office Building Directory.
3. All signs allowed hereunder shall be subject to any and all required
approvals from any local, state or federal government or governmental agencies.
4. The use of corporate shields, crests, logos or insignia will be permitted
(subject to Lessor's approval) provided such corporate shields, crests, logos or
insignia shall not exceed the height of upper case sign letters.
5. All signs shall be subject to Lessor's approval. Within ninety (90) days from
either of the following dates, whichever occurs later: (a) receipt of Space
Layout Drawings from Lessor, or (b) Execution of the Lease, Lessee shall submit
three (3) sets of blueline prints of the drawings and specifications for all its
proposed sign work. The drawings shall clearly show location of sign, graphics,
color and construction and attachment details, along with material samples.
As soon as possible after receipt of sign drawings, the Lessor shall
return to the Lessee one (1) set of such sign drawings with its suggested
modifications and/or approval. If upon receipt of approved sign drawings bearing
Lessor's comments, Lessee wishes to take exception thereto, Lessee may do so in
writing by Certified or Registered Mail of receipt of such sign drawings. Unless
such action is taken, it will be deemed that such comments made by the Lessor on
the sign drawings are acceptable to and approved by the Lessee.
6. Lessee shall be responsible for payment for the design, installation and
operation of the signs permitted pursuant hereto.
7. Prohibited Types of Signs or Sign Components:
a. Moving or rotating signs;
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b. Back-illuminated signs;
c. Signs employing moving or flashing lights;
d. Signs employing exposed raceways, ballast boxes or transformers;
e. Signs employing illuminated letters.
f. Signs of box or cabinet type construction employing transparent,
translucent or luminous plastic background panels.
g. Signs employing luminous-vacuum formed type plastic letters;
h. Signs employing noise making devices and components;
i. Signs, letters, symbols or identification of any nature painted
directly on the exterior surfaces of the premises;
j. Free-standing signs;
k. Signs employing unedged or uncapped plastic letters, or letters with
no returns and exposed fastenings;
l. Rooftop or exterior signs; and
m. The name "Franklin Village" is not permitted in any Lessee's sign.
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EXHIBIT 10.09
PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT ("Agreement") made as of November 1,
2004, by and between CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited liability
company ("Owner") and Calarese Properties, Inc., a Massachusetts Corporation
("Agent").
BACKGROUND
A. Owner is the owner of the land and improvements known as Franklin
Village Shopping Center, Franklin, MA 02038 (the "Property").
B. Owner desires to retain Agent as its exclusive agent for the
purposes of leasing and managing the Property on behalf of Owner and Agent is
willing to act as agent for Owner with respect to the Property on the terms and
conditions of this Agreement as more fully set forth herein.
NOW, THEREFORE, in consideration of the agreements and covenants herein
contained, and intending to be legally bound hereby, Owner and Agent agree as
follows:
1. Owner hereby employs Agent to manage and lease, as the exclusive
broker, the Property upon the terms and conditions hereinafter set forth an
initial term of three (3) years from the date hereof unless otherwise extended,
renewed or terminated as hereinafter set forth.
2. Agent agrees (in accordance with Owner's standard written operating
procedures provided, simultaneously herewith, by Owner to Agent), to perform the
following:
2.1. Use its best efforts to lease or cause brokers or other
agents to lease on behalf of Owner all available space in the Property;
2.2. Diligently to collect rents, additional rents and all other
sums due from tenants when due and, where necessary or appropriate, except as
directed otherwise by Owner (in which event Owner shall bear the administrative
costs of relieving Agent of such duty or duties), take all such actions as Agent
shall deem necessary or advisable to enforce all rights and remedies of Owner
under the leases relating to the Property (the "Leases") or to protect the
interest of Owner, including, without limitation, the preparation and delivery
to tenants under the Leases ("Tenants") of all "late payment", default, and
other appropriate notices, requests, bills, demands, and statements. Agent, with
Owner's prior written approval, may retain counsel, collection agencies, and
such other persons and firms as Agent shall deem appropriate or advisable to
enforce, after notification to Owner, by legal action the rights and remedies of
Owner against any Tenant default in the performance of its obligations under a
Lease. Agent shall promptly notify Owner of the progress of any such legal
action;
2.3 [Intentionally Omitted]
2.4. Agent shall periodically report to Owner on the general
operations, occupancy, physical condition, disbursements, delinquencies,
uncollectible accounts, and other matters relating to the Property. Agent shall
prepare and submit to Owner for its approval no later than November 1 of each
calendar year (or such later date as the parties agree, but in any case by
December 1, 2004 for calendar year 2005) a proposed pro forma budget for all
costs pertaining to the operation and maintenance of the Property during the
ensuing calendar year. Each such budget shall be substantially in the same form
as the approved budget in effect for the prior calendar year, shall set forth
expenditures on an annual and a monthly basis, and shall not, except for
informational purposes, include estimates for costs and expenses for which Owner
will be reimbursed by Tenants under the Leases. Agent shall make such reasonable
modifications to each proposed pro forma budget it prepares in accordance with
this Section until Owner shall have approved this budget in writing, which
approval shall be at its sole discretion. Such budget and revisions shall be
deemed to be accepted and approved by Owner unless specifically rejected or
accepted within fifteen (15) days of submission: All of the matters set forth in
this Section 2.4 shall be performed only upon the instruction of and in the
manner required by Owner.
2.5. To account for all advance deposits of Tenants;
2.6. To request refunds to Tenants from escrow accounts, the funds
of the Property or funds provided by Owner, as appropriate, pro-rated rents,
rebates, allowances, advance deposit refunds, and such other amounts as are
legally due Tenants;
2.7. To collect from Tenants all insurance polices, Tenant
insurance certificates, or other evidence of insurance required to be carried by
Tenants;
2.8. [Intentionally Omitted.]
2.9. To respond to complaints and inquiries by Tenants,
prospective tenants and others, and to take such corrective actions as Agent
deems appropriate;
2.10. To contract on behalf of and at the expense of Owner for
such supplies and services in reasonable quantities and at reasonable prices as
may be appropriate with respect to the Property, and to supervise and administer
such contracts, including, without limitation, contracts for mechanical
maintenance (including preventative maintenance), window and facade maintenance
and cleaning, metal maintenance, pest control, trash removal, janitorial and
maintenance supplies, building security, public relations, collection and credit
reporting, legal and accounting services, computer services, architectural and
engineering services, laundry services, and janitorial or cleaning services. In
so contracting, Agent may contract with entities or persons affiliated with it,
provided, however, that the rates and charges of the affiliated entity or person
are generally competitive and consistent with rates and charges by
non-affiliated entities and will obtain a minimum of two (2) competitive bids
from non-affiliated contractors respecting any contract exceeding Ten Thousand
Dollars ($10,000.00);
2.11. To negotiate on behalf of Owner any applicable labor or
collective bargaining agreements related to employees of Owner at the Property
only upon the instruction of and in the manner required by Owner;
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2.12. To hire, discharge, promote or demote, and supervise the
on-site employees of Owner, if any, whose wages and fringe benefits shall be the
responsibility of Owner, which employees may include, but are not necessarily
limited to, building manager, maintenance personnel, porters, laborers, security
staff and watchmen, provided, however, that any personnel hired by Agent whose
wages are not provided for in the approved budget, or otherwise approved by
Owner shall be employees of Agent and their wages and fringe benefits shall be
paid by Agent without reimbursement by Owner. Without limiting the foregoing,
Owner agrees that the two (2) maintenance employees working at the Property
immediately prior to the Owner's acquisition of the Property shall be employed
by Agent, and Agent shall bill the work of such employees to Owner at the same
hourly rate as were historically billed to the prior owner of the Property for
work by such employees, which rates shall be reflected in the approved budget.
2.13. To supervise and coordinate the moving in and moving out of
Tenants to accomplish efficient and time saving use of personnel and elevators
and maintain appropriate public relations with Tenants and prospective tenants;
2.14. [Intentionally Omitted.]
2.15. To prepare and file or cause to be prepared and filed on
behalf of Owner such applications for permits, and/or licenses as may be
required for the operation of the Property;
2.16. To assist with preparation and, where appropriate, transmit
payroll records, accounting reports, vacancy and occupancy reports, delinquency
reports, cash flow reports, and disbursement ledgers. Agent may contract with
others, including but not limited to entities or persons affiliated with it, or
provide its own personnel for the performance of accounting, bookkeeping and
computer services in connection with such preparation assistance and
transmittal, all without any additional charge to Owner. All of the matters set
forth in this Section 2.15 shall be performed only upon the instruction of and
in the manner required by Owner;
2.17. To institute and prosecute on behalf of Owner, and with
Owner's prior written approval, such legal actions or proceedings as the Agent
deems to be appropriate; to collect sums due Owner; with Owner's approval, to
evict a Tenant, former Tenant or occupant of the Property; to regain possession
of the Property or any part thereof; to contest any bill or charge asserted
against or with respect to the Property; to defend any administrative or legal
action brought against Agent and/or Owner with respect to the Property; with
Owner's approval, to commence litigation pertaining to any labor or employment
related dispute; to administratively process or litigate any tax related issue
or other issues relating to the Property; to appeal all such proceedings and law
suits; and to settle or compromise any claims, law suits, judgments and
proceedings relating the Property, provided however that Agent shall first
notify Owner of any compromise which would result in an expenditure by or loss
to Owner in excess of Ten Thousand Dollars ($10,000.00) in the aggregate;
2.18. [Intentionally Omitted.]
2.19. To open and maintain accounts on behalf of Owner with such
suppliers and vendors as are necessary or appropriate for the efficient
operation of the Property;
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2.20. Subject to the approval by the Owner, to join and
participate on Owner's behalf in such professional, trade or industry
organizations and associations relating to office buildings/retail property as
is necessary or appropriate with respect to the operation of the Property;
2.21. To notify Owner of any violations of any laws, orders,
rules, or determinations of any governmental authority or agency affecting the
Property promptly after such occurrence is known to Agent;
2.22. To notify Owner of any catastrophe or major loss or damage
or other material adverse change with respect to the Property, and to similarly
notify all appropriate insurance authorities of the same, promptly upon Agent's
knowledge thereof;
2.23. In the event Agent is able to arrange for construction work
performed at the Property on behalf of Owner at a lower cost than Owner is able
to procure for itself (using, if required by Owner, union labor), to supervise
and arrange for construction work required by Owner and to receive a
construction supervision fee in the amount of five percent (5%) of the total
construction costs;
2.24. Upon request of Owner, to provide or arrange for such
engineering, architectural, design or consulting services with respect to
construction, rehabilitation or decorating work or proposed construction,
rehabilitation or design work at the Property, all such services to be paid for
by Owner;
2.25. To handle on behalf of Owner the submission to appropriate
insurance officials of insurance claims and the settlement thereof,
2.26. To prepare such reports, data, presentations, market surveys
or other material as Owner requests in connection with the sale, refinancing,
disposition or master leasing of the Property;
2.27. To institute at Owner's expense, advertising, marketing and
public relations campaigns pertaining to the Property as requested by Owner;
2.28. To recommend to Owner, where Agent deems it appropriate,
programs for the rehabilitation, remodeling, repairs and marketing of the
Property; and
2.29. To perform such other services on behalf of Owner with
respect to the Property customarily performed by agents within the Property's
geographical area as shall be reasonably requested from time to time by Owner.
If Owner and Agent disagree as to which services are customarily performed by
agents as aforesaid, Agent shall not be required to perform such service until
resolution of such dispute, and such non-performance shall not be the basis of
termination by Owner of this Agreement.
3. Owner expressly withholds from Agent any power or authority to make
any structural changes in any building or to make any other major alterations or
additions in or to any such building or equipment therein, or to incur any
expense chargeable to Owner other than expenses related to exercising the
express powers above vested in Agent without the prior written direction of
Owner (or any party that Owner shall direct), except such emergency repairs as
may be required because of danger to life or property or which are immediately
necessary for the preservation and safety of the Property or the safety of the
occupants thereof or are required to avoid the suspension of any necessary
service to the Property.
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4. [Intentionally Omitted.]
5. Except as otherwise provided for herein, Owner shall pay to Agent a
property management fee in an amount equal to three percent (3%) of the gross
receipts of the Property. This fee shall be payable in monthly installments 10
days after the end of the month for which the management fee is applicable.
Gross receipts of the Property shall include all rents, percentage rents, tenant
charges, reimbursements from Tenants for common area maintenance charges,
insurance, utilities and real estate taxes and such other amounts as are
collected from Tenants and shall exclude the proceeds from any sale or
refinancing of the Property or any portion thereof and the proceeds of any
settlements, insurance award (except as provided in Section 2.24) or
condemnation award. This fee does not include payment for leasing services.
5.1. Notwithstanding anything to the contrary contained herein or
elsewhere in this Agreement, the parties hereto acknowledge and agree that
pursuant to the terms of that certain Third Amendment to Agreement of Purchase
and Sale (the "Third Amendment") dated as of September 13, 2004, by and between
Roger V. Calarese and A. Richard Calarese, as trustees of Franklin Village Trust
dated January 19, 1979, as amended, as seller ("Seller"), and Owner, as
purchaser, Seller agreed, among other things, to pay to Owner an amount equal
$5,333.33 plus pro-rata charges on account of taxes, insurance and common area
maintenance at the Property with respect to certain vacant space at the Property
formerly leased to Golf USA and EnviroSpace, as such amount may be reduced by
rents actually received and by certain other payments as agreed between the
parties (the "Enviro/Golf Payment Amount") on the first day of each full
calendar month following the date hereof for twenty four (24) months (the
"Payment Period"), commencing on the first day of the first full calendar month
following the date hereof. From and after the commencement of the Payment
Period, Seller's failure timely to pay the Enviro/Golf Payment Amount to Owner
shall be an event of default hereunder pursuant to the Third Amendment, and
Owner shall be entitled to offset any unpaid portion of the Enviro/Golf Payment
Amount against any amounts payable to Agent under this Agreement, until such
time as any and all delinquent portions of the Enviro/Golf Payment Amount are
paid in full either by payment from Seller or Owner's offset rights hereunder.
5.2. Agent shall be the exclusive leasing agent for the Property.
Subject to Section 5.1 above with respect to the Enviro/Golf Payment Amount,
Owner shall pay Agent a commission at the rates annexed hereto as Schedule of
Brokerage Commissions for each lease signed during the term of this Agreement
upon occupancy by the tenant pursuant thereto. Notwithstanding the foregoing, in
the event Owner (or an affiliate of Owner), procures a tenant during the term or
if a third-party broker procures a tenant during the term or is otherwise due a
commission in connection with a new tenant, the commission owed to Agent shall
be reduced by fifty percent (50%). In the event of any renewal, extension, or an
expansion of an existing lease, Agent shall not receive a commission.
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6. Owner shall reimburse Agent for reasonable, actual out-of-pocket
expenses including telephone and facsimile charges, postage and express mail
service and travel and food expenses incurred by Agent in connection with
Agent's on-site supervision of the Property by Agent's officers and personnel
(evidenced by receipts submitted to Owner).
7. [Intentionally Omitted.]
8. The Agent shall have a lease (copy attached) to occupy, during the
term of this Agreement, the space at the Property identified as Suite 301
("Agent's Office"), for use as Agent's office. In addition to Agent's Office,
Agent shall have the exclusive right, during the term, at no cost to Agent, to
utilize the garage on the Property, located behind space currently occupied by
KB Toys, for use as storage for maintenance equipment.
9. In performing its obligations hereunder, Agent shall comply with all
applicable federal, state and local laws and regulations.
10. The initial term of this Agreement shall be for a period of three
(3) years from the date hereof and this Agreement shall automatically renew from
year to year thereafter unless and until terminated by either party upon ninety
(90) days' prior written notice thereof. Notwithstanding the foregoing, (i)
Owner shall be entitled to terminate this Agreement (with no additional
compensation) at any time upon fifteen (15) days' notice to Agent in the event
of the malfeasance or breach of this Agreement by Agent or upon the filing of a
bankruptcy petition against or by Agent, and (ii) Agent and Owner shall each be
entitled to terminate this Agreement for convenience at any time upon thirty
(30) days' notice to the other. Without limiting the foregoing, this Agreement
shall terminate automatically (with no additional compensation) if:
(i) all or substantially all of the Property is condemned or
acquired by eminent domain; or
(ii) all or substantially all of the Property is destroyed by fire
or other casualty as a result of which all or substantially all of
Tenants are unable to continue the normal conduct of their business in
their respective occupied spaces and are permanently released under
their respective leases from the payment of all rent thereunder; or
(iii) all of the Property is sold to an unrelated, third-party
purchaser.
In the event Owner terminates Agent for Owner's convenience, for
reasons other than (A) those reasons set forth in items (1), (ii), or (iii)
above, or (B) the malfeasance or breach of this Agreement by Agent or upon the
filing of a bankruptcy petition against or by Agent, Owner shall make a payment
to Agent, on or before the date this Agreement terminates, of an amount equal to
the product of (A) three percent (3%) of the average monthly gross receipts of
the Property (based upon the twelve months immediately preceding the date of
said termination), multiplied by (B) the lesser of (1) twenty-four (24) months
from the date of such termination, or (ii) the number of months remaining in the
balance of the initial three (3) year term.
11. Owner shall pay or reimburse Agent for any monies due it under this
Agreement for services prior to termination, notwithstanding termination of this
Agreement. All provisions of this Agreement that require Owner to have insured
or to defend, reimburse or indemnify Agent shall survive any termination, and,
if Agent is or becomes involved in any proceeding or litigation by reason of
having been Owner's Agent, such provisions shall apply as if this Agreement were
still in effect.
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12. Owner agrees to release, indemnify, defend, and save the Agent, its
officers and employees harmless from and against all claims, disputes, losses,
liabilities and suits (including but not limited to all attorneys' fees and
litigation expenses and Agent's costs in connection therewith) in any way:
(i) relating to or arising in connection with the Property and/or
damage to property and injuries to or death of any employee, invitee or other
person whomsoever, and/or Agent's performance of its duties hereunder;
(ii) relating to any proceeding or suit involving an alleged
violation by Owner of any law applicable to the Property or operations thereof;
and
(iii) relating to obligations assumed by Agent, its officers or
employees in connection with any financing or refinancing entered into in
connection with the Property.
12.1. The obligations of Owner to indemnify, hold harmless, and
reimburse Agent are subject to the following conditions:
(i) Agent shall promptly notify Owner of any matter with respect
to which Owner is required to indemnify, hold harmless, or reimburse
Agent; and
(ii) Agent shall not take or fail to take any actions, including
an admission of liability, which would bar Owner from enforcing any
applicable coverage under policies of insurance held by Owner or would
prejudice any defense of Owner in any appropriate legal proceedings
pertaining to any such matter or otherwise prevent Owner from defending
itself with respect to any such matter, provided such action or failure
to act resulted from the gross negligence or willful malfeasance of
Agent.
Notwithstanding the foregoing, Owner shall not be required to
indemnify, hold harmless, or reimburse Agent with respect to any matter to the
extent the same resulted from the gross negligence or willful malfeasance of
Agent or actions taken by Agent outside of the scope of Agent's authority under
this Agreement or any express or implied direction of Owner.
The provisions of this Section shall survive the expiration and any
termination of this Agreement.
Owner agrees to cause Agent to be named as an additional named insured
on all liability and umbrella coverages maintained by owner with respect to the
Property.
13. Owner and Agent shall each waive any claim for loss or damage
against the other and mutually agree to hold each other harmless for loss to the
Property to the extent that either party is reimbursed or indemnified by
insurance coverage.
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14. Agent will promptly notify Owner of any violations of any
requirements of any statute, ordinance, law or regulation of any Governmental
body or any public authority or official thereof having jurisdiction and shall
promptly take all actions necessary to cure such violations and to prevent any
civil or criminal liability from being imposed.
15. In the event it is alleged or charged that the Property or any
equipment therein or any act or failure to act by the Owner or its agents with
respect to the Property or the sale, rental, or other disposition thereof fails
to comply with, or is in violation of, any of the requirements of any
provisions, statute, ordinance, law, or regulation of any Governmental body or
any order or ruling of any public authority or official thereof having or
claiming to have jurisdiction thereover, and Agent, in its sole and absolute
discretion, considers that the action or position of Owner may result in damage
or liability to Agent, Agent shall have the right to cancel this Agreement at
any time by giving not less than thirty (30) days' prior written notice to Owner
of its election so to do, which cancellation shall be effective upon the service
of such notice. Such notice may be served upon receipt or refusal or refusal by
Owner personally or by United States certified mail, return receipt requested,
and if served by mail shall be deemed to have been served when deposited in the
United States mail system. Such cancellation shall not release the indemnities
of Owner and Agent set forth herein and shall not terminate (i) any liability or
obligation of Owner to Agent for any payment, reimbursement, or other sum of
money then due and payable to Agent hereunder as of the date of such
cancellation, or (ii) any obligation of Agent to remit monies to Owner or to
complete its obligations hereunder to the date of such cancellation. Agent shall
cooperate with Owner to ensure a smooth and efficient transition to a new
managing agent, including but not limited to, prompt delivery of files relating
to the Property.
16. Agent agrees to release, indemnify, defend and save Owner harmless
from and against all claims, disputes, losses, liabilities and suits (including
but not limited to all attorneys' fees and litigation expenses and Owner's costs
in connection therewith) in any way resulting from the gross negligence or
willful malfeasance of Agent, or its employees (i) relating to or arising in
connection with the Property and/or damage to property and injuries to or death
of any employee, invitee or other person whomsoever, and/or Agent's performance
of its duties hereunder; or (ii) relating to any proceeding or suit involving an
alleged violation by Agent of any law applicable to the Property or operations
thereof.
17. It is expressly agreed by the parties that:
17.1. The parties have entered into this Agreement without any
inducements, representations, statements, warranties or agreements made by
either party other than those expressly stated herein.
17.2. This Agreement embodies the entire understanding of the
parties with respect to the subject matters stated herein and there are no other
understandings or undertakings related to the within subject matters, except for
such other agreements referred to herein and the Eurohypo AG Cash Management
Agreement. This Agreement may be modified only by a written agreement signed by
the parties hereto.
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17.3. The provisions of this Agreement are severable and to the
extent that any provision herein is determined by court order, law or rule to be
invalid, such invalidity shall in no way affect nor invalidate the other
provisions of this Agreement.
17.4. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17.5. With respect to any and all disputes under or relating to
this Agreement, the parties consent to the exclusive jurisdiction and venue of
the Supreme Court of the State of New York, Nassau County and the Untied States
District Court for the Eastern District of New York, and the appellate courts
with supervisory powers thereover.
17.6. The parties agree that in any litigation or proceeding
commenced by either party against the other, service of process shall be deemed
to be effective either by hand delivery thereof or by the mailing thereof via
certified mail, postage prepaid, return receipt requested, with a proof of
mailing receipt validated by the U. S. Postal Service constituting the
sufficient evidence of service of process.
17.7. With respect to any notices that are required or permitted
to be made pursuant to this Agreement, they shall be in writing and either
delivered personally or sent by United States certified mail, return receipt
requested, addressed as follows:
As to Owner:
Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue, Suite 304
Port Washington, NY 11050
Attention: Brenda J. Walker
With a copy to:
Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue, Suite 304
Port Washington, NY 11050
Attention: Stuart H. Widowski, Esq.
As to Agent:
LIST AGENT HERE Calarese Properties, Inc.
1000 Franklin Village Drive, Suite 301
Franklin, MA 02038
Attention: Roger V. Calarese, President
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17.8. This Agreement may not be assigned by Agent without the
prior written consent of Owner, provided, however, that Owner consents to
Agent's designating a subsidiary or affiliate of Agent to act on behalf of Agent
as leasing and rental agent for the Property. This Agreement shall be binding
upon and benefit the parties hereto and their respective successors and
permitted assigns.
18. [Intentionally Omitted.]
19. Agent acknowledges and agrees that an affiliate of Owner is subject
to the requirements of the Sarbanes-Oxley Act of 2002 and, accordingly, Owner's
standard operating procedures may differ from similarly situated owners of
property not subject to such Act. Agent agrees that it shall comply with any
requirements of the Act, to the extent Owner gives Agent notice thereof and
instructions with respect thereto.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have executed this Property Management Agreement as of the day and year
first set forth above.
AGENT
CALARESE PROPERTIES, INC.
By:
------------------------------------
Name: Roger V. Calarese
Title: President
OWNER
CEDAR-FRANKLIN VILLAGE LLC
By:
------------------------------------
Name: Brenda J. Walker
Title: Vice President
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EXHIBIT "A"
Year 1 5% of annual net fixed minimum rent
Years 2 & 3 4% of annual net fixed minimum rent
Year 4 3 % of annual net fixed minimum rent
Year 5 2% of annual net fixed minimum rent
Year 6 and 2% of annual net rent for each and every year
beyond .... of the primary term. (nothing for option
periods, for renewals or extensions of existing
leases, or for expansions by existing tenants)
1. The following amounts shall be excluded or deducted, as the case may be,
from the term "net aggregate fixed minimum rent":
(a) amounts which are above or in addition to the fixed rent, whether
payable by Tenant as adjustments or otherwise, for realty taxes,
cleaning costs, all other operating expense escalations or
pass-throughs, percentage rentals (if any) and periodic adjustments in
rentals whether based on Consumer Price Index or otherwise shall be
excluded;
(b) amounts paid to Landlord by Tenant, or melded into Tenant's rental under
the Lease, for work performed for Tenant in excess of Landlord's Work as
specified in the Work Letter attached to the Lease shall be excluded;
(c) amounts added to or melded into Tenant's rental under the Lease to
reimburse Landlord for Tenant's space in another Shopping Center which
Landlord agrees to "take over" and credits allowed to Tenant against
Lease rental for payments made by Tenant to its landlord(s) to satisfy,
cancel or discharge leasehold obligations of Tenant. These payments
shall be deducted as allowed or made against Tenant's rental under the
Lease;
(d) amounts agreed to be paid by Landlord to landlords of Tenant to satisfy,
cancel or discharge Tenant's obligations under its existing leases or
agreements and losses incurred in assigning such leases or subletting
such space. Such payments shall be deducted when paid and losses shall
be deducted when incurred;
(e) amounts paid for additional cleaning, security and/or other services not
commonly supplied to other tenants of the Shopping Center shall be
excluded;
(f) amounts paid by Tenant in connection with Tenant's option to cancel, if
any, shall be excluded;
(g) rent concessions, work letter allowances and rent allowances granted to
Tenant shall be deducted.
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2. The Commission constitutes the maximum amount of commission or compensation
that may become due and payable in connection with the proposed Lease with
Tenant. No commission or other compensation shall be due or payable for any
lease extension or lease renewal and no commission or other compensation
shall be due or payable in the event Tenant leases any additional space in
the Shopping Center.
3. If any Lease gives Tenant the right to cancel before its term commences and
the Tenant exercises that right, if our first mortgagee does not approve the
Lease to Tenant, and as a result the Lease term never commences, or if for
any reason the Lease does not commence pursuant to its terms (other than by
reason of our willful default under the Lease between us and the Tenant
after due execution and delivery thereof) you shall not be entitled to
receive any Commission or compensation whatsoever and you hereby waive any
claim therefor. The initial payment of the Commission (if any is theretofore
paid to you) may, however, be retained by you, but we shall have no further
liability to you under this agreement.
4. The commission described above shall be earned by you only if (A) a written
Lease is executed and unconditionally delivered by and between us and the
Tenant within one (1) year of the date hereof and (B) the term of the Lease
has commenced and (C) Tenant has assumed actual possession of the premises
let to Tenant (or any permitted subtenant or assignee has taken possession)
and (D) Landlord has received payment for the first month of Minimum Rent
and (E) Tenant has opened for business to the public in accordance with the
terms of the Lease.
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EXHIBIT 10.10
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES
THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT
FEES (this "ASSIGNMENT") is made as of November 1, 2004, by CEDAR-FRANKLIN
VILLAGE LLC, a Delaware limited liability company, having its principal place of
business at c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles
Avenue, Suite 304, Port Washington, NY 11050 ("BORROWER"), to EUROHYPO AG, NEW
YORK BRANCH, the New York branch of a German banking corporation, having an
address at 1114 Avenue of the Americas, Twenty-Ninth Floor, New York, New York
10036 ("LENDER"), and is consented and agreed to by CALARESE PROPERTIES, INC., a
Massachusetts corporation, having its principal place of business at 1000
Franklin Village Drive, Franklin, Massachusetts 02038 ("MANAGER").
RECITALS:
A. Borrower by its Promissory Note of even date herewith given to
Lender (together with all extensions, renewals, modifications, substitutions and
amendments thereof, the "NOTE") is indebted to Lender in the principal sum of
FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($43,500,000.00)
advanced pursuant to the Loan Agreement of even date herewith between Borrower
and Lender (together with all extensions, renewals, modifications, substitutions
and amendments thereof, the "LOAN AGREEMENT"), in lawful money of the United
States of America, with interest from the date thereof at the rates set forth in
the Note (the indebtedness evidenced by the Note, together with such interest
accrued thereon, shall collectively be referred to as the "LOAN"), principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
B. The Loan is secured by, among other things, a Mortgage and Security
Agreement (the "MORTGAGE"), dated as of the date hereof, which grants Lender a
first lien on the property encumbered thereby (the "PROPERTY"). The Note, the
Loan Agreement, the Mortgage, this Assignment and any of the other documents
evidencing or securing the Loan are collectively referred to as the "LOAN
DOCUMENTS".
C. Pursuant to a certain Management Agreement of even date herewith
between Borrower and Manager (the "MANAGEMENT AGREEMENT") (a true, correct and
complete copy of which Management Agreement is attached hereto as Exhibit A),
Borrower employed Manager exclusively to rent, lease, operate and manage the
Property and Manager is entitled to certain management fees (the "MANAGEMENT
FEES") thereunder.
D. Lender requires as a condition to the making of the Loan that
Borrower assign the Management Agreement and that Manager subordinate its
interest in the Management Fees in lien and payment to the Mortgage as set forth
below.
AGREEMENT
For good and valuable consideration the parties hereto agree as
follows:
1. Assignment of Management Agreement. As additional collateral
security for the Loan, Borrower hereby conditionally transfers, sets over and
assigns to Lender all of Borrower's right, title and interest in and to the
Management Agreement, said transfer and assignment to automatically become a
present, unconditional assignment, at Lender's option, upon the occurrence and
during the continuance of an Event of Default under the Note, the Loan
Agreement, the Mortgage or any of the other Loan Documents (each, an "EVENT OF
DEFAULT").
2. Subordination of Management Fees. The Management Fees and the
Management Agreement and all rights and privileges of Manager to the Management
Fees or under the Management Agreement are hereby and shall at all times
continue to be subject and unconditionally subordinate in all respects in lien
and payment to the lien and payment of the Mortgage, the Note, the Loan
Agreement and the other Loan Documents and to any renewals, extensions,
modifications, assignments, replacements, or consolidations thereof and the
rights, privileges, and powers of Lender thereunder.
3. Estoppel. Manager represents and warrants that (a) the Management
Agreement is in full force and effect and has not been modified, amended or
assigned other than pursuant to this Assignment and constitutes the entire
agreement between Manager and Borrower with respect to management of the
Property, (b) neither Manager nor Borrower is in default under any of the terms,
covenants or provisions of the Management Agreement and Manager knows of no
event which, but for the passage of time or the giving of notice or both, would
constitute an event of default under the Management Agreement, (c) neither
Manager nor Borrower has commenced any action or given or received any notice
for the purpose of terminating the Management Agreement, (d) the Management Fees
and all other sums due and payable to the Manager under the Management Agreement
have been paid in full and (e) that Manager is aware that the Leases and Rents
relating to the Property have been assigned collaterally to Lender pursuant to
the Loan Documents. Manager and Borrower agree not to amend, modify, replace,
substitute, cancel or terminate the Management Agreement without Lender's prior
written consent.
4. Agreement by Borrower and Manager. Borrower and Manager hereby agree
that upon the occurrence and during the continuance of an Event of Default
during the term of this Assignment or upon the occurrence of any event which
would entitle Lender to terminate the Management Agreement in accordance with
the terms of the Loan Documents, Lender may terminate the Management Agreement
and require Manager to transfer its responsibility for the management of the
Property to a management company selected by Lender in Lender's reasonable
discretion, effective as of the date set forth in Lender's notice to Manager.
Following any such termination, Manager shall apply all rents, security
deposits, issues, proceeds and profits of the Property in accordance with
Lender's written directions to Manager. Any such termination of the Management
Agreement by Lender hereunder (and any termination under Sections 5 or 6 hereof)
shall, as between Borrower and Manager, be deemed a termination by Borrower
under the Management Agreement, and Manager's rights with respect to Borrower
shall be determined pursuant to the terms of the Management Agreement.
-2-
5. Borrower's Right to Replace Manager. Borrower shall have the right
to terminate the Management Agreement and enter into a new management agreement
with the Approved Property Manager in accordance with Section 7.2 of the Loan
Agreement.
6. Lender's Right to Replace Manager. In addition to the foregoing, in
the event that Lender, in Lender's reasonable discretion, at any time during the
term of this Assignment, determines that the Property is not being managed in
accordance with generally accepted management practices for properties similar
to the Property, Lender shall deliver written notice thereof to Borrower and
Manager, which notice shall specify with particularity the grounds for Lender's
determination. If Lender reasonably determines that the conditions specified in
Lender's notice are not remedied to Lender's reasonable satisfaction by Borrower
or Manager within thirty (30) days from receipt of such notice or that Borrower
or Manager have failed to diligently undertake correcting such conditions within
such thirty (30) day period, Lender may direct Borrower to terminate Manager as
manager of the Property and terminate the Management Agreement and to replace
Manager with a management company acceptable to Lender in Lender's sole
discretion and in such an event, Manager acknowledges that Lender shall not be
liable to Manager for any unpaid Management Fees which accrued prior to the date
of such termination.
7. Receipt of Management Fees. Manager shall not be obligated to return
or refund to Lender any Management Fees or other fee, commission or other amount
received by Manager prior to the occurrence of the Event of Default, and to
which Manager was entitled under the Management Agreement.
8. Consent and Agreement by Manager. Manager hereby acknowledges and
consents to this Assignment and agrees that Manager will act in conformity with
the provisions of this Assignment and Lender's rights hereunder or otherwise
related to the Management Agreement. In the event that the responsibility for
the management of the Property is transferred from Manager in accordance with
the provisions hereof or otherwise, Manager shall fully cooperate in
transferring its responsibility to a new management company and effectuate such
transfer no later than thirty (30) days from the date the Management Agreement
is terminated. Further, Manager shall (a) not contest or impede the exercise by
Lender of any right it has under or in connection with this Assignment; (b) in
the manner provided for in this Assignment, give at least thirty (30) days prior
written notice to Lender of its intention to terminate the Management Agreement
or otherwise discontinue its management of the Property and (c) not amend any of
the provisions or terms of the Management Agreement without the prior consent of
Lender.
9. Termination. At such time as the Loan is paid in full and the
Mortgage is released of record, this Assignment and all of Lender's right, title
and interest hereunder with respect to the Management Agreement shall terminate.
10. Notices. All notices or other communications hereunder shall be in
writing and shall be given in accordance with Section 11.6 of the Loan
Agreement. Any notice or other communication to Manager shall be addressed as
follows (or at such other address and person as shall be designated by Manager
from time to time):
-3-
If to Manager: Calarese Properties, Inc.
100 Franklin Village Drive
Franklin, Massachusetts 02038
11. No Oral Change. This Assignment, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Borrower, Lender or Manager, but
only by an agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or termination
is sought.
12. Liability. This Assignment shall be binding upon and inure to the
benefit of Borrower, Manager and Lender and their respective successors and
assigns forever.
13. Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.
14. Governing Law. This Assignment shall be governed, construed,
applied and enforced in accordance with the laws of the State of New York and
the applicable laws of the United States of America.
15. Headings, etc. The headings and captions of various paragraphs of
this Assignment are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
16. Duplicate Originals, Counterparts. This Assignment may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Assignment may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Assignment. The failure of any party hereto
to execute this Assignment, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.
17. Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
18. Secondary Market. Lender may sell, transfer and deliver the Note
and assign the Mortgage, this Assignment and the other Loan Documents to one or
more investors in the secondary mortgage market ("INVESTORS"). In connection
with such sale or at any time prior to such sale, and from time to time, Lender
may retain or assign responsibility for servicing the Loan, including the Note,
the Mortgage, this Assignment and the other Loan Documents, or may delegate some
or all of such responsibility and/or obligations to a servicer including, but
not limited to, any subservicer or master servicer, on behalf of the Investors.
All references to Lender herein shall refer to and include any such servicer to
the extent applicable.
19. Further Assurances. Manager and Borrower shall, at Borrower's sole
cost and expense: (a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the Lender's rights
-4-
hereunder, as Lender may reasonably require; and (b) do and execute all and such
further lawful and reasonable acts, conveyances and assurances for the better
and more effective carrying out of the intents and purposes of this Assignment,
as Lender shall reasonably require from time to time.
20. Miscellaneous. (a) Wherever pursuant to this Assignment (i) Lender
exercises any right given to it to approve or disapprove, (ii) any arrangement
or term is to be satisfactory to Lender, or (iii) any other decision or
determination is to be made by Lender, the decision of Lender to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Lender, shall be
in the sole and absolute discretion of Lender and shall be final and conclusive,
except as may be otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Assignment it is provided that Borrower
shall pay any costs and expenses, such costs and expenses shall include, but not
be limited to, legal fees and disbursements of Lender actually incurred, whether
retained firms, the reimbursement for the expenses of in-house staff or
otherwise.
[NO FURTHER TEXT ON THIS PAGE]
-5-
IN WITNESS WHEREOF the undersigned have executed this
Assignment as of the date and year first written above.
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Brenda J. Walker
Title: Vice President
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the New York branch
of a German banking corporation
By:__________________________________
Name:
Title:
By: __________________________________
Name:
Title:
MANAGER:
-----------------------------------
a _________________________________
By:________________________________
Name:
Title:
EXHIBIT A
MANAGEMENT AGREEMENT
A-1
EXHIBIT 10.11
INDEPENDENT DIRECTOR'S CONTRACT
THIS AGREEMENT (The "Agreement") is made as of the ___ day of October 2004 and
is by and between Cedar-Franklin Village LLC, a Delaware limited liability
company (hereinafter referred to as "Company") and Suzanne M. Hay (hereinafter
referred to as "Director").
BACKGROUND
Company desires to retain Director for the duties of Independent
Director and Director desires to be retained for such position and to perform
the duties required of such position in accordance with the terms and conditions
of this Agreement.
AGREEMENT
In consideration for the above recited promises and the mutual promises
contained herein, the adequacy and sufficiency of which are hereby acknowledged,
Company and Director hereby agree as follows:
1. DUTIES. The Company hereby requires that the Director is available
to perform such duties as Independent Director as may be determined and assigned
by the Board of Directors of the Company and the Company's Limited Liability
Company Agreement. Director agrees to devote as much time as is necessary to
perform completely the duties as Independent Director of the Company.
2. TERM. Except in the case of early termination, as hereinafter
specifically provided, the term of this Agreement shall commence as of October
__, 2004 and shall continue for an indefinite period.
3. COMPENSATION. For all services to be rendered by Director in any
capacity hereunder, the Company agrees to pay Director a base fee of $1,500 per
year payable in advance. The initial year's Base fee is considered earned when
paid and is nonrefundable. The initial year's payment of $1,500 is due upon
execution of this Agreement; thereafter, payment shall be due on or before
October 1st of each succeeding year. Such fee may be adjusted from time to time
as agreed by the parties. Director attendance at any meetings outside of the
greater Wilmington area will be compensated at a mutually agreed upon rate.
Company agrees to increase the base fee in the event of an increase in
the cost of living. Such increase shall occur on October 1st, beginning October
1, 2009 and then October 1st of each succeeding year. The base fee set forth in
paragraph 3, as adjusted by previous cost of living adjustments, will be
increased by the percentage by which the U.S. Consumer Price Index, All Urban
Consumers (CPI-U), All Items, has increased since the previous anniversary or
escalation date.
4. EXPENSES. In addition to the compensation provided in paragraph 3
hereof, the Company will reimburse Director for pre-approved reasonable business
related expenses incurred in good faith in the performance of Director's duties
for the Company. Such payments shall be made by the Company upon submission by
the Director of a signed statement itemizing the expenses incurred. Such
statement shall be accompanied by sufficient documentary matter to support the
expenditures.
5. CONFIDENTIALITY. The Company and Director each acknowledge that, in
order for the intents and purposes of this Agreement to be accomplished,
Director shall necessarily be obtaining access to certain confidential
information concerning the Company and its affairs, including, but not limited
to business methods, information systems, financial data and strategic plans
which are unique assets of the Company ("Confidential Information"). Director
covenants not to, either directly or indirectly, in any manner, utilize or
disclose to any person, firm, corporation, association or other entity any
Confidential Information.
6. NOTICE OF MATERIAL ADVERSE CHANGE IN FINANCIAL CONDITION OF THE
COMPANY. The Company shall notify Director in writing, at the earliest
practicable time, of any material adverse change in the financial condition of
the Company.
7. TERMINATION. With or without cause, the Company and Director may
each terminate this Agreement at any time upon ten (10) days written notice, and
the Company shall be obligated to pay to Director the compensation and expenses
due up to the date of the termination. If termination occurs prior to October
1st of any year after the first year of this agreement, the Company shall be
entitled to receive, upon written request by the Company, a prorated refund of
the portion of the base fee that relates to the period after the termination
date. Such written request must be submitted within ninety (90) days of the
termination date. Nothing contained herein or omitted herefrom shall prevent the
member(s) of the Company from removing Director with immediate effect at any
time for any reason.
8. INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless Director, to the full extent allowed by the law of the State of
Delaware, and as provided by, or granted pursuant to, any charter provision,
operating agreement provision, agreement (including, without limitation, the
Indemnification Agreement executed herewith), vote of members or disinterested
managers or otherwise, both as to action in Director's official capacity and as
to action in another capacity while holding such office, to the extent such
other action and capacity are required by the Board of Directors of the Company
or by the Company's Limited Liability Company Agreement.
9. EFFECT OF WAIVER. The waiver by either party of the breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach thereof.
10. NOTICE. Any and all notices referred to herein shall be sufficient
if furnished in writing at the following addresses:
To the Company: Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Port Washington, NY 11050
Attn: Brenda J. Walker
With copy to: Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Port Washington, NY 11050
Attn: Stuart H. Widowski, Esq.
To Director: Suzanne M. Hay
Entity Services (SPV), LLC
103 Foulk Road, Suite 200
Wilmington, DE 19803
11. ARBITRATION. Any dispute or claim arising out of, or relating to,
this Agreement or any breach thereof, with the sole exception of any dispute or
claim arising out of, or relating to, indemnification and advancement rights of
Director, shall be submitted to binding arbitration which shall take place at
Wilmington, Delaware, in accordance with the Rules of the American Arbitration
Association; and judgment upon the award rendered may be entered in any court
having jurisdiction over the dispute. The agreement to arbitrate herein recited
is based upon mutual consideration exchanged between the parties hereto, and is
irrevocable. The award of the arbitrators shall be rendered by majority
agreement and shall constitute a final resolution of the dispute or claim on
questions of both law and fact pertaining to the dispute or claim submitted
hereunder.
12. GOVERNING LAW. This Agreement shall be interpreted in accordance
with, and the rights of the parties hereto shall be determined by, the laws of
the State of Delaware without reference to that state's conflicts of laws
principles.
13. ASSIGNMENT. The rights and benefits of the Company under this
Agreement shall be transferable, and all the covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by or against, its successors
and assigns. The duties and obligations of the Director under this Agreement are
personal and therefore Director may not assign any right or duty under this
Agreement without the prior written consent of the Company.
14. MISCELLANEOUS. (a) If any provision of this Agreement shall be
declared invalid or illegal, for any reason whatsoever, then, notwithstanding
such invalidity or illegality, the remaining terms and provisions of the within
Agreement shall remain in full force and effect in the same manner as if the
invalid or illegal provision had not been contained herein; (b) This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto, and
their respective heirs, executors, administrators, successors and assigns.
15. ARTICLE HEADINGS. The article headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Independent
Director's Contract to be duly executed and signed as of the day and year first
above written.
Cedar-Franklin Village LLC
BY:
--------------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
INDEPENDENT DIRECTOR
BY:
--------------------------------------------
Suzanne M. Hay
INDEMNIFICATION AGREEMENT
This Agreement is made as of the ___ day of October 2004, by
and between Cedar-Franklin Village LLC ("Indemnitors") and Suzanne M. Hay
(Indemnitee").
DEFINITIONS
Company Cedar-Franklin Village LLC
Expenses
All expenses, including reasonable attorneys' fees and
experts' fees, incurred in defense of or as a witness in a
civil or criminal action, suit or proceeding (including an
action by or in respect of the Company) and including
investigations by any government agency. Expenses include all
costs and charges incurred in preparation for any threatened
action, suit or proceeding, and appeals therefrom.
Losses
Damages, judgments, fines, penalties and amounts paid in
settlement incurred by Indemnitee in defending any civil or
criminal action, suit or proceeding, including investigations
by any government agency.
Asserted Liability
Any demand, claim or circumstance, which would give rise to a
claim or the commencement (or the threatened commencement) of
any action, proceeding or investigation that may result in
Losses which are subject to indemnification hereunder.
AGREEMENT
Indemnitors wish Indemnitee to serve as an Independent Director of the Company
and have requested that Indemnitee do so, and Indemnitee has agreed to serve in
such capacity under certain circumstances. In order to induce Indemnitee to
serve as an Independent Director and in consideration of Indemnitee's service in
such capacity, Indemnitors hereby agree to indemnify Indemnitee as follows:
1. Indemnification.
(a) Indemnitors shall pay on behalf of Indemnitee and his/her
estate, heirs, legal representatives or assigns any amount
which Indemnitee becomes legally obligated to pay on account
of (i) any claim(s) made against him/her for any error,
misstatement or misleading statement, act or omission, or
neglect or breach of duty committed, attempted or allegedly
committed or attempted by Indemnitee in the discharge of
his/her duties in his/her capacity of Independent Director or
(ii) any matter claimed against him/her by reason of his/her
serving in such capacity (including an action by or in the
right of the Company); provided that Indemnitor shall have no
obligation to indemnify Indemnitee to the extent of loss
arising from the willful misconduct, gross negligence or
self-dealing of the Indemnitee. The payments which Indemnitor
shall be obligated to make hereunder shall include, but not be
limited to, Expenses and Losses, so long as Indemnitee is
otherwise entitled to be indemnified hereunder in respect of
losses, action, suit or proceeding.
(b) Promptly after receipt by Indemnitee of notice of any Asserted
Liability that may result in losses, which are subject to
indemnification hereunder, Indemnitee shall give notice
thereof to Indemnitor.
2. Advance of Expenses. Expenses shall be promptly paid by Indemnitor in
advance of the final disposition of any action upon receipt of an
unsecured commitment by Indemnitee to repay amounts so advanced if it
shall ultimately and finally be determined that Indemnitee is not
entitled to be indemnified pursuant to this Agreement. In a suit
brought by Indemnitee to enforce a right to advances, it shall not be a
defense that he/she has not met the applicable standard of conduct set
forth in Delaware law with regard to indemnification.
3. Enforcement. If a claim under this Agreement is not paid promptly by
Indemnitor, the Indemnitee may bring suit against Indemnitor to recover
the unpaid amount of the claim and, if successful, in whole or in part,
the Indemnitee shall be entitled to be paid also the expense of
prosecuting such claim (including reasonable attorney's fees and other
expenses).
4. Subrogation. In the event of payment under this Agreement, Indemnitor
shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee.
5. Reimbursement. If it is ultimately and finally determined that
Indemnitee would not be permitted to be indemnified under the terms of
this Agreement or applicable law, Indemnitor shall be entitled to be
reimbursed by Indemnitee for all amounts advanced or paid; provided
that any obligation to reimburse Indemnitor shall be deferred until the
conclusion of any legal proceedings to determine whether such
reimbursement is legally required.
6. Effectiveness. All agreements and obligations of Indemnitor contained
herein shall continue during the period Indemnitee is an Independent
Director of the Company and shall continue thereafter so long as
Indemnitee shall be subject to any possible claim or threatened,
pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Indemnitee was a
Independent Director of the Company.
7. Successors. This Agreement shall be binding upon all
successors-in-interest to Indemnitor and shall inure to the benefit of
the heirs, personal representatives and estate of Indemnitee.
8. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby,
and shall be construed so as to give effect to the intent of the
parties that Indemnitor provide protection to Indemnitee to the fullest
enforceable extent.
9. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
instrument.
10. Other Rights. The rights of the Indemnitee hereunder shall be in
addition to, and not in limitation of (or in any way limited by) any
other rights the Indemnitee may have under the certificate of formation
or operating agreement or any other agreement, under the appropriate
corporate law, or otherwise, it being understood that the rights set
forth hereunder may be enhanced but in no event shall be diminished in
any way.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with Delaware law, but without reference to the conflicts of
laws principles of that jurisdiction.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this
Indemnification Agreement to be duly executed and signed as of the day and year
first above written.
Cedar-Franklin Village LLC
By: ________________________________
Name:
Title:
_________________________________________
Suzanne M. Hay
EXHIBIT 10.12
BILL OF SALE AND GENERAL ASSIGNMENT
THIS BILL OF SALE AND GENERAL ASSIGNMENT (this "Assignment") is
executed as of the 1st day of November, 2004, by and between Roger V. Calarese
and A. Richard Calarese, as Trustees of Franklin Village Trust, a Massachusetts
nominee trust (the "Assignor"), having an office at 1000 Franklin Village Drive,
Franklin, Massachusetts 02038 and Cedar-Franklin Village LLC, a Delaware limited
liability company ("Assignee"), having an office c/o Cedar Shopping Centers
Partnership, L.P., 44 South Bayles Avenue, Port Washington, New York 11050.
WHEREAS, Assignee is this day purchasing from Assignor and Assignor is
conveying to Assignee the Property (as such term is described in that certain
Agreement of Purchase and Sale dated as of August 2, 2004, between Assignor and
Assignee (the "Purchase and Sale Agreement")).
WHEREAS, Assignor desires to assign, transfer, setover and deliver to
Assignee all of Assignor's rights, in and for all furnishings, fixtures,
fittings, appliances, apparatus, equipment, machinery and other items of
personal property, affixed or attached to, or placed or situated upon, the
Property (including, without limitation, the items set forth on Exhibit A
attached hereto and made a part hereof), and the following incidental rights and
appurtenances relating thereto (collectively, the "Assigned Properties"):
A. All of Assignor's right, title and interest in and to all use,
occupancy, building and operating permits, licenses, approvals,
documents, instruments, if any, issued from time to time with respect
to the Property or the Assigned Properties and all easements,
rights-of-way, privileges, appurtenances and other rights (including
without limitation, mineral and development rights with respect to the
Property);
B. All of Assignor's rights, title and interest in and to all existing and
assignable guaranties and warranties (express or implied), if any,
issued in connection with the construction, alteration and repair of
the Property and/or the purchase, installation and the repair of the
Assigned Properties; and
C. All copyrights, trademarks, service marks and other marks and trade or
business names relating to ownership, use and operation of the
Property.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Assignor hereby assigns, transfers, sets over and delivers to Assignee,
its successors and assigns, all of Assignor's right, title and
interest, if any, in and to the Assigned Properties.
2. The terms and provisions of this Assignment shall be binding upon
and inure to the benefit of the respective parties hereto, and their
respective successors and assigns.
IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly
executed as of the day and year first written above.
ASSIGNOR:
FRANKLIN VILLAGE TRUST, a
Massachusetts nominee trust
By: /s/ Roger V. Calarese
--------------------------------
Name: Roger V. Calarese
Title: Trustee
By: /s/ A. Richard Calarese
--------------------------------
Name: A. Richard Calarese
Title: Trustee
EXHIBIT A
PERSONAL PROPERTY
Inventory of paper products (paper towels, toilet paper, etc.)
Inventory of ice melt, trash liners, irrigation parts
Inventory of replacement parts for sprinkler system
Inventory of nails and screws
Inventory of chemicals for water cooling tower
Inventory of cleaning supplies
Inventory of light bulbs for interior and parking areas
Parking lot striper
Cast iron grates for tree planting
Banners and holiday decorations
EXHIBIT 10.13
================================================================================
LOAN AGREEMENT
Dated as of November 1, 2004
Between
CEDAR-FRANKLIN VILLAGE LLC,
as Borrower
and
EUROHYPO AG, NEW YORK BRANCH,
as Lender
================================================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION....................................................................1
Section 1.1 Definitions.....................................................................................1
Section 1.2 Principles of Construction.....................................................................16
II. THE LOAN..................................................................................................17
Section 2.1 The Loan.......................................................................................17
2.1.1 Agreement to Lend and Borrow.................................................................17
2.1.2 Single Disbursement to Borrower..............................................................17
2.1.3 The Note.....................................................................................17
2.1.4 Use of Proceeds..............................................................................17
Section 2.2 Interest Rate..................................................................................17
2.2.1 Interest Rate................................................................................17
2.2.2 Intentionally Omitted........................................................................17
2.2.3 Default Rate.................................................................................17
2.2.4 Interest Calculation.........................................................................17
2.2.5 Usury Savings................................................................................17
Section 2.3 Loan Payments..................................................................................18
2.3.1 Payment Before Maturity Date.................................................................18
2.3.2 Intentionally Omitted........................................................................18
2.3.3 Payment on Maturity Date.....................................................................18
2.3.4 Late Payment Charge..........................................................................18
2.3.5 Method and Place of Payment..................................................................18
Section 2.4 Prepayments....................................................................................19
2.4.1 Voluntary Prepayments........................................................................19
2.4.2 Mandatory Prepayments........................................................................19
2.4.3 Prepayments After Default....................................................................19
Section 2.5 Defeasance.....................................................................................19
2.5.1 Total Defeasance.............................................................................19
2.5.2 Partial Defeasance...........................................................................21
2.5.3 Defeasance Collateral Account................................................................24
2.5.4 Successor Borrower...........................................................................25
Section 2.6 Foreign Lenders................................................................................25
III. REPRESENTATIONS AND WARRANTIES............................................................................26
Section 3.1 Borrower Representations.......................................................................26
3.1.1 Organization.................................................................................26
3.1.2 Proceedings..................................................................................26
3.1.3 No Conflicts.................................................................................27
</TABLE>
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<TABLE>
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3.1.4 Litigation...................................................................................27
3.1.5 Agreements...................................................................................27
3.1.6 Consents.....................................................................................27
3.1.7 Title........................................................................................27
3.1.8 No Plan Assets...............................................................................27
3.1.9 Compliance...................................................................................28
3.1.10 Financial Information........................................................................28
3.1.11 Condemnation.................................................................................28
3.1.12 Utilities and Public Access..................................................................28
3.1.13 Separate Lots................................................................................28
3.1.14 Assessments..................................................................................28
3.1.15 No Defenses..................................................................................29
3.1.16 Assignment of Leases.........................................................................29
3.1.17 Insurance....................................................................................29
3.1.18 Licenses.....................................................................................29
3.1.19 Flood Zone...................................................................................29
3.1.20 Physical Condition...........................................................................29
3.1.21 Boundaries...................................................................................30
3.1.22 Leases.......................................................................................30
3.1.23 Filing and Recording Taxes...................................................................30
3.1.24 Single Purpose...............................................................................31
3.1.25 Tax Filings..................................................................................34
3.1.26 Solvency.....................................................................................34
3.1.27 Federal Reserve Regulations..................................................................34
3.1.28 Organizational Chart.........................................................................34
3.1.29 Investment Company Act.......................................................................34
3.1.30 Access/Utilities.............................................................................35
3.1.31 No Bankruptcy Filing.........................................................................35
3.1.32 Full and Accurate Disclosure.................................................................35
3.1.33 Foreign Person...............................................................................35
3.1.34 No Change in Facts or Circumstances; Disclosure..............................................35
3.1.35 Perfection of Accounts.......................................................................35
3.1.36 Intentionally Omitted........................................................................36
3.1.37 Intentionally Omitted........................................................................36
3.1.38 Patriot Act..................................................................................36
Section 3.2 Survival of Representations....................................................................36
IV. BORROWER COVENANTS........................................................................................36
Section 4.1 Borrower Affirmative Covenants.................................................................36
4.1.1 Existence; Compliance with Legal Requirements................................................37
4.1.2 Taxes and Other Charges......................................................................37
4.1.3 Litigation...................................................................................37
4.1.4 Access to Property...........................................................................37
4.1.5 Intentionally Omitted........................................................................37
4.1.6 Financial Reporting..........................................................................37
</TABLE>
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<TABLE>
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4.1.7 Title to the Property........................................................................40
4.1.8 Estoppel Statement...........................................................................40
4.1.9 Leases.......................................................................................40
4.1.10 Alterations..................................................................................41
4.1.11 Intentionally Omitted........................................................................42
4.1.12 Material Agreements..........................................................................42
4.1.13 Performance by Borrower......................................................................42
4.1.14 Intentionally Omitted........................................................................42
4.1.15 Business and Operations......................................................................42
4.1.16 Loan Fees....................................................................................42
4.1.17 Intentionally Omitted........................................................................42
4.1.18 Handicapped Access...........................................................................42
4.1.19 Intentionally Omitted........................................................................43
4.1.20 Notice of Certain Events.....................................................................43
4.1.21 Further Assurances...........................................................................43
4.1.22 Taxes on Security............................................................................44
4.1.23 Stop and Shop Estoppel.......................................................................44
Section 4.2 Borrower Negative Covenants....................................................................44
4.2.1 Liens........................................................................................44
4.2.2 Dissolution..................................................................................44
4.2.3 Debt Cancellation............................................................................44
4.2.4 Zoning.......................................................................................45
4.2.5 No Joint Assessment..........................................................................45
4.2.6 Principal Place of Business..................................................................45
4.2.7 ERISA........................................................................................45
4.2.8 Material Agreements..........................................................................45
4.2.9 Intentionally Deleted........................................................................46
4.2.10 Intentionally Omitted........................................................................46
V. INSURANCE, CASUALTY AND CONDEMNATION......................................................................46
Section 5.1 Insurance......................................................................................46
5.1.1 Insurance Policies...........................................................................46
5.1.2 Insurance Company............................................................................50
Section 5.2 Casualty and Condemnation......................................................................50
5.2.1 Casualty.....................................................................................50
5.2.2 Condemnation.................................................................................51
5.2.3 Casualty Proceeds............................................................................51
Section 5.3 Delivery of Net Proceeds.......................................................................51
5.3.1 Minor Casualty or Condemnation...............................................................51
5.3.2 Major Casualty or Condemnation...............................................................52
VI. RESERVE FUNDS.............................................................................................55
Section 6.1 Required Repair Funds..........................................................................55
6.1.1 Deposit of Required Repair Funds.............................................................55
</TABLE>
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<TABLE>
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6.1.2 Release of Required Repair Funds.............................................................55
Section 6.2 Tax Funds......................................................................................56
6.2.1 Deposits of Tax Funds........................................................................56
6.2.2 Release of Tax Funds.........................................................................56
Section 6.3 Insurance Funds................................................................................56
6.3.1 Deposits of Insurance Funds..................................................................56
6.3.2 Release of Insurance Funds...................................................................57
Section 6.4 Capital Expenditure Funds......................................................................57
6.4.1 Deposits of Capital Expenditure Funds........................................................57
6.4.2 Release of Capital Expenditure Funds.........................................................57
Section 6.5 Rollover Funds.................................................................................58
6.5.1 Deposits of Rollover Funds...................................................................58
6.5.2 Release of Rollover Funds....................................................................58
Section 6.6 Intentionally Deleted..........................................................................59
Section 6.7 Security Interest in Reserve Funds.............................................................59
6.7.1 Grant of Security Interest...................................................................59
6.7.2 Interest on Reserve Funds....................................................................59
6.7.3 Prohibition Against Further Encumbrance......................................................60
VII. PROPERTY MANAGEMENT.......................................................................................60
Section 7.1 The Management Agreement.......................................................................60
Section 7.2 Prohibition Against Termination or Modification................................................60
Section 7.3 Replacement of Manager.........................................................................61
VIII. TRANSFERS.................................................................................................61
Section 8.1 Prohibited Transfer or Encumbrance of Property.................................................61
Section 8.2 Permitted Transfers............................................................................63
8.2.1 Permitted Transfer of the Property...........................................................63
8.2.2 Permitted Transfer of Interest in Borrower...................................................64
Section 8.3 Substitute Guarantor...........................................................................64
IX. SALE AND SECURITIZATION OF MORTGAGE.......................................................................65
Section 9.1 Sale of Mortgage and Securitization............................................................65
Section 9.2 Securitization Indemnification.................................................................66
X. DEFAULTS..................................................................................................68
Section 10.1 Event of Default...............................................................................68
Section 10.2 Remedies.......................................................................................70
Section 10.3 Right to Cure Defaults.........................................................................72
Section 10.4 Remedies Cumulative............................................................................72
</TABLE>
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<TABLE>
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XI. MISCELLANEOUS.............................................................................................72
Section 11.1 Successors and Assigns.........................................................................72
Section 11.2 Lender's Discretion............................................................................72
Section 11.3 Governing Law..................................................................................73
Section 11.4 Modification, Waiver in Writing................................................................74
Section 11.5 Delay Not a Waiver.............................................................................74
Section 11.6 Notices........................................................................................75
Section 11.7 Trial by Jury..................................................................................76
Section 11.8 Headings.......................................................................................76
Section 11.9 Severability...................................................................................76
Section 11.10 Preferences....................................................................................77
Section 11.11 Waiver of Notice...............................................................................77
Section 11.12 Remedies of Borrower...........................................................................77
Section 11.13 Expenses; Indemnity............................................................................77
Section 11.14 Schedules Incorporated.........................................................................78
Section 11.15 Offsets, Counterclaims and Defenses............................................................78
Section 11.16 No Joint Venture or Partnership; No Third Party Beneficiaries..................................79
Section 11.17 Publicity......................................................................................79
Section 11.18 Waiver of Marshalling of Assets................................................................79
Section 11.19 Waiver of Offsets/Defenses/Counterclaims.......................................................80
Section 11.20 Conflict; Construction of Documents; Reliance..................................................80
Section 11.21 Brokers and Financial Advisors.................................................................80
Section 11.22 Exculpation....................................................................................80
Section 11.23 Prior Agreements...............................................................................83
Section 11.24 Servicer.......................................................................................83
Section 11.25 Joint and Several Liability....................................................................83
Section 11.26 Creation of Security Interest..................................................................83
Section 11.27 Assignments and Participations.................................................................84
Section 11.28 Set-Off........................................................................................84
Section 11.29 Component Notes................................................................................84
Section 11.30 Approvals; Third Parties; Conditions...........................................................85
Section 11.31 Limitation on Liability of Lender's Officers, Employees, etc...................................85
SCHEDULES
Schedule I - Rent Roll
Schedule II - Required Repairs
Schedule III - Organizational Chart
Schedule IV - Form of Subordination, Non-Disturbance and Attornment Agreement
Schedule V - Intentionally Deleted
Schedule VI - Description/Diagram of Release Parcel
</TABLE>
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of November 1, 2004 (as amended,
restated, replaced, supplemented or otherwise modified from time to time, this
"AGREEMENT"), between EUROHYPO AG, NEW YORK BRANCH, the New York branch of a
German banking corporation, having an address at 1114 Avenue of the Americas,
Twenty-Ninth Floor, New York, New York 10036 (together with its permitted
successors and assigns, "LENDER"), and CEDAR-FRANKLIN VILLAGE LLC, a Delaware
limited liability company, having an address at c/o Cedar Shopping Centers
Partnership, L.P., 44 South Bayles Avenue, Suite 304, Port Washington, NY 11050
(together with its permitted successors and assigns "BORROWER").
All other capitalized terms used herein shall have the
respective meanings set forth in Article I hereof.
W I T N E S S E T H:
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower,
subject to and in accordance with the conditions and terms of this Agreement and
the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree,
represent and warrant as follows:
I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
For all purposes of this Agreement, except as otherwise
expressly provided:
"ACCESS LAWS" shall have the meaning set forth in Section
4.1.18.
"ADDITIONAL COLLATERAL" shall mean U.S. Obligations, that
provide payments on a portion of the Loan in the principal amount of $3,200,000
which are (i) paid on or prior to, but as close as possible to, the Business Day
immediately preceding all Monthly Payment Dates and other scheduled payment
dates, hereunder and (ii) in amounts equal to the scheduled payments of interest
up to and including the Permitted Repayment Date (including, the payment of
principal in the amount of $3,200,000.00 on the Permitted Repayment Date), and
all other payments, if any, required, under the Loan Documents for servicing
fees, and other similar charges.
"ACCOUNTS" shall have the meaning set forth in Section
3.1.35(a).
"ACQUIRED PROPERTY STATEMENTS" shall have the meaning set
forth in Section 9.1(c)(i).
"AFFILIATE" shall mean, as to any Person, any other Person
that, directly or indirectly, owns more than forty percent (40%) of, is in
control of, is controlled by or is under common ownership or control with such
Person or is a director or officer of such Person or of an Affiliate of such
Person. As used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.
"AFFILIATED MANAGER" shall mean any managing agent in which
Borrower, Borrower Principal, any SPC Party (if any) or any Affiliate of such
Persons has, directly or indirectly, any legal, beneficial or economic interest.
"AGENT" shall mean PNC Bank, National Association and any
successor Eligible Institution thereto.
"ALLOCATED LOAN AMOUNT" shall mean with respect to the release
of the Release Parcel pursuant to Section 2.5.2, $4,785,000.
"ALTA" shall mean American Land Title Association, or any
successor thereto.
"ALTERATION THRESHOLD" shall mean an amount equal to five
percent (5%) of the original principal amount of the Loan.
"ANNUAL BUDGET" shall mean the operating and capital budget
for the Property setting forth Borrower's good faith estimate of Gross Income
from Operations, Operating Expenses, and Capital Expenditures for the applicable
Fiscal Year.
"APPROVED PROPERTY MANAGER" shall mean (i) Cedar Shopping
Centers Partnership L.P. , a Delaware limited partnership, for so long as that
entity is an Affiliate or sole member of Borrower and controlled by Cedar
Shopping Centers, Inc., a Maryland corporation or (ii) a reputable and
experienced management organization possessing experience in managing properties
similar in size, scope and value to the Property, provided that with respect to
an Approved Property Manager under clause (ii), (A) prior to a Securitization,
Borrower shall have obtained the prior written consent of Lender for such
entity, which consent shall not be unreasonably withheld and (B) after a
Securitization, Borrower shall have obtained prior written confirmation from the
Rating Agencies that management of the Property by such entity will not, in and
of itself, cause a downgrade, withdrawal or qualification of the then current
ratings of the Securities issued pursuant to the Securitization.
"ASSIGNMENT OF LEASES" shall mean that certain first priority
Assignment of Leases and Rents, dated as of the date hereof, from Borrower, as
assignor, to Lender, as assignee, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
"ASSIGNMENT OF MANAGEMENT AGREEMENT" shall mean that certain
Assignment of Management Agreement and Subordination of Management Fees dated
the date hereof among Borrower, Manager and Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
-2-
"AWARD" shall mean any compensation paid by any Governmental
Authority in connection with a Condemnation in respect of all or any part of the
Property.
"BANKRUPTCY CODE" shall mean Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes and all rules and regulations from time to time promulgated
thereunder, and any comparable foreign laws relating to bankruptcy, insolvency
or creditors' rights.
"BASIC CARRYING COSTS" shall mean the sum of the following
costs associated with the Property for the relevant Fiscal Year or payment
period: (i) Taxes and (ii) Insurance Premiums.
"BORROWER PRINCIPAL" shall mean Cedar Shopping Centers
Partnership, L.P.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a legal holiday on which national banks are not open for general
business in (i) the State of New York, (ii) the state where the corporate trust
office of the Trustee is located, or (iii) the state where the servicing offices
of the Servicer are located.
"CAPITAL EXPENDITURES" for any period shall mean amounts
expended for replacements and alterations to the Property and required to be
capitalized according to GAAP.
"CAPITAL EXPENDITURE FUNDS" shall have the meaning set forth
in Section 6.4.1.
"CAPITAL EXPENDITURES WORK" shall mean any labor performed or
materials installed in connection with any Capital Expenditure.
"CASH MANAGEMENT AGREEMENT" shall mean that certain Cash
Management Agreement of even date herewith among Lender, Borrower, Manager and
Agent.
"CASUALTY" shall mean the occurrence of any casualty, damage
or injury, by fire or otherwise, to the Property or any part thereof.
"CASUALTY CONSULTANT" shall have the meaning set forth in
Section 5.3.2(c).
"CASUALTY RETAINAGE" shall have the meaning set forth in
Section 5.3.2(d).
"CLOSING DATE" shall mean the date of funding the Loan.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and as it may be further amended from time to time, any successor
statutes thereto, and applicable U.S. Department of Treasury regulations issued
pursuant thereto in temporary or final form.
"CONDEMNATION" shall mean a temporary or permanent
taking by any Governmental Authority as the result or in lieu or in anticipation
of the exercise of the right of condemnation or eminent domain, of all or any
part of the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the
Property or any part thereof.
-3-
"CONTROL" shall mean the power to direct the
management and policies of a Restricted Party, directly or indirectly, whether
through the ownership of voting securities or other beneficial interests, by
contract or otherwise.
"DEBT" shall mean the outstanding principal amount of
the Loan together with all interest accrued and unpaid thereon and all other
sums (including the Yield Maintenance Premium) due to Lender in respect of the
Loan under the Note, this Agreement, the Mortgage, the Environmental Indemnity
or any other Loan Document.
"DEBT SERVICE" shall mean, with respect to any particular
period of time, scheduled interest payments under the Note.
"DEBT SERVICE COVERAGE RATIO" shall mean a ratio for the
applicable period in which:
(i) the numerator is the Net Cash Flow for such
period as set forth in the financial statements required in
accordance with this Agreement; and
(ii) the denominator is the Debt Service due for such
period.
"DEFAULT" shall mean the occurrence of any
event hereunder or under any other Loan
Document which, but for the giving of notice or passage of time, or both, would
be an Event of Default.
"DEFAULT RATE" shall mean, with respect to the Loan,
a rate per annum equal to the lesser of (i) the maximum rate permitted by
applicable law, or (ii) five percent (5%) above the Interest Rate.
"DEFEASANCE COLLATERAL" shall mean the Total Defeasance
Collateral or the Partial Defeasance Collateral, as the case may be.
"DEFEASANCE COLLATERAL ACCOUNT" shall have the meaning set
forth in Section 2.5.3.
"DEFEASANCE DATE" shall mean the Total Defeasance Date or the
Partial Defeasance Date, as the case may be.
"DEFEASANCE EVENT" shall mean a Total Defeasance Event or a
Partial Defeasance Event, as the case may be.
"DEFEASED NOTE" shall have the meaning set forth in Section
2.5.2(a)(iv) hereof.
"DISCLOSURE DOCUMENT" shall have the meaning set forth in
Section 9.2(a).
"DISCLOSURE DOCUMENT DATE" shall have the meaning set forth in
Section 9.1(c)(iv).
-4-
"ELIGIBLE ACCOUNT" shall mean a separate and identifiable
account from all other funds held by the holding institution that is either (i)
an account or accounts maintained with a federal or state-chartered depository
institution or trust company which complies with the definition of Eligible
Institution or (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity which, in the case of a state chartered depository
institution or trust company is subject to regulations substantially similar to
12 C.F.R. ss.9.10(b), having in either case a combined capital and surplus of at
least $50,000,000.00.00 and subject to supervision or examination by federal and
state authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"ELIGIBLE INSTITUTION" shall mean a depository institution or
trust company insured by the Federal Deposit Insurance Corporation the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by S&P and having at least the equivalent rating from one of the two other
Rating Agencies in the case of accounts in which funds are held for thirty (30)
days or less or, in the case of Letters of Credit or accounts in which funds are
held for more than thirty (30) days, the long term unsecured debt obligations of
which are rated at least "AA" by Fitch and S&P and "Aa2" by Moody's.
"ENVIRONMENTAL INDEMNITY" shall mean that certain
Environmental Indemnity Agreement, dated as of the date hereof, executed by
Borrower and Guarantor in connection with the Loan for the benefit of Lender.
"EQUIPMENT" shall have the meaning set forth in the granting
clause of the Mortgage.
"ERISA" shall have the meaning set forth in Section 4.2.7.
"EVENT OF DEFAULT" shall have the meaning set forth in Section
10.1.
"EXCHANGE ACT" shall have the meaning set forth in Section
9.2(a).
"EXCHANGE ACT FILING" shall have the meaning set forth in
Section 9.1(c)(vii).
"EXECUTIVE ORDER" shall have the meaning set forth in the
definition of "Prohibited Person".
"EXXON REMEDIATION" shall mean those certain remediation
efforts at the Property made or to be made by Exxon Mobil in connection with a
petroleum release from an underground storage tank located on the Property,
which remediation efforts include that certain Phase III Remedial Action Plan
and that certain Phase VI Remedy Implementation Plan developed by Groundwater &
Environmental Services, Inc. in accordance with Environmental Law as enforced by
the New Jersey Department of Environmental Protection.
"FISCAL YEAR" shall mean each twelve month period
commencing on January 1 and ending on December 31 during each year of the term
of the Loan.
"FITCH" shall mean Fitch, Inc. and its successors.
-5-
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession.
"GOVERNMENTAL AUTHORITY" shall mean any court, board,
agency, commission, office or authority of any nature whatsoever or any
governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence.
"GROSS INCOME FROM OPERATIONS" shall mean, for any
period, all income, computed in accordance with GAAP, derived from the ownership
and operation of the Property from whatever source during such period,
including, but not limited to, Rents, utility charges, escalations, forfeited
security deposits, interest on credit accounts, service fees or charges, license
fees, parking fees, rent concessions or credits, and other pass-through or
reimbursements paid by tenants under the Leases of any nature but excluding
Rents from month-to-month tenants or tenants that are debtors in any proceeding
under the Bankruptcy Code, sales, use and occupancy or other taxes on receipts
required to be accounted for by Borrower to any Governmental Authority, refunds
and uncollectible accounts, sales of furniture, fixtures and equipment, Net
Proceeds (other than business interruption or other loss of income insurance),
and any disbursements to Borrower from the Tax Funds, Insurance Funds, the
Capital Expenditure Funds, the Rollover Funds, or any other escrow fund
established by the Loan Documents.
"GUARANTIES" shall have the meaning set forth in Section 8.3
hereof.
"GUARANTOR" shall mean Cedar Shopping Centers Partnership,
L.P.
"GUARANTY" shall mean that certain Guaranty of even date
herewith from Guarantor for the benefit of Lender.
"IMPROVEMENTS" shall have the meaning set forth in the
granting clause of the Mortgage.
"INDEBTEDNESS" shall mean, for any Person, without
duplication: (i) all indebtedness of such Person for borrowed money, for amounts
drawn under a letter of credit, or for the deferred purchase price of property
for which such Person or its assets is liable, (ii) all unfunded amounts under a
loan agreement, letter of credit, or other credit facility for which such Person
would be liable if such amounts were advanced thereunder, (iii) all amounts
required to be paid by such Person as a guaranteed payment to partners or a
preferred or special dividend, including any mandatory redemption of shares or
interests, (iv) all indebtedness guaranteed by such Person, directly or
indirectly, (v) all obligations under leases that constitute capital leases for
which such Person is liable, and (vi) all obligations of such Person under
interest rate swaps, caps, floors, collars and other interest hedge agreements,
in each case whether such Person is liable contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which obligations such Person
otherwise assures a creditor against loss.
-6-
"I&G FUNDS" shall mean the constituent entities (and their
wholly owned subsidiaries) from time to time of the fund marketed as the "J.P.
Morgan U.S. Real Estate Income and Growth Fund," of which JPMorgan Investment
Management Inc. (or JPMorgan Chase Bank, or any of their affiliates) and/or
their successors and assigns is the investment advisor and, as of the date
hereof includes, without limitation, JPM I&G Domestic REIT, Inc., J.P. Morgan
U.S. Real Estate Income and Growth Direct, LP, J.P. Morgan U.S. Real Estate
Income and Growth Corp. (Cayman), J.P. Morgan U.S. Real Estate Income and Growth
Finance Corp (Cayman), J.P. Morgan U.S. Real Estate Income and Growth Investment
Corp (Cayman), J.P. Morgan U.S. Real Estate Income and Growth GmBH & Co. KG, and
J.P. Morgan U.S. Real Estate and Growth Domestic, LP.
"INDEMNIFIED LIABILITIES" shall have the meaning set forth in
Section 11.13(b).
"INDEPENDENT DIRECTOR" shall have the meaning set forth in
Section 3.1.24(p).
"INTEREST RATE" shall mean a rate per annum equal to four and
eighty-one hundredths percent (4.81%).
"INSOLVENCY OPINION" shall mean that certain bankruptcy
non-consolidation opinion letter, dated the date hereof, rendered by Lavenfeld
Pearlstein, LLC in connection with the Loan.
"INSURANCE FUNDS" shall have the meaning set forth in Section
6.3.1.
"INSURANCE PREMIUMS" shall have the meaning set forth in
Section 5.1.1(b).
"LEASE" shall mean any lease, sublease or subsublease,
letting, license, concession or other agreement (whether written or oral and
whether now or hereafter in effect) pursuant to which any Person is granted a
possessory interest in, or right to use or occupy all or any portion of any
space in the Property, and every modification, amendment or other agreement
relating to such lease, sublease, subsublease, or other agreement entered into
in connection with such lease, sublease, subsublease, or other agreement and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto.
"LEGAL REQUIREMENTS" shall mean all federal, state,
county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions of Governmental
Authorities affecting Borrower or the Property or any part thereof or the
construction, use, alteration or operation thereof, or any part thereof, whether
now or hereafter enacted and in force, including, without limitation, the
Americans with Disabilities Act of 1990, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record or
known to Borrower, at any time in force affecting the Property or any part
thereof, including, without limitation, any which may (i) require repairs,
modifications or alterations in or to the Property or any part thereof, or (ii)
in any way limit the use and enjoyment thereof.
"LENDER GROUP" shall have the meaning set forth in Section
9.2(b).
-7-
"LENDER INDEMNITEES" shall have the meaning set forth in
Section 11.13(b).
"LIABILITIES" shall have the meaning set forth in Section
9.2(b).
"LIEN" shall mean any mortgage, deed of trust, lien,
pledge, hypothecation, assignment, security interest, or any other encumbrance
or charge, on or affecting the Property or any portion thereof or Borrower, or
any interest therein, including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, the filing of any financing
statement, and mechanic's, materialmen's and other similar liens and
encumbrances.
"LOAN" shall mean the loan in the original principal
amount of Forty-Three Million Five Hundred Thousand and No/100 Dollars
($43,500,000.00) made by Lender to Borrower pursuant to this Agreement evidenced
by the Note and secured by the Mortgage, together with all sums due or to become
due thereunder.
"LOAN DOCUMENTS" shall mean, collectively, this
Agreement, the Note, the Mortgage, the Assignment of Leases, the Cash Management
Agreement, the Environmental Indemnity, the Guaranty, the Supplemental Guaranty,
the Assignment of Management Agreement as well as all other documents now or
hereafter executed and/or delivered in connection with the Loan.
"LOAN TO VALUE RATIO" shall mean the ratio, as of a
particular date, in which the numerator is equal to the outstanding principal
balance of the Debt and the denominator is equal to the appraised value of the
Property based on a FIRREA-conforming appraisal in form and substance
satisfactory to Lender, as determined by Lender in its sole and absolute
discretion.
"MAJOR LEASE" shall mean any Lease covering 10,000
square feet or more at the Property, provided that the calculations set forth in
this definition of Major Lease shall be made based on the aggregate square
footage leased, by any single Tenant and/or Affiliate of such Tenant, whether
pursuant to a single Lease or otherwise.
"MANAGEMENT AGREEMENT" shall mean that certain
management agreement entered into by and between Borrower and the Manager,
pursuant to which the Manager is to provide management and other services with
respect to the Property.
"MANAGER" shall mean Calarese Properties, Inc., a
Massachusetts corporation, or any other manager approved in accordance with the
terms and conditions of the Loan Documents.
"MATERIAL ADVERSE EFFECT" shall mean any material
adverse effect upon (i) the business operations, economic performance, assets,
financial condition, equity, contingent liabilities, prospects, material
agreements or results of operations of Borrower, Guarantor or the Property, (ii)
the ability of Borrower or Guarantor to perform, in all material respects, its
obligations under each of the Loan Documents, (iii) the enforceability or
validity of any Loan Document, the perfection or priority of any Lien created
under any Loan Document or the remedies of the Lender under any Loan Document or
(iv) the value of, or cash flow from the Property or the operations thereof.
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"MATERIAL AGREEMENTS" shall mean each contract and
agreement relating to the ownership, management, development, use, operation,
leasing, maintenance, repair or improvement of the Property, other than the
Management Agreement and the Leases or other contract and/or agreement that is
material to the use and operation of the Property or to Borrower.
"MATURITY DATE" shall mean November 1, 2011 or such
other date on which the final payment of principal of the Note becomes due and
payable as therein or herein provided, whether at such stated maturity date, by
declaration of acceleration, or otherwise.
"MAXIMUM LEGAL RATE" shall mean the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the indebtedness
evidenced by the Note and as provided for herein or the other Loan Documents,
under the laws of such state or states whose laws are held by any court of
competent jurisdiction to govern the interest rate provisions of the Loan.
"MINIMUM DISBURSEMENT AMOUNT" shall mean Twenty-Five Thousand
and No/100 Dollars ($25,000.00).
"MONTHLY DEBT SERVICE PAYMENT AMOUNT" shall mean an
amount equal to the interest on the outstanding principal balance of the Loan
that accrues at the Interest Rate during each calendar month during the term of
the Loan, calculated in the manner set forth herein.
"MONTHLY PAYMENT DATE" shall mean the first (1st) day
of every calendar month occurring during the term of the Loan, provided,
however, that Lender shall have the right at any time prior to Securitization of
the Loan to change the Monthly Payment Date to any other day (or such other day
of a calendar month selected by Lender, in its sole and absolute discretion, to
collect debt service payments under loans which it makes and securitizes) upon
notice to Borrower (in which event such change shall then be deemed effective)
and, if requested by Lender, Borrower shall promptly execute an amendment to
this Agreement to evidence such change, at no cost to Borrower (except that
Borrower shall pay its own legal fees).
"MOODY'S" shall mean Moody's Investors Service, Inc.
"MORTGAGE" shall mean that certain first priority
Mortgage and Security Agreement, dated the date hereof, executed and delivered
by Borrower as security for the Loan and encumbering the Property, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time
to time.
"NET CASH FLOW" shall mean, for any period, the
amount obtained by subtracting Operating Expenses for such period from Gross
Income from Operations for such period.
"NET PROCEEDS" shall mean: (i) the net amount of all
insurance proceeds payable as a result of a Casualty to the Property, after
deduction of reasonable costs and expenses (including, but not limited to,
reasonable attorneys' fees), if any, in collecting such insurance proceeds, or
(ii) the net amount of the Award, after deduction of reasonable costs and
expenses (including, but not limited to, reasonable attorneys' fees), if any, in
collecting such Award.
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"NET PROCEEDS DEFICIENCY" shall have the meaning set forth in
Section 5.3.2(f).
"NOTE" shall have the meaning set forth in Section 2.1.3.
"NOTICE" shall have the meaning set forth in Section 11.6.
"OFFICER'S CERTIFICATE" shall mean a certificate delivered to
Lender by Borrower which is signed by an authorized senior officer of Borrower.
"OPERATING AGREEMENTS" shall mean any material covenants,
restrictions or agreements of record relating to the construction, operation or
use of the Property.
"OPERATING EXPENSES" shall mean, for any period, the
total of all expenditures, computed on a cash accounting basis, of whatever kind
during such period relating to the operation, maintenance and management of the
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance (which
ordinary repairs and maintenance for the purposes of this definition shall be no
less than an assumed expense of $54,062.50 per month), insurance, license fees,
property taxes and assessments, advertising expenses, management fees, payroll
and related taxes, computer processing charges, tenant improvements, leasing
commissions and normalized capital expenditures (which tenant improvements,
leasing commissions and normalized capital expenditures for the purposes of this
definition shall be no less than an assumed expense of $413,579.00 per month),
operational equipment or other lease payments as approved by Lender, and other
similar costs, but excluding from such calculation depreciation, Debt Service
and interest costs.
"OTHER CHARGES" shall mean all ground rents,
maintenance charges, impositions other than Taxes, and any other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Property, now or hereafter levied
or assessed or imposed against the Property or any part thereof.
"PARTIAL DEFEASANCE COLLATERAL" shall mean U.S.
Obligations, which provide payments (i) on or prior to, but as close as possible
to, the Business Day immediately preceding all Monthly Payment Dates and other
scheduled payment dates, if any, under the Defeased Note after the Partial
Defeasance Date and up to and including the Permitted Prepayment Date, and (ii)
in amounts equal to or greater than the Scheduled Partial Defeasance Payments
relating to such Monthly Payment Dates and other scheduled payment dates.
"PARTIAL DEFEASANCE DATE" shall have the meaning set forth in
Section 2.5.2(a)(i).
"PARTIAL DEFEASANCE EVENT" shall have the meaning set forth in
Section 2.5.2(a).
"PATRIOT ACT" shall mean collectively all laws relating to
terrorism or money laundering, including Executive Order No. 13224 on Terrorist
Financing (effective September 24, 2001) and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107 56).
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"PERMITTED ENCUMBRANCES" shall mean, collectively,
(i) the Liens and security interests created by the Loan Documents, (ii) all
Liens, encumbrances and other matters expressly set forth on Schedule A or
Schedule B of the Title Insurance Policy, (iii) Liens, if any, for Taxes imposed
by any Governmental Authority not yet due or delinquent, (iv) such other title
and survey exceptions as Lender has approved or may approve in writing in
Lender's sole discretion, and (v) easements granted by Borrower from and after
the date hereof in the ordinary course of business and approved by Lender, which
approval shall not be unreasonably withheld.
"PERMITTED INVESTMENTS" shall have the meaning set forth in
the Cash Management Agreement.
"PERMITTED PREPAYMENT DATE" shall have the meaning set forth
in Section 2.4.1.
"PERMITTED TRANSFEREE" shall mean a corporation,
partnership or limited liability company (i) acceptable to Lender in its sole
discretion, (ii) that qualifies as a single purpose, bankruptcy remote entity
under criteria established by the Rating Agencies and (iii) whose counsel has
delivered to Lender a non-consolidation opinion reasonably acceptable to Lender
and the Rating Agencies.
"PERSON" shall mean any individual, corporation,
partnership, limited liability company, joint venture, estate, trust,
unincorporated association, any other entity, any federal, state, county or
municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing.
"POLICY" shall have the meaning set forth in Section 5.1.1(b).
"PREPAYMENT DATE" shall mean the date on which the Loan is
prepaid in accordance with the terms hereof.
"PROHIBITED PERSON" shall mean any Person:
(i) listed in the Annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit,
or Support Terrorism (the "EXECUTIVE ORDER");
(ii) that is owned or controlled by, or acting for or on
behalf of, any Person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of the Executive Order;
(iii) with whom Lender is prohibited from dealing or otherwise
engaging in any transaction by any terrorism or money laundering Law,
including the Executive Order;
(iv) who commits, threatens or conspires to commit or supports
"terrorism" as defined in the Executive Order;
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(v) that is named as a "specially designated national and
blocked person" on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website or
at any replacement website or other replacement official publication of
such list; or
(vi) who is an Affiliate of a Person listed above.
"PROHIBITED TRANSFER" shall have the meaning
specified in Section 8.1(a).
"PROPERTY" shall mean the parcel of real property,
the Improvements thereon and all personal property owned by Borrower and
encumbered by the Mortgage, together with all rights pertaining to such property
and Improvements, all as more particularly described in the granting clauses of
the Mortgage.
"QUALIFIED TRANSFEREE" shall mean any one of the following
Persons or wholly owned subsidiaries of such Person:
(i) a pension fund, pension trust or pension account that (a)
has total real estate assets of at least One Billion Dollars and (b) is
managed by a Person who controls at least One Billion Dollars of real
estate equity assets; or
(ii) a pension fund advisor who (a) immediately prior to such
transfer, controls at least One Billion Dollars of real estate equity
assets and (b) is acting on behalf of one or more pension funds that,
in the aggregate, satisfy the requirements of clause (i) of this
definition; or
(iii) an insurance company which is subject to supervision by
the insurance commissioner, or a similar official or agency, of a state
or territory of the United States (including the District of Columbia)
(a) with a net worth, as of a date no more than six (6) months prior to
the date of the transfer of at least Five Hundred Million Dollars and
(b) who, immediately prior to such transfer, controls real estate
equity assets of at least One Billion Dollars; or
(iv) a corporation organized under the banking laws of the
United States or any state or territory of the United States (including
the District of Columbia) (a) with a combined capital and surplus of at
least Five Hundred Million Dollars and (b) who, immediately prior to
such transfer, controls real estate equity assets of at least One
Billion Dollars; or
(v) any Person (a) with a long-term unsecured debt rating from
the Rating Agencies of at least investment grade or (b) who (i)
directly or indirectly owns or operates at least twelve (12) regional
shopping centers totaling at least six million square feet of gross
leasable area, (ii) has a net worth, as of a date no more than six (6)
months prior to the date of such transfer, of at least Five Hundred
Million Dollars and (iii) immediately prior to such transfer, controls
real estate equity assets of at least One Billion Dollars.
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"RATING AGENCIES" shall mean, prior to the final
Securitization of the Loan, each of S&P, Moody's and Fitch, or any other
nationally-recognized statistical rating agency which has been designated by
Lender and, after the final Securitization of the Loan, shall mean any of the
foregoing that have rated any of the Securities.
"RATING AGENCY CONFIRMATION" shall mean a written
affirmation from each of the Rating Agencies that the credit rating of the
Securities by such Rating Agency immediately prior to the occurrence of the
event with respect to which such Rating Agency Confirmation is sought will not
be qualified, downgraded or withdrawn as a result of the occurrence of such
event, which affirmation may be granted or withheld in such Rating Agency's sole
and absolute discretion.
"REGISTRATION STATEMENT" shall have the meaning set forth in
Section 9.2(b).
"RELEASE DATE" shall mean the earlier to occur of (i)
the fourth (4th) anniversary of the Closing Date and (ii) the date that is two
(2) years from the "startup day" (within the meaning of Section 860G(a)(9) of
the Code) of the REMIC Trust established in connection with the last
Securitization involving any portion of this Loan.
"RELEASE PARCEL" shall mean that certain portion of
the Property comprising approximately 50,000 square feet of office space more
particularly shown on Schedule VI attached hereto.
"REMIC TRUST" shall mean a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code that holds
the Note or any portion thereof.
"RENTS" shall mean all rents (including, without
limitation, percentage rents), rent equivalents, moneys payable as damages or in
lieu of rent or rent equivalents, royalties (including, without limitation, all
oil and gas or other mineral royalties and bonuses), income, receivables,
receipts, revenues, deposits (including, without limitation, security, utility
and other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or paid
to or for the account of or benefit of Borrower or its agents or employees from
any and all sources arising from or attributable to the Property, and proceeds,
if any, from business interruption or other loss of income insurance.
"REQUIRED REPAIR FUNDS" shall have the meaning set forth in
Section 6.1.1.
"REQUIRED REPAIRS" shall have the meaning set forth in Section
6.1.1.
"RESERVE FUNDS" shall mean, collectively, the Capital
Expenditure Funds, the Insurance Funds, the Tax Funds, the Required Repair Funds
and the Rollover Funds.
"RESTORATION" shall have the meaning set forth in Section
5.2.1.
"RESTORATION THRESHOLD" shall mean Eight Hundred Seventy
Thousand and No/00 Dollars ($870,000.00).
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"RESTRICTED PARTY" shall mean Borrower, Borrower Principal,
and any SPC Party.
"ROLLOVER FUNDS" shall have the meaning set forth in Section
6.5.1.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"SALE OR PLEDGE" shall mean a voluntary or involuntary sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of
any options with respect to, or any other transfer or disposition of (directly
or indirectly, voluntarily or involuntarily, by operation of law or otherwise,
and whether or not for consideration or of record) of a legal or beneficial
interest, except with respect to Permitted Encumbrances.
"SCHEDULED DEFEASANCE PAYMENTS" shall mean Scheduled Partial
Defeasance Payments or Scheduled Total Defeasance Payments, as the case may be.
"SCHEDULED PARTIAL DEFEASANCE PAYMENTS" shall mean
scheduled payments of interest and principal under the Defeased Note for all
Monthly Payment Dates occurring after the Partial Defeasance Date and up to and
including the Permitted Prepayment Date (including, the outstanding principal
balance on the Defeased Note as of the Permitted Prepayment Date), and all
payments required after the Partial Defeasance Date, if any, under the Loan
Documents for servicing fees, and other similar charges.
"SCHEDULED TOTAL DEFEASANCE PAYMENTS" shall mean
scheduled payments of interest and principal under the Note in the amount of the
Monthly Debt Service Payment Amount for all Monthly Payment Dates occurring
after the Total Defeasance Date and up to and including the Permitted Prepayment
Date (including, the outstanding principal balance on the Note as of the
Permitted Prepayment Date), and all payments required after the Total Defeasance
Date, if any, under the Loan Documents for servicing fees and other similar
charges.
"SECONDARY MARKET TRANSACTION" shall have the meaning set
forth in Section 9.1(a).
"SECURITIES" shall have the meaning set forth in Section
9.1(a).
"SECURITIES ACT" shall have the meaning set forth in Section
9.2(a).
"SECURITIZATION" shall have the meaning set forth in Section
9.1(a).
"SECURITY AGREEMENT" shall mean a security agreement
in form and substance that would be satisfactory to a prudent lender pursuant to
which Borrower grants Lender a perfected, first priority security interest in
the Defeasance Collateral Account and the Defeasance Collateral.
"SERVICER" shall have the meaning set forth in Section
11.24(a).
"SERVICING AGREEMENT" shall have the meaning set forth in
Section 11.24(a).
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"SEVERED LOAN DOCUMENTS" shall have the meaning set forth in
Section 10.2(c).
"SPC PARTY" shall have the meaning set forth in Section
3.1.24(o).
"STANDARD STATEMENTS" shall have the meaning set forth in
Section 9.1(c)(i).
"STATE" shall mean the State or Commonwealth in which the
Property or any part thereof is located.
"STOP AND SHOP" shall mean Stop & Shop Supermarket Company,
Inc., as tenant under the Stop and Shop Lease.
"STOP AND SHOP LEASE" shall mean that certain lease dated July
1, 1986 between Stop and Shop, as tenant and Roger V. Calarese and Americo
Calarese as Trustees for Franklin Village Trust, as landlord (as modified and
amended, including without limitation the Stop and Shop Third Lease Amendment).
"STOP AND SHOP THIRD LEASE AMENDMENT" shall mean that certain
Third Amendment to the Stop and Shop Lease, dated April 2, 2004.
"SUBSTITUTE GUARANTOR" shall have the meaning set forth in
Section 8.3 hereof.
"SUCCESSOR BORROWER" shall have the meaning set forth in
Section 2.5.3.
"SUPPLEMENTAL GUARANTY" shall mean that certain Supplemental
Guaranty of even date herewith from Guarantor for the benefit of Lender.
"SURVEY" shall mean a current land survey for the
Property, certified to the title company and Lender and its successors and
assigns, in form and content reasonably satisfactory to Lender and prepared by a
professional and properly licensed land surveyor reasonably satisfactory to
Lender in accordance with the 1999 Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys (i) meeting the classification of an "Urban Survey"
and the following additional items from the list of "Optional Survey
Responsibilities and Specifications" (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10, 11 and 13, (ii) reflecting a metes and bounds description
of the real property comprising part of the Property in conformity with the
Title Insurance Policy, and (iii) together with the surveyor's seal affixed to
the Survey and a certification from the surveyor in form and substance
reasonably acceptable to Lender.
"TAX FUNDS" shall have the meaning set forth in Section 6.2.1.
"TAXES" shall mean all real estate and personal
property taxes, assessments, water rates or sewer rents, now or hereafter levied
or assessed or imposed against the Property or part thereof, together with all
interest and penalties thereon.
"TENANT" shall mean any Person obligated by contract
or otherwise to pay monies (including a percentage of gross income, revenue or
profits) under any Lease now or hereafter affecting all or any part of the
Property.
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"TERRORISM CAP" shall have the meaning set forth in Section
5.1.1(a)(x) hereof.
"TITLE INSURANCE POLICY" shall mean an ALTA mortgagee
Title Insurance policy in the form reasonably acceptable to Lender issued with
respect to the Property and insuring the lien of the Mortgage together with such
endorsements and affirmative coverages as Lender may reasonably require.
"TOTAL DEFEASANCE COLLATERAL" shall mean U.S.
Obligations, which provide payments (i) on or prior to, but as close as possible
to, the Business Day immediately preceding all Monthly Payment Dates and other
scheduled payment dates, if any, under the Note after the Total Defeasance Date
and up to and including the Permitted Prepayment Date, and (ii) in amounts equal
to or greater than the Scheduled Total Defeasance Payments relating to such
Monthly Payment Dates and other scheduled payment dates.
"TOTAL DEFEASANCE DATE" shall have the meaning set forth in
Section 2.5.1(a)(i).
"TOTAL DEFEASANCE EVENT" shall have the meaning set forth in
Section 2.5.1(a).
"TRANSFEREE" shall have the meaning set forth in Section
8.1(e)(ii).
"TRUSTEE" shall mean any trustee holding the Loan in a
Securitization.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as in effect in the State.
"UNDEFEASED NOTE" shall have the meaning set forth in Section
2.5.2(a)(iv) hereof.
"UNDERWRITER GROUP" shall have the meaning set forth in
Section 9.2(b).
"UPDATED INFORMATION" shall have the meaning set forth in
Section 9.1(b)(i).
"U.S. OBLIGATIONS" shall mean direct full faith and credit
obligations of the United States of America that are not subject to prepayment,
call or early redemption.
"YIELD MAINTENANCE PREMIUM" shall mean the amount, if any,
which, when added to the remaining principal amount of the Note, will be
sufficient to purchase U.S. Obligations providing the required Scheduled
Defeasance Payments and any other costs and expenses that would be incurred in
defeasing the Loan pursuant to Section 2.5 hereof.
SECTION 1.2 PRINCIPLES OF CONSTRUCTION.
All references to sections and schedules are to sections and
schedules in or to this Agreement unless otherwise specified. Unless otherwise
specified, the words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise specified,
all meanings attributed to defined terms herein shall be equally applicable to
both the singular and plural forms of the terms so defined.
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II. THE LOAN
SECTION 2.1 THE LOAN.
2.1.1 AGREEMENT TO LEND AND BORROW. Subject to and upon the
terms and conditions set forth herein, Lender shall make the Loan to Borrower
and Borrower shall accept the Loan from Lender on the Closing Date.
2.1.2 SINGLE DISBURSEMENT TO BORROWER. Borrower shall receive
only one (1) borrowing hereunder in respect of the Loan and any amount borrowed
and repaid hereunder in respect of the Loan may not be reborrowed.
2.1.3 THE NOTE. The Loan shall be evidenced by that certain
Promissory Note of even date herewith, in the stated principal amount of
Forty-Three Million Five Hundred Thousand and No/100 Dollars ($43,500,000.00)
executed by Borrower and payable to the order of Lender in evidence of the Loan
(as the same may hereafter be amended, supplemented, restated, increased,
extended or consolidated from time to time, the "NOTE") and shall be repaid in
accordance with the terms of this Agreement and the Note.
2.1.4 USE OF PROCEEDS. Borrower shall use proceeds of the Loan
to (a) to acquire the Property, (b) deposit the Reserve Funds, (c) pay costs and
expenses incurred in connection with the closing of the Loan, as approved by
Lender, (d) fund any working capital requirements of the Property, as approved
by Lender and (e) distribute the balance of the proceeds, if any to Borrower.
SECTION 2.2 INTEREST RATE.
2.2.1 INTEREST RATE. Interest on the outstanding principal
balance of the Loan shall accrue from the Closing Date up to and including the
Maturity Date at the Interest Rate.
2.2.2 INTENTIONALLY OMITTED
2.2.3 DEFAULT RATE. In the event that, and for so long as, any
Event of Default shall have occurred and be continuing, the outstanding
principal balance of the Loan and, to the extent permitted by law, overdue
interest in respect of the Loan, shall accrue interest at the Default Rate,
calculated from the date such payment was due without regard to any grace or
cure periods contained herein.
2.2.4 INTEREST CALCULATION. Interest on the outstanding
principal balance of the Loan shall be calculated by multiplying (a) the actual
number of days elapsed in the period for which the calculation is being made by
(b) a daily rate based on a three hundred sixty (360) day year (that is, the
Interest Rate or the Default Rate, as then applicable, expressed as an annual
rate divided by 360) by (c) the outstanding principal balance.
2.2.5 USURY SAVINGS. This Agreement and the other Loan
Documents are subject to the express condition that at no time shall Borrower be
required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the Maximum Legal Rate. If by the terms of this Agreement or the
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other Loan Documents, Borrower is at any time required or obligated to pay
interest on the principal balance due hereunder at a rate in excess of the
Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be,
shall be deemed to be immediately reduced to the Maximum Legal Rate and all
previous payments in excess of the Maximum Legal Rate shall be deemed to have
been payments in reduction of principal and not on account of the interest due
hereunder. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the sums due under the Loan shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate from time to time in effect and applicable to the Loan for so long as
the Loan is outstanding.
SECTION 2.3 LOAN PAYMENTS.
2.3.1 PAYMENT BEFORE MATURITY DATE. Borrower shall make a
payment to Lender of interest only on the Closing Date for the period from the
Closing Date through the last day of the month in which the Closing Date occurs
(unless the Closing Date is the first (1st) day of a calendar month, in which
case no such separate payment of interest shall be due). Borrower shall make a
payment to Lender of interest only in the amount of the Monthly Debt Service
Payment Amount on the Monthly Payment Date occurring in December, 2004 and on
each Monthly Payment Date thereafter to and including the Maturity Date.
2.3.2 INTENTIONALLY OMITTED.
2.3.3 PAYMENT ON MATURITY DATE. Borrower shall pay to Lender
on the Maturity Date the outstanding principal balance of the Loan, all accrued
and unpaid interest and all other amounts due hereunder and under the Note, the
Mortgage and the other Loan Documents.
2.3.4 LATE PAYMENT CHARGE. If any principal, interest or any
other sum due under the Loan Documents, other than the payment of principal due
on the Maturity Date, is not paid by Borrower on or prior to the fifth (5th) day
following the date on which it is due, Borrower shall pay to Lender upon demand
an amount equal to the lesser of (a) five percent (5%) of such unpaid sum or (b)
the maximum amount permitted by applicable law in order to defray the expense
incurred by Lender in handling and processing such delinquent payment and to
compensate Lender for the loss of the use of such delinquent payment. Any such
amount shall be secured by the Mortgage and the other Loan Documents.
2.3.5 METHOD AND PLACE OF PAYMENT.
(a) Except as otherwise provided herein, all payments and
prepayments under this Agreement and the Note shall be made to Lender not later
than 1:00 P.M., New York City time, on the date when due and shall be made in
lawful money of the United States of America in immediately available funds at
Lender's office at 1114 Avenue of the Americas, 29th Floor, New York, New York
10036, or at such other place as Lender may from time to time designate in
writing, and any funds received by Lender after such time shall, for all
purposes hereof, be deemed to have been paid on the next succeeding Business
Day.
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(b) Whenever any payment to be made hereunder or under any
other Loan Document shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be the immediately preceding Business Day, and
such early payment shall in such case not be included in the computation of
interest.
(c) All payments required to be made by Borrower hereunder or
under the Note or the other Loan Documents shall be made irrespective of, and
without deduction for, any setoff, claim or counterclaim and shall be made
irrespective of any defense thereto.
SECTION 2.4 PREPAYMENTS.
2.4.1 VOLUNTARY PREPAYMENTS. Except as otherwise provided
herein, Borrower shall not have the right to prepay the Loan in whole or in
part. On and after May 1, 2011 ("PERMITTED PREPAYMENT DATE"), Borrower may, at
its option and upon thirty (30) days prior notice to Lender, prepay the Debt in
whole, but not in part, on any date without payment of the Yield Maintenance
Premium or any other prepayment premium, but with payment of accrued and unpaid
interest and all other sums owing under the Note, this Agreement and the other
Loan Documents. Any prepayment received by Lender on a date other than a Monthly
Payment Date shall include interest which would have accrued thereon to the next
Monthly Payment Date.
2.4.2 MANDATORY PREPAYMENTS. On each date on which Lender
actually receives a distribution of Net Proceeds, and if Lender does not make
such Net Proceeds available to Borrower for a Restoration, Borrower shall, at
Lender's option, prepay the outstanding principal balance of the Note in an
amount equal to one hundred percent (100%) of such Net Proceeds together with
interest that would have accrued on such amounts through the next Monthly
Payment Date. No Yield Maintenance Premium or any other prepayment premium shall
be due in connection with any prepayment made pursuant to this Section 2.4.2.
Any partial prepayment shall be applied to the payment due at maturity.
2.4.3 PREPAYMENTS AFTER DEFAULT. If after an Event of Default,
but prior to the date when prepayment is permitted under Section 2.4.1, payment
of all or any part of the principal of the Loan is tendered by Borrower (which
tender Lender may reject to the extent permitted under applicable Legal
Requirements), a purchaser at foreclosure or any other Person, such tender shall
be deemed an attempt to circumvent the prohibition against prepayment set forth
in Section 2.4.1 and Borrower, such purchaser at foreclosure or other Person
shall pay a sum equal to the greater of (i) the Yield Maintenance Premium, and
(ii) one percent (1.0%) of the outstanding principal balance of the Loan, in
addition to the outstanding principal balance, all accrued and unpaid interest
and other amounts payable under the Loan Documents.
SECTION 2.5 DEFEASANCE.
2.5.1 TOTAL DEFEASANCE.
(a) Provided no Event of Default shall have occurred and
remain uncured, Borrower shall have the right at any time after the Release Date
to voluntarily defease the entire Loan and obtain a release of the lien of the
Mortgage by providing Lender with the Total Defeasance Collateral (hereinafter,
a "TOTAL DEFEASANCE EVENT"), subject to the satisfaction of the following
conditions precedent:
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(i) Borrower shall provide Lender not less than thirty (30)
days notice (or such shorter period of time if permitted by Lender in
its sole discretion) specifying a date (the "TOTAL DEFEASANCE DATE") on
which the Total Defeasance Event is to occur;
(ii) Borrower shall pay to Lender (A) all payments of interest
due on the Loan to and including the Total Defeasance Date (including,
without limitation, short-term interest, if any) and (B) all other
sums, then due under the Note, this Agreement, the Mortgage and the
other Loan Documents;
(iii) Borrower shall deposit the Total Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the
provisions of Sections 2.5.3 and 2.5.4 hereof;
(iv) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the Total
Defeasance Collateral;
(v) Borrower shall deliver to Lender an opinion of counsel for
Borrower that is standard and commercially reasonable in commercial
lending transactions and subject only to customary qualifications,
assumptions and exceptions opining, among other things, that (A) Lender
has a legal and valid perfected first priority security interest in the
Defeasance Collateral Account and the Total Defeasance Collateral, (B)
if a Securitization has occurred, the REMIC Trust formed pursuant to
such Securitization will not fail to maintain its status as a "real
estate mortgage investment conduit" within the meaning of Section 860D
of the Code as a result of a Total Defeasance Event pursuant to this
Section 2.5, (C) that Borrower has legally and validly transferred and
assigned the Total Defeasance Collateral to the Successor Borrower and
(D) a non-consolidation opinion with respect to the Successor Borrower;
(vi) Borrower shall deliver to Lender a Rating Agency
Confirmation as to the Total Defeasance Event;
(vii) Borrower shall deliver an Officer's Certificate
certifying that the requirements set forth in this Section 2.5 have
been satisfied;
(viii) Borrower shall deliver a certificate of a "big four" or
other nationally recognized public accounting firm reasonably
acceptable to Lender certifying that the Total Defeasance Collateral
will generate monthly amounts equal to or greater than the Scheduled
Total Defeasance Payments;
(ix) Borrower shall deliver such other certificates, opinions,
documents and instruments as Lender may reasonably request; and
(x) Borrower shall pay all costs and expenses of Lender
actually incurred in connection with the Total Defeasance Event,
including Lender's reasonable attorneys' fees and expenses and Rating
Agency fees and expenses. Simultaneously with the notice described in
subparagraph (a)(i) above, Borrower shall deliver to Lender an amount
reasonably determined by Lender to be sufficient to pay such costs and
expenses, which amount may be applied by Lender toward payment of such
costs and expenses if a proposed Total Defeasance Event does not occur,
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provided that if such amount is insufficient to pay such costs and
expenses, Borrower shall remain obligated to pay any deficiency.
(b) If Borrower has elected to defease the Note and the
requirements of this Section 2.5.1 have been satisfied, the Property shall be
released from the lien of the Mortgage and the Total Defeasance Collateral
pledged pursuant to the Security Agreement shall be the sole collateral securing
the Note. In connection with the release of the Lien, Borrower shall submit to
Lender, not less than thirty (30) days prior to the Total Defeasance Date (or
such shorter time as is acceptable to Lender in its sole discretion), a release
of Lien (and related Loan Documents) for execution by Lender. Such release shall
be in a form appropriate in the jurisdiction in which the Property is located
and shall contain standard provisions protecting the rights of the releasing
lender. In addition, Borrower shall provide all other documentation Lender
reasonably requires to be delivered by Borrower in connection with such release,
together with an Officer's Certificate reasonably acceptable to Lender
certifying that such documentation (i) is in material compliance with all Legal
Requirements, and (ii) will effect such release in accordance with the terms of
this Agreement. Borrower shall pay all reasonable costs, taxes and expenses
associated with the release of the lien of the Mortgage, including Lender's
reasonable attorneys' fees. Except as set forth in this Section 2.5.1, no
repayment, prepayment or defeasance of all or any portion of the Note shall
cause, give rise to a right to require, or otherwise result in, the release of
the lien of the Mortgage on the Property. The foregoing release shall be
effective upon the Total Defeasance Date but Lender agrees to provide written
evidence of such release to Borrower promptly following Borrower's request
therefor. 2.5.2 PARTIAL DEFEASANCE. (a) Provided no Event of Default shall have
occurred and remain uncured beyond the expiration of any applicable cure period,
Borrower shall have the right at any time after the Release Date to obtain a
partial release of the Lien of the Mortgage encumbering the Release Parcel
(hereinafter, a "PARTIAL DEFEASANCE EVENT") upon satisfaction of the following
conditions:
(i) Borrower shall provide Lender thirty (30) days prior
written notice (or such shorter period of time if permitted by Lender
in its sole discretion) specifying a Monthly Payment Date (the "PARTIAL
DEFEASANCE DATE") on which Borrower shall have satisfied the conditions
in this Section 2.5.2 and shall effect the defeasance;
(ii) Borrower shall pay to Lender (A) all payments of interest
due and payable on the Loan up to and including the Partial Defeasance
Date and (B) all other sums, then due and payable under the Note, this
Agreement, the Mortgage and the other Loan Documents;
(iii) Borrower shall deposit the Partial Defeasance Collateral
into the Defeasance Collateral Account and otherwise comply with the
provisions of Sections 2.5.3 and 2.5.4 hereof;
(iv) Borrower shall prepare all necessary documents to modify
this Agreement and to amend and restate the Note and issue two
substitute notes, one note having a principal balance equal to 125% of
the Allocated Loan Amount (the "DEFEASED NOTE"), and the other note
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having a principal balance equal to the excess of (A) the outstanding
principal amount of the Loan, over (B) the amount of the Defeased Note
(the "UNDEFEASED NOTE"). The Defeased Note and the Undefeased Note
shall have identical payment terms as the Note except for the principal
balance. The Defeased Note and the Undefeased Note shall be cross
defaulted and cross collateralized unless the Rating Agencies shall
require otherwise or unless a Successor Borrower is established
pursuant to Section 2.5.4. A Defeased Note may not be the subject of
any further defeasance;
(v) Borrower shall execute and deliver to Lender a Security
Agreement in respect of the Defeasance Collateral Account and the
Partial Defeasance Collateral;
(vi) After giving effect to the release of the Lien of the
Mortgage encumbering the Release Parcel, the Debt Service Coverage
Ratio with respect to the remaining portion of the Property is not less
than the greater of (A) the Debt Service Coverage Ratio prior to the
release and (B) Debt Service Coverage Ratio of 1.90x.
(vii) Borrower shall have delivered to Lender and the Rating
Agencies shall have received from Borrower with respect to the matters
referred to in clause (vi), (A) statements of the Net Cash Flow and
Debt Service (both on a consolidated basis and separately for the
applicable portion of the Property to be released) for the applicable
measuring period and (B) based on the foregoing statements of Net Cash
Flow and Debt Service, calculations of the Debt Service Coverage Ratio
both with and without giving effect to the proposed release, and (C)
calculations of the ratios referred to in such clause (vi), accompanied
by an Officer's Certificate stating that such statements, calculations
and information are true, correct and complete in all material
respects;
(viii) Borrower shall deliver to Lender an opinion of counsel
for Borrower that would be reasonably satisfactory to a prudent lender
opining, among other things, that (A) Lender has a legal and valid
perfected first priority security interest in the Defeasance Collateral
Account and the Partial Defeasance Collateral, (B) if a Securitization
has occurred, the REMIC Trust formed pursuant to such Securitization
will not fail to maintain its status as a "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code as a
result of the defeasance pursuant to this Section 2.5.2, (C) that
Borrower has legally and validly transferred and assigned the Total
Defeasance Collateral to the Successor Borrower (D) delivery of the
Partial Defeasance Collateral and the grant of a security interest
therein to Lender shall not constitute an avoidable preference under
Section 547 of the Bankruptcy Code or applicable state law and (E) a
non-consolidation opinion with respect to the Successor Borrower;
(ix) Borrower shall deliver to Lender a Rating Agency
Confirmation as to the Partial Defeasance Event;
(x) Borrower shall deliver a certificate of a "big four" or
other nationally recognized public accounting firm reasonably
acceptable to Lender certifying that the Partial Defeasance Collateral
will generate monthly amounts equal to or greater than the Scheduled
Defeasance Payments;
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(xi) Borrower shall deliver to Lender an Officer's Certificate
certifying that the requirements set forth in this Section 2.5.2(a)
have been satisfied;
(xii) Borrower shall deliver to Lender such other
certificates, documents or instruments as Lender may reasonably
request; and
(xiii) Borrower shall pay all costs and expenses of Lender
actually incurred in connection with the defeasance, including Lender's
reasonable attorneys' fees and expenses.
(b) If Borrower has elected to make a partial defeasance and
the requirements of Section 2.5.2(a) have been satisfied, the Release Parcel
shall be released from the Lien of the Mortgage, upon satisfaction of the
following additional conditions:
(i) on the date Borrower delivers to Lender notice of the
proposed release and on the date of the release, no Event of Default
has occurred which is continuing;
(ii) not less than ten (10) Business Days prior to the date of
the release, Borrower delivers to Lender a notice setting forth (i) the
date of the release, (ii) a metes and bounds description of the Release
Parcel and (iii) a Survey of the Release Parcel;
(iii) Borrower delivers to Lender evidence (together with an
Officer's Certificate certifying to such documentation) which would be
satisfactory to a prudent lender acting reasonably that (A) the Release
Parcel has been, or is about to be (without any further discretionary
or other approvals pending), legally subdivided from the remainder of
the Property; (B) after giving effect to such transfer, each of the
Release Parcel and the balance of the Property conforms to and is in
compliance in all material respects with applicable Legal Requirements
and constitute separate tax lots, and (C) the Release Parcel is not
necessary for the Property to comply with any zoning, building, land
use or parking or other Legal Requirements applicable to the Property
or for the then current use of the Property, including without
limitation for legal access, driveways, parking, utilities or drainage
or, to the extent that the Release Parcel is necessary for any such
purpose, a reciprocal easement agreement or other agreement has been
executed and recorded that would run to the benefit of Borrower, run
with the land and allow the owner of the Property to continue to use
the Release Parcel to the extent necessary for such purpose;
(iv) in the event that the release would reasonably be
expected to materially adversely effect Lender's rights under the Title
Insurance Policy as to any portion of the Property other than as to the
Release Parcel, Borrower shall deliver to Lender an endorsement to the
Title Insurance Policy insuring the Mortgage (A) extending the
effective date of the policy to the effective date of the release; (B)
confirming no change in the priority of the Mortgage on the balance of
the Property (exclusive of the Release Parcel) or in the amount of the
insurance or the coverage of the Property (exclusive of the Release
Parcel) under the policy; and (C) insuring the rights and benefits
under any new or amended reciprocal easement agreement or such other
agreement required pursuant to clause (iii)(C) of this Section that has
been executed and recorded, and the lien of the Mortgage is a first
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lien on Borrower's beneficial interest in such easement, subject to no
exceptions other than Permitted Encumbrances and those approved by
Lender in its reasonable discretion;
(v) Borrower has complied with any requirements applicable to
the release in the Leases, reciprocal easement agreements, operating
agreements, parking agreements or other similar agreements affecting
the Property and the release does not violate any of the provisions of
such documents in any respect that would result in a termination (or
give any other party thereto the right to terminate), extinguishment or
other loss of material rights of Borrower or in a material increase in
Borrower's obligations under such documents and, to the extent
necessary to comply with such documents, the transferee of the Release
Parcel has assumed Borrower's obligations, if any, relating to the
Release Parcel under such documents;
(vi) Borrower shall submit to Lender, not less than five (5)
Business Days prior to the Partial Defeasance Date (or such shorter
time as permitted by Lender in its sole discretion), a release of Lien
(and related Loan Documents) for execution by Lender. Such release
shall be in a form appropriate in the jurisdiction in which the
Property is located and that would be satisfactory to a prudent lender;
(vii) Borrower shall pay all costs, taxes and expenses
actually incurred in connection with the release of the Lien of the
Mortgage, including Lender's reasonable attorneys' fees and reasonable
out-of-pocket expenses;
(viii) Borrower delivers to Lender any other information,
approvals and documents which would be required by a prudent lender
acting reasonably relating to the release; and
(ix) Borrower shall cause, if applicable, title to the Release
Parcel so released from the Lien of the Mortgage to be transferred to
and held by a Person other than Borrower.
(c) Except as set forth in this Section 2.5, no repayment,
prepayment or defeasance of all or any portion of the Note shall cause, give
rise to a right to require, or otherwise result in, the release of any Lien of
any Mortgage on any of the Property.
2.5.3 DEFEASANCE COLLATERAL ACCOUNT. On or before the date on
which Borrower delivers the Defeasance Collateral, Borrower shall open at any
Eligible Institution the defeasance collateral account (the "DEFEASANCE
COLLATERAL ACCOUNT") which shall at all times be an Eligible Account. The
Defeasance Collateral Account shall contain only (a) Defeasance Collateral, and
(b) cash from interest and principal paid on the Defeasance Collateral. All cash
from interest and principal payments paid on the Defeasance Collateral shall be
paid over to Lender on each Monthly Payment Date and applied to accrued and
unpaid interest. Any cash from interest and principal paid on the Defeasance
Collateral not needed to pay the Scheduled Defeasance Payments shall be paid to
Borrower. Borrower shall cause the Eligible Institution at which the Defeasance
Collateral is deposited to enter an agreement with Borrower and Lender,
satisfactory to Lender in its sole discretion, pursuant to which such Eligible
Institution shall agree to hold and distribute the Defeasance Collateral in
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accordance with this Agreement. The Borrower or Successor Borrower, as
applicable, shall be the owner of the Defeasance Collateral Account and shall
report all income accrued on the Defeasance Collateral for federal, state and
local income tax purposes in its income tax return. Borrower or Successor
Borrower shall prepay all cost and expenses associated with opening and
maintaining the Defeasance Collateral Account. Lender shall not in any way be
liable by reason of any insufficiency in the Defeasance Collateral Account.
2.5.4 SUCCESSOR BORROWER. In connection with a Defeasance
Event under this Section 2.5, Borrower shall, if required by the Rating Agencies
or if Borrower elects to do so, establish or designate a successor entity (the
"SUCCESSOR BORROWER") which shall be a single purpose bankruptcy remote entity
and which shall be approved by the Rating Agencies. Any such Successor Borrower
may, at Borrower's option, be an Affiliate of Borrower unless the Rating
Agencies shall require otherwise. Borrower shall transfer and assign all
obligations, rights and duties under and to the Note or the Defeased Note, as
applicable, together with the Defeasance Collateral to such Successor Borrower.
Such Successor Borrower shall assume the obligations under the Note or the
Defeased Note, as applicable, and the Security Agreement and Borrower shall be
relieved of its obligations under such documents. Borrower shall pay a minimum
of One Thousand and No/100 Dollars ($1,000.00) to any such Successor Borrower as
consideration for assuming the obligations under the Note or the Defeased Note,
as applicable, and the Security Agreement. Borrower shall pay all costs and
expenses actually incurred by Lender, including Lender's reasonable attorney's
fees and expenses, actually incurred in connection therewith.
SECTION 2.6 FOREIGN LENDERS.
Any Lender that is not a United States "person" within the
meaning of Section 7701(a)(30) of the Code (a "NON-U.S. LENDER") shall deliver
to Borrower, upon making the Loan or accepting an assignment of the Loan or any
interest therein, two duly completed and signed copies of IRS Form W-8BEN, IRS
Form W-8ECI or IRS Form W-8IMY or any successor form thereto (relating to such
Non-U.S. Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Non-U.S. Lender by Borrower)
or such other evidence satisfactory to Borrower that such Non-U.S. Lender is
entitled to an exemption from, or reduction of, U.S. withholding tax. A Form
W-8BEN completed and delivered by (i) certain foreign trusts, or (ii) persons
claiming an exemption or reduced rate of withholding at source under an income
tax treaty will not be considered duly completed unless the Form W-8BEN contains
such Person's U.S. taxpayer identification number. Thereafter and from time to
time, such Non-U.S. Lender shall (a) upon reasonable requests from Borrower,
submit to Borrower such additional duly completed and signed copies of one of
such forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is
satisfactory to Borrower of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Non-U.S.
Lender, (b) notify Borrower of any change in circumstances which would to
Lender's actual knowledge, modify or render invalid any claimed exemption or
reduction, and (c) upon reasonable requests from Borrower, take such steps as
shall not be materially disadvantageous to it, in the reasonable judgment of
such Non-U.S. Lender, and as may be reasonably necessary to avoid any
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requirements that Borrower make any deduction or withholding for taxes from
amounts payable to such Non-U.S. Lender. If such Non-U.S. Lender fails to
deliver the above forms or other documentation reasonably satisfactory to
Borrower evidencing complete exemption from U.S. federal withholding tax on all
payments by Borrower under the Loan, or if for any reason Borrower is required
by U.S. law to withhold U.S. income tax, then notwithstanding anything to the
contrary in the Loan Documents, Borrower may withhold from any interest payment
to such Non-U.S. Lender an amount equivalent to the applicable withholding tax
imposed by Sections 1441 and 1442 of the Code and deduct such withholding from
such payment.
III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1 BORROWER REPRESENTATIONS.
Borrower represents and warrants that:
3.1.1 ORGANIZATION.
(a) Each of Borrower and each SPC Party is duly organized,
validly existing and in good standing with full power and authority to own the
Property and conduct its business, and is duly qualified in all jurisdictions in
which the ownership or lease of the Property or the conduct of its business
requires such qualification, except where the failure to be so qualified would
not have a Material Adverse Effect on its ability to perform its obligations
hereunder, and Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the other Loan
Documents by it, and has the power and authority to execute, deliver and perform
under this Agreement, the other Loan Documents and all the transactions
contemplated hereby.
(b) Borrower's exact legal name is correctly set forth in the
first paragraph of this Agreement. Borrower is an organization of the type
specified in the first paragraph of this Agreement. Borrower is incorporated or
organized under the laws of the state specified in the first paragraph of this
Agreement. Borrower's principal place of business and chief executive office,
and the place where Borrower keeps its books and records, including recorded
data of any kind or nature, regardless of the medium of recording, including
software, writings, plans, specifications and schematics, has been for the
preceding four (4) months (or, if less than four (4) months, the entire period
of the existence of Borrower) and will continue to be the address of Borrower
set forth in the first paragraph of this Agreement (unless Borrower notifies
Lender in writing at least thirty (30) days prior to the date of such change).
Borrower's organizational identification number, if any, assigned by the state
of its incorporation or organization is 3830201. Borrower's federal tax
identification number is 20-1414039.
3.1.2 PROCEEDINGS. This Agreement and the other Loan Documents
have been duly authorized, executed and delivered by Borrower and constitute a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and by general
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principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3.1.3 NO CONFLICTS. The execution and delivery of this
Agreement and the other Loan Documents by Borrower and the performance of its
obligations hereunder and thereunder will not conflict with any provision of any
law or regulation to which Borrower is subject, or conflict with, result in a
breach of, or constitute a default under, any of the terms, conditions or
provisions of any of Borrower's organizational documents or any agreement or
instrument to which Borrower is a party or by which it is bound, or any order or
decree applicable to Borrower, or result in the creation or imposition of any
lien on any of Borrower's assets or property (other than pursuant to the Loan
Documents).
3.1.4 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to Borrower's knowledge, threatened against Borrower
in any court or by or before any other Governmental Authority that would have a
Material Adverse Effect.
3.1.5 AGREEMENTS. Borrower is not a party to any agreement or
instrument or subject to any restriction which would have a Material Adverse
Effect. Borrower is not in default in any material respect in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument to which it is a party or by which
Borrower or the Property is bound. Borrower has no material financial obligation
under any agreement or instrument to which Borrower is a party or by which
Borrower or the Property is otherwise bound, other than (a) obligations incurred
in the ordinary course of the operation of the Property and (b) obligations
under the Loan Documents.
3.1.6 CONSENTS. No consent, approval, authorization or order
of any court or Governmental Authority is required for the execution, delivery
and performance by Borrower of, or compliance by Borrower with, this Agreement
or the consummation of the transactions contemplated hereby, other than those
which have been obtained by Borrower.
3.1.7 TITLE. Borrower has good, marketable and insurable fee
simple title to the real property comprising part of the Property and good title
to the balance of the Property, free and clear of all Liens whatsoever except
the Permitted Encumbrances. The Mortgage, when properly recorded in the
appropriate records, will create (a) a valid, first priority, perfected lien on
the Property, subject only to Permitted Encumbrances and (b) perfected security
interests in and to, and perfected collateral assignments of, all personalty
(including the Leases), all in accordance with the terms thereof, in each case
subject only to any Permitted Encumbrances. There are no mechanics',
materialman's or other similar liens or claims which have been filed for work,
labor or materials affecting the Property which are or may be liens prior to, or
equal or coordinate with, the lien of the Mortgage. None of the Permitted
Encumbrances, individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Mortgage and this Loan
Agreement, materially and adversely affect the value of the Property, impair the
use or operations of the Property or impair Borrower's ability to pay its
obligations in a timely manner.
3.1.8 NO PLAN ASSETS. As of the date hereof and throughout the
term of the Loan (a) Borrower is not and will not be an "employee benefit plan,"
as defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of
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the assets of Borrower constitutes or will constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101, (c) Borrower
is not and will not be a "governmental plan" within the meaning of Section 3(32)
of ERISA, and (d) transactions by or with Borrower are not and will not be
subject to any state statute regulating investments of, or fiduciary obligations
with respect to, governmental plans.
3.1.9 COMPLIANCE. To the best of Borrower's knowledge,
Borrower and the Property and the use thereof comply in all material respects
with all applicable Legal Requirements, including, without limitation, building
and zoning ordinances and codes. To the best of Borrower's knowledge, Borrower
is not in default or violation of any order, writ, injunction, decree or demand
of any Governmental Authority, the violation of which would have a Material
Adverse Effect. There has not been and shall never be committed by Borrower or
any other person in occupancy of or involved with the operation or use of the
Property any act or omission affording the federal government or any state or
local government the right of forfeiture as against the Property or any part
thereof or any monies paid in performance of Borrower's obligations under any of
the Loan Documents. Borrower hereby covenants and agrees not to commit, permit
or suffer to exist any act or omission affording such right of forfeiture.
3.1.10 FINANCIAL INFORMATION. To the best of Borrower's
knowledge, all financial data, including, without limitation, the statements of
cash flow and income and operating expense, that have been delivered to Lender
in respect of the Property (i) are true, complete and correct in all material
respects, (ii) accurately represent the financial condition of the Property as
of the date of such reports, and (iii) have been prepared in accordance with
GAAP or such other accounting method that may be acceptable to Lender)
throughout the periods covered, except as disclosed therein. Borrower does not
have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Borrower and reasonably likely to have a Material
Adverse Effect. Since the date of the most current financial statements
delivered by Borrower to Lender, there has been no material adverse change in
the financial condition, operations or business of Borrower or, to Borrower's
knowledge, the Property from that set forth in said financial statements.
3.1.11 CONDEMNATION. No Condemnation or other proceeding has
been commenced or, to Borrower's best knowledge, is threatened with respect to
all or any portion of the Property or for the relocation of roadways providing
access to the Property.
3.1.12 UTILITIES AND PUBLIC ACCESS. The Property has rights of
access to public ways and is served by water, sewer, sanitary sewer and storm
drain facilities adequate to service the Property for its intended uses.
3.1.13 SEPARATE LOTS. The Property is comprised of one (1) or
more parcels which constitute separate tax lots and do not constitute a portion
of any other tax lot not a part of the Property.
3.1.14 ASSESSMENTS. To Borrower's knowledge, there are no
pending or proposed special or other assessments for public improvements or
otherwise affecting the Property, nor are there any contemplated improvements to
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the Property that may result in such special or other assessments.
3.1.15 NO DEFENSES. The Loan Documents are not subject to any
right of rescission, set off, counterclaim or defense by Borrower, including the
defense of usury, nor would the operation of any of the terms of the Loan
Documents, or the exercise of any right thereunder, render the Loan Documents
unenforceable, and Borrower has not asserted any right of rescission, set off,
counterclaim or defense with respect thereto.
3.1.16 ASSIGNMENT OF LEASES. The Assignment of Leases creates
a valid assignment of, or a valid security interest in, certain rights under the
Leases, subject only to a license granted to Borrower to exercise certain rights
and to perform certain obligations of the lessor under the Leases, as more
particularly set forth therein. No Person other than Lender has any interest in
or assignment of the Leases or any portion of the Rents due and payable or to
become due and payable thereunder.
3.1.17 INSURANCE. Borrower has obtained and has delivered to
Lender original or certified copies of all of the Policies, with all premiums
prepaid thereunder, reflecting the insurance coverages, amounts and other
requirements set forth in this Agreement. No claims have been made under any of
the Policies, and no Person, including Borrower, has done, by act or omission,
anything which would impair the coverage of any of the Policies.
3.1.18 LICENSES. To the best of Borrower's knowledge, all
permits and approvals, including, without limitation, certificates of occupancy
required by any Governmental Authority for the use, occupancy and operation of
the Property in the manner in which the Property is currently being used,
occupied and operated have been obtained and are in full force and effect.
3.1.19 FLOOD ZONE. Except as disclosed on the Survey, none of
the Improvements on the Property is located in an area identified by the Federal
Emergency Management Agency as a special flood hazard area.
3.1.20 PHYSICAL CONDITION. Except as set forth in any property
condition or engineering report delivered to and reviewed by Lender in
connection with the Loan, and, to Borrower's knowledge, the Property, including,
without limitation, all buildings, improvements, parking facilities, sidewalks,
storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors,
landscaping, irrigation systems and all structural components, are in good
condition, order and repair in all material respects; except as set forth in any
property condition or engineering report delivered to and reviewed by lender in
connection with the Loan, and, to Borrower's knowledge, there exists no
structural or other material defects or damages in the Property, whether latent
or otherwise, and Borrower has not received notice from any insurance company or
bonding company of any defects or inadequacies in the Property, or any part
thereof, which would adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or
threatened termination of any policy of insurance or bond.
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3.1.21 BOUNDARIES. Except as set forth in the Survey and in
Lender's Title Insurance policy, all of the improvements which were included in
determining the appraised value of the Property lie wholly within the boundaries
and building restriction lines of the Property, and no improvements on adjoining
properties encroach upon the Property, and no easements or other encumbrances
affecting the Property encroach upon any of the improvements, so as to affect
the value or marketability of the Property except those which are insured
against by Title Insurance each of which, whether or not insured are shown on
the Survey.
3.1.22 LEASES. Borrower represents and warrants to Lender with
respect to the Leases that: (a) the rent roll attached hereto as Schedule I is
true, complete and correct and the Property is not subject to any Leases other
than the Leases described in Schedule I, (b) the Leases identified on Schedule I
are in full force and effect and there are no defaults thereunder by either
party except as otherwise set forth in an estoppel certificate executed by the
applicable Tenant delivered to Lender prior to the date hereof, (c) the copies
of the Leases delivered to Lender are true and complete in all material
respects, and there are no oral agreements with respect thereto except as
otherwise set forth in an estoppel certificate executed by the applicable Tenant
delivered to Lender prior to the date hereof, (d) no Rent (including security
deposits) has been paid more than one (1) month in advance of its due date
except as otherwise set forth in an estoppel certificate executed by the
applicable Tenant delivered to Lender prior to the date hereof, (e) all work to
be performed by Borrower under each Lease has been performed as required and has
been accepted by the applicable Tenant except as otherwise set forth in an
estoppel certificate executed by the applicable Tenant delivered to Lender prior
to the date hereof, (f) any payments, free rent, partial rent, rebate of rent or
other payments, credits, allowances or abatements required to be given by
Borrower to any Tenant has already been received by such Tenant except as
otherwise set forth in an estoppel certificate executed by the applicable Tenant
delivered to Lender prior to the date hereof, (g) all security deposits are
being held in accordance with Legal Requirements, (h) neither the landlord nor
any Tenant is in default under any of the Leases except as otherwise set forth
in an estoppel certificate executed by the applicable Tenant delivered to Lender
prior to the date hereof; (i) Borrower has no knowledge of any notice of
termination or default with respect to any Lease; (j) Borrower has not assigned
or pledged any of the Leases, the rents or any interests therein except to
Lender; (k) no Tenant or other party has an option or right of first refusal or
offer, to purchase all or any portion of the Property (other than the Stop and
Shop Lease, which right of first refusal has been waived by Stop and Shop
pursuant to that certain Notice of Waiver of Right of First Refusal dated
October 28, 2004); (l) no Tenant has the right to terminate its Lease prior to
expiration of the stated term of such Lease; and (m) all existing Leases are
subordinate to the Mortgage either pursuant to their terms or a recordable
subordination agreement delivered concurrently herewith, or delivered hereafter
as approved by Lender.
3.1.23 FILING AND RECORDING TAXES. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid under applicable Legal Requirements in connection with the
transfer of the Property to Borrower have been paid or are being paid
simultaneously herewith. All mortgage, mortgage recording, stamp, intangible or
other similar tax required to be paid under applicable Legal Requirements in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement of any of the Loan Documents, including, without
limitation, the Mortgage, have been paid or are being paid simultaneously
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herewith. All taxes and governmental assessments due and owing in respect of the
Property have been paid, or an escrow of funds in an amount sufficient to cover
such payments has been established hereunder.
3.1.24 SINGLE PURPOSE. Borrower hereby represents and warrants
to, and covenants with, Lender that as of the date hereof and until such time as
the Debt shall be paid in full, Borrower has not at any time, does not
presently, and shall not:
(a) own any asset or property other than (i) the Property, and
(ii) incidental personal property necessary for the ownership or operation of
the Property;
(b) engage in any business other than the ownership,
management and operation of the Property or fail to conduct and operate its
business as presently conducted and operated;
(c) enter into any contract or agreement with any Affiliate of
Borrower, any constituent party of Borrower or any Affiliate of any constituent
party, except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length basis
with third parties other than any such party;
(d) incur any Indebtedness other than (i) the Debt, (ii)
unsecured trade payables and operational debt not evidenced by a note and in an
aggregate amount not exceeding $1,000,000.00 at any one time, and (iii)
Indebtedness incurred in the financing of equipment and other personal property
used on the Property with annual payments not exceeding $500,000.00 in the
aggregate; provided that any Indebtedness incurred pursuant to subclauses (ii)
and (iii) shall be (x) paid within sixty (60) days of the date incurred and (y)
incurred in the ordinary course of business. No Indebtedness other than the Debt
may be secured (subordinate or pari passu) by the Property;
(e) make any loans or advances to any third party (including
any Affiliate or constituent party), or acquire obligations or securities of its
Affiliates;
(f) fail to remain solvent or fail to pay its debts and
liabilities (including, as applicable, shared personnel and overhead expenses)
from its assets as the same shall become due;
(g) fail to do all things necessary to observe organizational
formalities and preserve its existence, and Borrower will not, nor will Borrower
permit any constituent party to amend, modify or otherwise change the
partnership certificate, partnership agreement, articles of incorporation and
bylaws, operating agreement, trust or other organizational documents of Borrower
or such constituent party without the reasonable prior consent of Lender in any
manner that (i) violates the covenants set forth in this Section 3.1.24, or (ii)
amends, modifies or otherwise changes any provision thereof that by its terms
cannot be modified at any time when the Loan is outstanding or by its terms
cannot be modified without Lender's consent;
(h) fail to maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates and any
constituent party. Borrower's assets will not be listed as assets on the
financial statement of any other Person, provided, however, that Borrower's
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assets may be included in a consolidated financial statement of its Affiliates
provided that (i) appropriate notation shall be made on such consolidated
financial statements to indicate the separateness of Borrower and such
Affiliates and to indicate that Borrower's assets and credit are not available
to satisfy the debts and other obligations of such Affiliates or any other
Person and (ii) such assets shall be listed on Borrower's own separate balance
sheet. Borrower will file its own tax returns (to the extent Borrower is
required to file any such tax returns) and will not file a consolidated federal
income tax return with any Person other than Cedar Shopping Centers Inc.
Borrower shall maintain its books, records, resolutions and agreements as
official records;
(i) fail to be, or fail to hold itself out to the public as, a
legal entity separate and distinct from any other entity (including any
Affiliate of Borrower or any constituent party of Borrower), fail to correct any
known misunderstanding regarding its status as a separate entity, fail to
conduct business in its own name, or fail to maintain and utilize separate
stationery, invoices and checks bearing its own name, and Borrower shall not
identify itself or any of its Affiliates as a division or part of the other;
(j) intentionally omitted;
(k) seek or effect the liquidation, dissolution, winding up,
liquidation, consolidation or merger, in whole or in part, of Borrower nor
permit any constituent party of Borrower to do any of the foregoing;
(l) commingle the funds and other assets of Borrower with
those of any Affiliate or constituent party or any other Person, and will hold
all of its assets in its own name;
(m) fail to maintain its assets in such a manner that it will
not be costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or constituent party or any other Person;
(n) guarantee or become obligated for the debts of any other
Person or hold itself out to be responsible for or have its credit available to
satisfy the debts or obligations of any other Person;
(o) (i) If Borrower is a limited partnership or a limited
liability company (other than a single member limited liability company), fail
to cause each general partner or managing member (each, an "SPC PARTY") to be a
corporation whose sole asset is its interest in Borrower and each such SPC Party
will at all times comply, and will cause Borrower to comply, with each of the
representations, warranties, and covenants contained in this Section 3.1.24 as
if such representation, warranty or covenant was made directly by such SPC
Party. Upon the withdrawal or the disassociation of an SPC Party from Borrower,
Borrower shall immediately appoint a new SPC Party whose articles of
incorporation are substantially similar to those of such SPC Party and deliver a
new non-consolidation opinion to the Rating Agency or Rating Agencies, as
applicable, with respect to the new SPC Party and its equity owners;
(ii) If Borrower is a single member limited liability company,
fail to have at least two (2) springing members, one of which, upon the
dissolution of such sole member or the withdrawal or the disassociation
of the sole member from Borrower, shall immediately become the sole
member of Borrower, and the other of which shall become the sole member
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of Borrower if the first such springing member no longer is available
to serve as such sole member.
(p) fail to cause there to be one duly appointed member of the
board of directors who are provided by a nationally recognized company that
provides professional independent directors (each, an "INDEPENDENT DIRECTOR") of
Borrower reasonably satisfactory to Lender who shall not have been at the time
of such individual's appointment or at any time while serving as a director of
Borrower, and may not have been at any time during the preceding five years (i)
a stockholder, director (other than as an Independent Director), officer,
employee, partner, attorney or counsel of Borrower or any Affiliate of either of
them, (ii) a customer, supplier or other Person who derives any of its purchases
or revenues from its activities with Borrower or any Affiliate (other than
payment for services as an Independent Director), (iii) a Person or other entity
controlling or under common control with any such stockholder, partner,
customer, supplier or other Person, or (iv) a member of the immediate family of
any such stockholder, director, officer, employee, partner, customer, supplier
or other Person. (For purposes of this subclause (p), the term "Affiliate" means
any person controlling, under common control with, or controlled by the person
in question; and the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of management,
policies or activities of a person or entity, whether through ownership of
voting securities, by contract or otherwise.) A natural person who satisfies the
foregoing definition other than subparagraph (ii) shall not be disqualified from
serving as an Independent Director if such individual is an independent director
provided by a nationally-recognized company that provides professional
independent directors and that also provides other corporate services in the
ordinary course of its business. A natural person who otherwise satisfies the
foregoing definition except for being the independent director of a "special
purpose entity" affiliated with the borrower that does not own a direct or
indirect equity interest in the borrower or any co-borrower shall not be
disqualified from serving as an Independent Director of the SPC Party if such
individual is at the time of initial appointment, or at any time while serving
as a Independent Director of the SPC Party, an Independent Director of a
"special purpose entity" affiliated with the Borrower or the SPC Party (other
than any entity that owns a direct or indirect equity interest in borrower or
any co-borrower) if such individual is an independent director provided by a
nationally-recognized company that provides professional independent directors.
For purposes of this paragraph, a "special purpose entity" is an entity, whose
organizational documents contain restrictions on its activities substantially
similar to those set forth in the SPC Party's organizational documents.
(q) cause or permit the board of directors of Borrower to take
any action which, under the terms of any certificate of incorporation, by laws
or any voting trust agreement with respect to any common stock or under any
organizational document of Borrower, requires a vote of the board of directors
of each SPC Party and Borrower unless at the time of such action there shall be
at least one (1) member who is an Independent Director.
(r) intentionally omitted.
(s) permit any Affiliate or constituent party independent
access to its bank accounts.
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(t) fail to pay the salaries of its own employees (if any)
from its own funds or fail to maintain a sufficient number of employees (if any)
in light of its contemplated business operations.
(u) fail to compensate each of its consultants and agents from
its funds for services provided to it and pay from its own assets all
obligations of any kind incurred.
3.1.25 TAX FILINGS. To the extent required, Borrower has filed
(or has obtained effective extensions for filing) all federal, state and local
tax returns required to be filed and have paid or made adequate provision for
the payment of all federal, state and local taxes, charges and assessments
payable by Borrower. Borrower believes that its tax returns (if any) properly
reflect the income and taxes of Borrower for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.
3.1.26 SOLVENCY. Borrower (a) has not entered into the
transaction or any Loan Document with the actual intent to hinder, delay, or
defraud any creditor and (b) received reasonably equivalent value in exchange
for its obligations under the Loan Documents. Giving effect to the Loan, the
fair saleable value of Borrower's assets exceeds and will, immediately following
the making of the Loan, exceed Borrower's total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities. The
fair saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its debts as such debts
become absolute and matured. Borrower's assets do not and, immediately following
the making of the Loan will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Indebtedness and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Indebtedness and liabilities as they mature (taking into account the
timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower).
3.1.27 FEDERAL RESERVE REGULATIONS. No part of the proceeds of
the Loan will be used for the purpose of purchasing or acquiring any "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System or for any other purpose which would be inconsistent with
such Regulation U or any other Regulations of such Board of Governors, or for
any purposes prohibited by Legal Requirements or by the terms and conditions of
this Agreement or the other Loan Documents.
3.1.28 ORGANIZATIONAL CHART. The organizational chart attached
as Schedule III hereto, relating to Borrower and certain Affiliates and other
parties, is true, complete and correct on and as of the date hereof.
3.1.29 INVESTMENT COMPANY ACT. Borrower is not (a) an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended; (b) a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
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subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
3.1.30 ACCESS/UTILITIES. Except as disclosed in the Survey,
all public utilities necessary to the continued use and enjoyment of the
Property as presently used and enjoyed are located in the public right-of-way
abutting the Property. All roads necessary for the full utilization of the
Property for its current purpose have been completed and dedicated to public use
and accepted by all governmental authorities or are the subject of access
easements for the benefit of the Property.
3.1.31 NO BANKRUPTCY FILING. Borrower is not contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of its assets or property, and Borrower does
not have any knowledge of any Person contemplating the filing of any such
petition against it.
3.1.32 FULL AND ACCURATE DISCLOSURE. To the best of Borrower's
knowledge, no information contained in this Agreement, the other Loan Documents,
or any written statement furnished by or on behalf of Borrower pursuant to the
terms of this Agreement contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. There is no fact or circumstance presently known to Borrower which has not
been disclosed to Lender and which will have a Material Adverse Effect.
3.1.33 FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
3.1.34 NO CHANGE IN FACTS OR CIRCUMSTANCES; DISCLOSURE. To the
best of Borrower's knowledge, there has been no material adverse change in any
condition, fact, circumstance or event that would make the financial statements,
rent rolls, reports, certificates or other documents submitted in connection
with the Loan inaccurate, incomplete or otherwise misleading in any material
respect or that otherwise materially and adversely affects the business
operations or the financial condition of Borrower or the Property.
3.1.35 PERFECTION OF ACCOUNTS. Borrower hereby represents and
warrants to Lender that:
(a) This Agreement, together with the other Loan Documents,
create a valid and continuing security interest (as defined in the Uniform
Commercial Code) in the Accounts (as defined in the Cash Management Agreement)
in favor of Lender, which security interest is prior to all other Liens, and is
enforceable as such against creditors of and purchasers from Borrower. Other
than in connection with the Loan Documents, Borrower has not sold or otherwise
conveyed the Accounts;
(b) The Accounts constitute "deposit accounts" or "securities
accounts" within the meaning of the Uniform Commercial Code, as set forth in the
Cash Management Agreement;
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(c) Pursuant to the Cash Management Agreement, Agent has
agreed to comply with all instructions originated by Lender, without further
consent by Borrower, directing disposition of the Accounts and all sums at any
time held, deposited or invested therein, together with any interest or other
earnings thereon, and all proceeds thereof (including proceeds of sales and
other dispositions), whether accounts, general intangibles, chattel paper,
deposit accounts, instruments, documents or securities; and
(d) The Accounts are not in the name of any Person other than
Borrower, as pledgor, or Lender, as pledgee. Borrower has not consented to
Agent's complying with instructions with respect to the Accounts from any Person
other than Lender.
3.1.36 INTENTIONALLY OMITTED.
3.1.37 INTENTIONALLY OMITTED.
3.1.38 PATRIOT ACT.
(a) None of Borrower, any of its constituents or Affiliates,
and to the best of Borrower's knowledge, any of its brokers or other agents
acting or benefiting in any capacity in connection with the Loan is a Prohibited
Person.
(b) None of Borrower, any of its constituents or Affiliates,
or, to Borrower's knowledge, any of its brokers or other agents acting in any
capacity in connection with the Loan, (i) has conducted or will conduct any
business or has engaged or will engage in any transaction or dealing with any
Prohibited Person, including making or receiving any contribution of funds,
goods or services to or for the benefit of any Prohibited Person, (ii) has dealt
or will deal in, or otherwise has engaged or will engage in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Order; or (iii) has engaged or will engage in or has conspired or will
conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in the Executive Order or the Patriot Act.
(c) Borrower covenants and agrees to deliver to Lender any
certification or other evidence requested from time to time by Lender in its
reasonable discretion, confirming Borrower's compliance with this Section
3.1.38.
SECTION 3.2 SURVIVAL OF REPRESENTATIONS.
The representations and warranties set forth in Section 3.1
shall survive for so long as any amount remains payable to Lender under this
Agreement or any of the other Loan Documents.
IV. BORROWER COVENANTS
SECTION 4.1 BORROWER AFFIRMATIVE COVENANTS.
Borrower hereby covenants and agrees with Lender that:
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4.1.1 EXISTENCE; COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence, rights, licenses, permits and franchises
and comply with all Legal Requirements applicable to it and the Property.
4.1.2 TAXES AND OTHER CHARGES. Except as otherwise provided
herein, Borrower shall pay all Taxes and Other Charges now or hereafter levied
or assessed or imposed against the Property or any part thereof as the same
become due and payable; provided, however, Borrower's obligation to directly pay
Taxes shall be suspended for so long as Borrower complies with the terms and
provisions of Section 6.2 hereof. Borrower shall furnish to Lender receipts for
the payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent; provided, however, that Borrower is not required to furnish
such receipts for payment of Taxes in the event that such Taxes have been paid
by Lender pursuant to Section 6.2 hereof. Borrower shall not permit or suffer
and shall promptly discharge any lien or charge against the Property. After
prior notice to Lender, Borrower, at its own expense, may contest by appropriate
legal proceeding, conducted in good faith and with due diligence, the amount or
validity of any Taxes or Other Charges, provided that (a) no Default or Event of
Default has occurred and remains uncured; (b) such proceeding shall be permitted
under and be conducted in accordance with all applicable statutes, laws and
ordinances; (c) neither the Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, canceled or lost; (d)
Borrower shall promptly upon final determination thereof pay the amount of any
such Taxes or Other Charges, together with all costs, interest and penalties
which may be payable in connection therewith; (e) such proceeding shall suspend
the collection of Taxes or Other Charges from the Property; (f) Borrower shall
deposit with Lender cash, or other security as may be reasonably approved by
Lender, in an amount equal to one hundred twenty-five percent (125%) of the
contested amount, to insure the payment of any such Taxes or Other Charges,
together with all interest and penalties thereon; and (g) such contest by
Borrower is not in violation of Leases or Operating Agreements. Lender may pay
over any such cash or other security held by Lender to the claimant entitled
thereto at any time when, in the judgment of Lender, the entitlement of such
claimant is established.
4.1.3 LITIGATION. Borrower shall give prompt notice to Lender
of any litigation or governmental proceedings pending or, upon discovery by
Borrower, threatened against Borrower which if adversely determined would have a
Material Adverse Effect.
4.1.4 ACCESS TO PROPERTY. Borrower shall permit agents,
representatives and employees of Lender to inspect the Property or any part
thereof at reasonable hours upon reasonable advance notice, provided that such
inspection is conducted in a manner that minimizes interference with Tenants and
the operation of the Property.
4.1.5 INTENTIONALLY OMITTED.
4.1.6 FINANCIAL REPORTING.
(a) GAAP. Borrower shall keep and maintain or shall cause to
be kept and maintained, consistent with GAAP (or any other accounting basis that
is reasonably acceptable to Lender) proper and accurate books, records and
accounts reflecting all of the financial affairs of Borrower and all items of
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income and expense in connection with the operation on an individual basis of
the Property. All financial statements delivered to Lender consistent with this
Section 4.1.6 shall be prepared consistent with GAAP in the United States of
America as in effect on the date so indicated and consistently applied.
(b) Monthly Reports. Prior to a Securitization, within thirty
(30) days after the end of each calendar month, if requested by Lender Borrower,
shall furnish to Lender a current (as of the calendar month just ended) balance
sheet, a detailed operating statement (showing monthly activity and year to
date) stating gross income from operations, operating expenses, for the calendar
month just ended, a rent roll for the subject month and, as requested by Lender,
any other documentation supporting the information disclosed in the most recent
financial statements. In addition, such statement shall also be accompanied by
(i) a calculation reflecting the Debt Service Coverage Ratio as of the last day
of such month for such month and (ii) a certificate of an officer of Borrower or
the general partner of Borrower stating that the representations and warranties
of Borrower set forth in Section 3.1.24 are true and correct as of the date of
such certificate and that there are no trade payables outstanding for more than
sixty (60) days.
(c) Quarterly Reports. Within forty five (45) days after the
end of each calendar quarter, Borrower shall furnish to Lender a detailed
operating statement (showing quarterly activity and year to date) stating gross
income and operating expenses for the calendar quarter just ended and a balance
sheet (which also reports capital expenditures) for such quarter for Borrower.
Borrower's quarterly statements shall be accompanied by (i) a current rent roll
for the Property and (ii) a summary report for the most recently completed
calendar year of aggregate sales by tenants under Leases of the Property, to the
extent such information is provided by Tenants and/or required under the their
Leases, and (iii) a certificate executed by an officer of Borrower or the
general partner of Borrower stating that each such quarterly statement presents
fairly the financial condition and the results of operations of the Borrower and
the Property and has been prepared consistent with general accepted accounting
principles.
(d) Annual Reports. Within seventy five (75) days after the
end of each calendar year of Borrower's operation of the Property, Borrower will
furnish to Lender a complete copy of Borrower's annual financial statements
prepared by Borrower (or, if required by Lender, audited by Ernst & Young LLP or
other firm of independent certified public accountants acceptable to Lender),
consistent with GAAP for such calendar year which financial statements shall
contain a balance sheet, a detailed operating statement stating gross income,
operating expenses for each of Borrower and the Property. Borrower's annual
financial statements shall be accompanied by (i) a certificate executed by an
officer of Borrower or the managing member of Borrower stating that each such
annual financial statement presents fairly the financial condition and the
results of operations of Borrower and the Property and has been prepared
consistent with general accepted accounting principles, and (ii) if required by
Lender, an unqualified opinion of Ernst & Young LLP or other firm of independent
certified public accountants acceptable to Lender (notwithstanding the
foregoing, Borrower's financial statements may be consolidated with its
Affiliates, provided that Borrower also provides appropriate schedules to report
the amounts applicable to the Borrower and the Property).
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(e) Certification; Supporting Documentation. Each such
financial statement shall be in scope and detail reasonably satisfactory to
Lender and certified by an officer of Borrower.
(f) Additional Reports. Borrower shall deliver to Lender as
soon as reasonably available but in no event later than thirty (30) days after
such items become available to Borrower in final form:
(i) copies of any final engineering or environmental reports
prepared for Borrower with respect to the Property;
(ii) a copy of any notice received by Borrower from any
environmental authority having jurisdiction over the Property with
respect to a violation of any environmental law applicable to the
Property other than the Exxon Remediation;
(iii) a summary report containing each of the following with
respect to the Property for the most recently completed calendar year:
(A) aggregate sales by Tenants under Leases or other occupants of the
Property (only to the extent such information is provided by Tenants,
and/or required under Leases) and on a comparable store basis), (B)
rent per square foot payable by each tenant and (C) aggregate occupancy
of the Property by anchor space and in-line store space as of December
31; and
(iv) if requested by Lender, a summary report listing only
Tenants and square footage occupied by such Tenants.
(g) Access. Lender shall have the right from time to time upon
reasonable prior written notice to Borrower, at all times during normal business
hours to examine such books, records and accounts at the office of Borrower or
other Person maintaining such books, records and accounts and to make such
copies or extracts thereof as Lender shall reasonably desire. After the
occurrence of an Event of Default, Borrower shall pay any costs and expenses
incurred by Lender to examine Borrower's records with respect to the Property,
as Lender shall determine to be reasonably necessary or appropriate in the
protection of Lender's interest.
(h) Format of Delivery. Any reports, statements or other
information required to be delivered under this Agreement shall be delivered (i)
in paper form, (ii) on a diskette, and (iii) if requested by Lender and within
the capabilities of Borrower's data systems without change or modification
thereto, in electronic form reasonably acceptable to Lender.
(i) Annual Budget. Borrower shall submit the Annual Budget to
Lender not later than twenty (20) days prior to the commencement of each Fiscal
Year.
(j) Other Required Information. Borrower shall furnish to
Lender, within five (5) Business Days after request (or as soon thereafter as
may be reasonably possible), such further detailed information with respect to
the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Lender, provided that Borrower has such information
available.
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4.1.7 TITLE TO THE PROPERTY. Borrower will warrant and defend
the validity and priority of the Liens of the Mortgage and the Assignment of
Leases on the Property against the claims of all Persons whomsoever, subject
only to Permitted Encumbrances.
4.1.8 ESTOPPEL STATEMENT.
(a) After request by Lender (not more than one (1) time in any
calendar year provided no Event of Default exists), Borrower shall within ten
(10) Business Days furnish Lender with a statement, duly acknowledged and
certified, stating (i) the unpaid principal amount of the Note, (ii) the
Interest Rate of the Note, (iii) the date installments of interest were last
paid, (iv) any offsets or defenses to the payment of the Debt, if any, and (v)
that this Agreement and the other Loan Documents have not been modified or if
modified, giving particulars of such modification.
(b) Borrower shall endeavor to deliver to Lender, within
forty-five (45) days after request, an estoppel certificate from each Tenant
under any Lease (provided that Borrower shall only be required to use
commercially reasonable efforts to obtain an estoppel certificate from any
Tenant not required to provide an estoppel certificate under its Lease);
provided that such certificate shall be in the form required under such Lease;
provided further that Borrower shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year.
4.1.9 LEASES.
(a) All Leases and other rental arrangements shall in all
material respects be approved by Lender and shall be on a standard Lease form
previously approved by Lender with no modifications (except as approved by
Lender). Such Lease form shall provide that (i) the Lease is subordinate to the
Mortgage, (ii) the tenant shall attorn to Lender, and (iii) that any
cancellation, surrender, or amendment of such Lease without the prior written
consent of Lender shall be voidable by Lender. Borrower shall hold, in trust,
all tenant security deposits in a segregated account, and, to the extent
required by applicable law, shall not commingle any such funds with any other
funds of Borrower. Within ten (10) days after Lender's request, Borrower shall
furnish to Lender a statement of all tenant security deposits, and copies of all
Leases not previously delivered to Lender, certified by Borrower as being true
and correct in all material respects. Notwithstanding anything contained in the
Loan Documents, Lender's approval shall not be required for future Leases, Lease
modifications, or Lease extensions if the following conditions are satisfied:
(A) no Event of Default has occurred and is continuing; (B) the Lease is on the
standard Lease form approved by Lender with no modifications except for
commercially reasonable modifications agreed to in the ordinary course of
Borrower's business, but in no event shall there be any material modifications
to the subordination, attornment, estoppel and landlord liability clauses of
such Lease without the prior written consent of Lender, which consent shall not
be unreasonably withheld, conditioned or delayed; (C) the Lease does not violate
any restrictive covenant affecting the Property or any other Lease for space in
the Property; (D) the Lease is not a Major Lease; (E) the Lease shall provide
for rental rates and landlord concessions comparable to existing local market
rates and shall be an arms length transaction and in no event be with an
Affiliate of Borrower; (F) the Lease shall be to a tenant which Borrower, in its
professional and commercially reasonably judgment, has determined is
creditworthy; and (G) the Lease is for a term of not more than ten (10) years
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(exclusive of renewal options, which together with the initial lease term shall
not exceed fifteen (15) years). Lender shall execute and deliver a Subordination
Non-Disturbance and Attornment Agreement in the form annexed hereto as Schedule
IV to Tenants under future Major Lease approved by Lender promptly upon request
with such commercially reasonable changes as may be requested by Tenants, from
time to time, and which are reasonably acceptable to Lender.
(b) Borrower (i) shall perform the obligations which Borrower
is required to perform under the Leases; (ii) shall enforce the obligations to
be performed by the tenants; (iii) shall promptly furnish to Lender any notice
of default or termination received by Borrower from any tenant, and any notice
of default or termination given by Borrower to any tenant; (iv) shall not
collect any rents for more than thirty (30) days in advance of the time when the
same shall become due, except for bona fide security deposits not in excess of
an amount equal to two months rent; (v) shall not enter into any ground Lease or
master Lease of any part of the Property; (vi) shall not further assign or
encumber any Lease; (vii) shall not, except with Lender's prior written consent,
cancel or accept surrender or termination of any Lease, except as expressly set
forth in Section 4.1.9(c) hereof, and (viii) any Lease termination or
cancellation fees shall be paid to Lender and held in the Rollover Fund. Any
action in violation of clauses (v), (vi), (vii), and (viii) of this Section
4.1.9(b) shall be void at the election of Lender.
(c) Notwithstanding anything to the contrary contained herein,
Borrower shall have the right to terminate any Lease which is not a Major Lease,
provided such termination is (i) commercially reasonable, (ii) made in
accordance with Borrower's reasonable business judgment, and (iii) the Lease so
terminated is replaced with a Lease which otherwise complies with the
requirements set forth in this Section 4.1.9.
(d) Notwithstanding anything to the contrary contained in this
Section 4.1.9, whenever Lender's approval or consent is required pursuant to the
provisions of this Section 4.1.9 for any matter that Lender has not previously
approved, Lender shall respond within ten (10) Business Days after Lender's
receipt of Borrower's written request for such approval or consent. If Lender
fails to respond to such request within five (5) Business Days, and Borrower
sends a second request containing a legend in bold letters stating that Lender's
failure to respond within five (5) Business Days shall be deemed consent or
approval, Lender shall be deemed to have approved or consented to the matter for
which Lender's consent or approval was sought if Lender fails to respond to such
second written request before the expiration of such second five (5) Business
Days period.
4.1.10 ALTERATIONS. Lender's prior approval shall be required
in connection with any alterations to any Improvements (except tenant
improvements under any Lease approved by Lender or under any Lease for which
approval was not required by Lender under this Agreement) (a) adversely
affecting structural components of the Property, utilities, HVAC or the exterior
of the building, (b) that may have a Material Adverse Effect or (c) the cost of
which (including any related alteration, improvement or replacement) is
reasonably anticipated to exceed the Alteration Threshold, which approval may be
granted or withheld in Lender's reasonable discretion. If the total unpaid
amounts incurred and to be incurred with respect to such alterations to the
Improvements shall at any time exceed the Alteration Threshold, Borrower shall
promptly deliver to Lender as security for the payment of such amounts and as
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additional security for Borrower's obligations under the Loan Documents any of
the following selected by Borrower: (i) cash, (ii) Letters of Credit, (iii) U.S.
Obligations, (iv) other securities reasonably acceptable to Lender, provided
that Lender shall have received a Rating Agency Confirmation as to the form and
issuer of same, or (v) a completion bond, provided that Lender shall have
received a Rating Agency Confirmation as to the form and issuer of same. Such
security shall be in an amount equal to the excess of the total unpaid amounts
incurred and to be incurred with respect to such alterations to the Improvements
(other than such amounts to be paid or reimbursed by Tenants under the Leases)
over the Alteration Threshold.
4.1.11 INTENTIONALLY OMITTED.
4.1.12 MATERIAL AGREEMENTS. Borrower shall (a) promptly
perform and/or observe all of the material covenants and agreements required to
be performed and observed by it under each Material Agreement and Operating
Agreement to which it is a party, and do all things necessary to preserve and to
keep unimpaired its rights thereunder, (b) promptly notify Lender in writing of
the giving of any notice of any default by any party under any Material
Agreement and Operating Agreement of which it is aware which has a Material
Adverse Effect on Borrower or the Property and (c) promptly enforce the
performance and observance of all of the material covenants and agreements
required to be performed and/or observed by the other party under each Material
Agreement and Operating Agreement to which it is a party in a commercially
reasonable manner.
4.1.13 PERFORMANCE BY BORROWER. Borrower shall in a timely
manner observe, perform and fulfill each and every covenant, term and provision
of each Loan Document executed and delivered by Borrower, and shall not enter
into or otherwise suffer or permit any amendment, waiver, supplement,
termination or other modification of any Loan Document executed and delivered by
Borrower without the prior consent of Lender.
4.1.14 INTENTIONALLY OMITTED.
4.1.15 BUSINESS AND OPERATIONS. Borrower will continue to
engage in the businesses currently conducted by it as and to the extent the same
are necessary for the ownership and leasing of the Property. Borrower will
qualify to do business and will remain in good standing under the laws of each
jurisdiction as and to the extent the same are required for the ownership and
leasing of the related Property. Borrower shall at all times cause the Property
to be maintained as a commercial retail shopping center.
4.1.16 LOAN FEES. Borrower shall pay all fees and costs
(including, without limitation, all origination and commitment fees) required of
Borrower pursuant to the terms of that certain term sheet between Cedar
Shoppings Center Partnership, L.P. and Lender dated September 30, 2004.
4.1.17 INTENTIONALLY OMITTED.
4.1.18 HANDICAPPED ACCESS.
(a) Borrower covenants and agrees that the Property shall at
all times comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all
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state and local laws and ordinances related to handicapped access and all rules,
regulations, and orders issued pursuant thereto including, without limitation,
the Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively, "ACCESS LAWS").
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Lender's approval of alterations of the Property,
Borrower shall not alter the Property in any manner which would materially
increase Borrower's responsibilities for compliance with the applicable Access
Laws without the prior written approval of Lender. The foregoing shall apply to
tenant improvements constructed by Borrower or by any of its tenants. Lender may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person acceptable to Lender.
(c) Borrower covenants and agrees to give prompt notice to
Lender of the receipt by Borrower of any complaints related to violation of any
Access Laws and of the commencement of any proceedings or investigations which
relate to compliance with applicable Access Laws.
4.1.19 INTENTIONALLY OMITTED.
4.1.20 NOTICE OF CERTAIN EVENTS. Borrower shall promptly
notify Lender of (a) any Event of Default, together with a detailed statement of
the steps being taken to cure such Default or Event of Default; (b) any notice
of default received by Borrower under other obligations relating to the Property
or otherwise material to Borrower's business which, if determined adversely,
would have a Material Adverse effect on Borrower or the Property; and (c) any
threatened or pending legal, judicial or regulatory proceedings, including any
dispute between Borrower and any Governmental Authority, affecting Borrower or
the Property.
4.1.21 FURTHER ASSURANCES. Borrower shall, at Borrower's sole
cost and expense, promptly (a) cure any defects in the execution and delivery of
the Loan Documents, (b) execute and deliver, or cause to be executed and
delivered, all such other documents, agreements and instruments as Lender may
reasonably request to further evidence and more fully describe the collateral
for the Loan, to correct any omissions in the Loan Documents, to perfect,
protect or preserve any Liens created under any of the Loan Documents, or to
make any recordings, file any notices, or obtain any consents, as may be
necessary or appropriate in connection therewith provided such documents do not
increase Borrower's monetary obligations or decrease Borrower's rights hereunder
and (c) do all such further lawful and reasonable acts, conveyances and
assurances for the better and more effectively carrying out of the intents and
purposes of this Agreement and the other Loan Documents as Lender shall
reasonably require from time to time, provided such documents do not increase
Borrower's monetary obligations or decrease Borrower's rights hereunder. Upon
the occurrence and during the continuation of an Event of Default, Borrower
grants Lender an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Lender under the Loan Documents, at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to Sections
10.2, 10.3, and 10.4.
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4.1.22 TAXES ON SECURITY. Borrower shall pay all taxes,
charges, filing, registration and recording fees, excises and levies payable
with respect to the Note or the Liens created or secured by the Loan Documents,
other than income, franchise and doing business taxes imposed on Lender. If
there shall be enacted any law (a) deducting the Loan from the value of the
Property for the purpose of taxation, (b) affecting any Lien on the Property, or
(c) changing existing laws of taxation of mortgages, deeds of trust, security
deeds, or debts secured by real property, or changing the manner of collecting
any such taxes, Borrower shall promptly pay to Lender, on demand, all taxes,
costs and charges, other than income, franchise or doing business taxes, for
which Lender is or may be liable as a result thereof; however, if such payment
would be prohibited by law or would render the Loan usurious, then instead of
collecting such payment, Lender may declare all amounts owing under the Loan
Documents to be immediately due and payable without any prepayment penalty or
fee.
4.1.23 STOP AND SHOP ESTOPPEL. On or before May 5, 2006,
Borrower shall deliver evidence that Stop and Shop has commenced paying the
unabated annual fixed rent set forth in the Stop and Shop Third Lease Amendment.
If Borrower fails to comply with the provisions of this Section 4.1.23, then
Borrower shall deliver the Additional Collateral to Lender to be held by Lender
as additional security for the Loan to be deposited in an Account and maintained
by Lender pursuant to the Cash Management Agreement. At the request of Lender,
Borrower shall agree to reasonable amendments to the Cash Management Agreement
to reflect that the deposit of the Additional Collateral and provide any and all
other documentation reasonably required to perfect Lender's security interest in
the Additional Collateral. Any and all income earned on the Additional
Collateral shall inure to the benefit of Borrower.
SECTION 4.2 BORROWER NEGATIVE COVENANTS.
Borrower covenants and agrees with Lender that:
4.2.1 LIENS. Subject to Borrower's right to contest in
accordance with the express terms set forth in this Agreement, Borrower shall
not create, incur, assume or suffer to exist any Lien on any portion of the
Property except for Permitted Encumbrances.
4.2.2 DISSOLUTION. Except as expressly set forth in this
Agreement, Borrower shall not (a) engage in any dissolution, liquidation or
consolidation or merger with or into any other business entity, (b) transfer,
lease or sell, in one transaction or any combination of transactions, all or
substantially all of the property or assets of Borrower except to the extent
expressly permitted by the Loan Documents, or (c) cause, permit or suffer any
SPC Party to (i) dissolve, wind up or liquidate or take any action, or omit to
take an action, as a result of which such SPC Party would be dissolved, wound up
or liquidated in whole or in part, or (ii) amend, modify, waive or terminate the
certificate of incorporation or bylaws of such SPC Party, in each case without
obtaining the prior consent of Lender.
4.2.3 DEBT CANCELLATION. Borrower shall not cancel or
otherwise forgive or release any claim or debt (other than termination of Leases
in accordance herewith) owed to Borrower by any Person, except for adequate
consideration and in the ordinary course of Borrower's business.
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4.2.4 ZONING. Borrower shall not initiate or consent to any
zoning reclassification of any portion of the Property or seek any variance
under any existing zoning ordinance or use or permit the use of any portion of
the Property in any manner that could result in such use becoming a non
conforming use under any zoning ordinance or any other applicable land use law,
rule or regulation, without the prior written consent of Lender, which shall not
be unreasonably withheld, conditioned or delayed.
4.2.5 NO JOINT ASSESSMENT. Borrower shall not suffer, permit
or initiate the joint assessment of the Property (a) with any other real
property constituting a tax lot separate from the Property, and (b) with any
portion of the Property which may be deemed to constitute personal property, or
any other procedure whereby the lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.
4.2.6 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change
its principal place of business from the address set forth on the first page of
this Agreement without first giving Lender thirty (30) days prior notice.
4.2.7 ERISA.
(a) Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Agreement or the other Loan
Documents) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or Section 4975 of the Code.
(b) Borrower shall deliver to Lender such certifications or
other evidence from time to time throughout the term of the Loan, as requested
by Lender in its sole discretion, that (i) Borrower is not an "employee benefit
plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
or a "plan" subject to Section 4975 of the Code, or a "governmental plan" within
the meaning of Section 3(32) of ERISA; (ii) Borrower is not subject to any state
statute regulating investments of, or fiduciary obligations with respect to,
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. ss.2510.3-101(b)(2);
(B) Less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower is held by "benefit plan investors" within
the meaning of 29 C.F.R. ss.2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. ss.2510.3-101(c) or
(e).
4.2.8 MATERIAL AGREEMENTS. Borrower shall not, without
Lender's reasonable consent: (a) enter into, surrender or terminate any Material
Agreement or Operating Agreement to which it is a party (unless the other party
thereto is in material default and the termination of such agreement would be
commercially reasonable), (b) increase or consent to the increase of the amount
of any charges under any Material Agreement or Operating Agreement to which it
is a party, except as provided therein or on an arms-length basis and
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commercially reasonable terms; or (c) otherwise modify, change, supplement,
alter or amend, or waive or release any of its rights and remedies under any
Material Agreement or Operating Agreement to which it is a party in any material
respect, except on an arms'-length basis and commercially reasonable terms.
4.2.9 INTENTIONALLY DELETED.
4.2.10 INTENTIONALLY OMITTED.
V. INSURANCE, CASUALTY AND CONDEMNATION
SECTION 5.1 INSURANCE.
5.1.1 INSURANCE POLICIES.
(a) Borrower shall obtain and maintain, or cause to be
maintained, insurance for Borrower and the Property providing at least the
following coverages:
(i) comprehensive all risk insurance on the Improvements and
the personal property at the Property (A) in an amount equal to one
hundred percent (100%) of the "Full Replacement Cost," which for
purposes of this Agreement shall mean actual replacement value
(exclusive of costs of excavations, foundations, underground utilities
and footings) with a waiver of depreciation, but the amount shall in no
event be less than the outstanding principal balance of the Loan; (B)
containing an agreed amount endorsement with respect to the
Improvements and personal property at the Property waiving all
co-insurance provisions; (C) providing for no deductible in excess of
Twenty Five Thousand and No/100 Dollars ($25,000.00) for all such
insurance coverage; and (D) containing an "Ordinance or Law Coverage"
or "Enforcement" endorsement if any of the Improvements or the use of
the Property shall at any time constitute legal non-conforming
structures or uses. In addition, Borrower shall obtain: (y) if any
portion of the Improvements is currently or at any time in the future
located in a federally designated "special flood hazard area," flood
hazard insurance in an amount equal to the lesser of (1) the
outstanding principal balance of the Note or (2) the maximum amount of
such insurance available under the National Flood Insurance Act of
1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended or such greater
amount as Lender shall require; and (z) earthquake insurance in amounts
and in form and substance satisfactory to Lender in the event the
Property is located in an area with a high degree of seismic activity,
provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance
policy required under this subsection (i).
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring
upon, in or about the Property, such insurance (A) to be on the
so-called "occurrence" form with an occurrence limit of not less than
One Million and No/100 Dollars ($1,000,000.00) and an aggregate limit
of not less than Two Million and No/100 Dollars ($2,000,000.00); (B) to
continue at not less than the aforesaid limit until required to be
changed by Lender by reason of changed economic conditions making such
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protection inadequate; and (C) to cover at least the following hazards:
(1) premises and operations; (2) products and completed operations on
an "if any" basis; (3) independent contractors; (4) blanket contractual
liability for all legal contracts; and (5) contractual liability
covering the indemnities contained in Article 9 of the Mortgage to the
extent the same is available;
(iii) business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above for a period commencing at the
time of loss for such length of time as it takes to repair or replace
with the exercise of due diligence and dispatch; (C) containing an
extended period of indemnity endorsement which provides that after the
physical loss to the Improvements and Personal Property has been
repaired, the continued loss of income will be insured until such
income either returns to the same level it was at prior to the loss, or
the expiration of twelve (12) months from the date that the Property is
repaired or replaced and operations are resumed, whichever first
occurs, and notwithstanding that the policy may expire prior to the end
of such period; and (D) in an amount equal to one hundred percent
(100%) of the projected gross income from the Property for a period
from the date of loss to a date (assuming total destruction) which is
six (6) months from the date that the Property is repaired or replaced
and operations are resumed. The amount of such business income
insurance shall be determined prior to the date hereof and at least
once each year thereafter based on Borrower's reasonable estimate of
the gross income from the Property for the succeeding twelve (12) month
period. Subject to Section 5.3.2 hereof, all proceeds payable to Lender
pursuant to this subsection shall be held by Lender and shall be
applied to the obligations secured by the Loan Documents from time to
time due and payable hereunder and under the Note; provided, however,
that nothing herein contained shall be deemed to relieve Borrower of
its obligations to pay the obligations secured by the Loan Documents on
the respective dates of payment provided for in the Note and the other
Loan Documents except to the extent such amounts are actually paid out
of the proceeds of such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements,
and only if the Property coverage form does not otherwise apply, (A)
owner's contingent or protective liability insurance covering claims
not covered by or under the terms or provisions of the above mentioned
commercial general liability insurance policy; and (B) the insurance
provided for in subsection (i) above written in a so-called builder's
risk completed value form (1) on a non-reporting basis, (2) against all
risks insured against pursuant to subsection (i) above, (3) including
permission to occupy the Property, and (4) with an agreed amount
endorsement waiving co-insurance provisions;
(v) workers' compensation, subject to the statutory limits of
the state in which the Property is located, and employer's liability
insurance with a limit of at least One Million and No/100 Dollars
($1,000,000.00) per accident and per disease per employee, and One
Million and No/100 Dollars ($1,000,000.00) for disease aggregate in
respect of any work or operations on or about the Property, or in
connection with the Property or its operation (if applicable);
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(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on
terms consistent with the commercial property insurance policy required
under subsection (i) above;
(vii) umbrella liability insurance in addition to primary
coverage in an amount not less than $10,000,000.00.00 per occurrence on
terms consistent with the commercial general liability insurance policy
required under subsection (ii) above and (viii) below;
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing
minimum limits per occurrence of One Million and No/100 Dollars
($1,000,000.00);
(ix) so-called "dramshop" insurance or other liability
insurance required in connection with the sale of alcoholic beverages,
if served at the Property, and;
(x) If the commercial property and business income insurance
policies required under subsections (i) and (iii) above do not cover
perils of terrorism or acts of terrorism, Borrower shall maintain
commercial property and business income insurance for loss resulting
from perils and acts of terrorism on terms (including amounts)
consistent with those required under subsections (i) and (iii) above;
notwithstanding the foregoing, Borrower shall be required to obtain and
maintain terrorism insurance in an amount not less than the amount of
terrorism insurance that is available for an annual premium equal to
two (2) times Borrower's then current premium for the "all-risk"
insurance required under subsection (i) above (such limitation shall be
referred to as the "TERRORISM CAP") for terrorism insurance that is at
least equivalent to the existing terrorism insurance required under
this Section 5.1.1(a)(x); provided, however, the Terrorism Cap shall
not apply if (A) owners and/or operators of office buildings in the
same class as the Property in Massachusetts are generally obtaining
terrorism insurance, (B) lenders financing such office buildings in the
same class as the Property in Massachusetts are generally requiring
terrorism insurance as a condition of financing, or (C) Borrower
Principal or any Affiliates of Borrower Principal or any transferee of
Borrower Principal or any of its Affiliates, is obtaining terrorism
insurance on any other properties in Massachusetts which any of the
foregoing Persons own or operate. The claims paying ability rating of
the insurer shall be consistent with the requirements of Section 5.1.2
hereof or, if no insurer of such claims paying ability rating is then
issuing such terrorism insurance, the chosen insurer shall be the
insurer which is offering such terrorism insurance and which has a
claims paying ability rating the closest to that required by Section
5.1.2 hereof.
If perils of terrorism and acts of terrorism or other similar acts or
events are hereafter excluded from Borrower's comprehensive all risk
insurance policy or business income insurance coverage required under
subsections (i) and (iii) above, Borrower shall obtain an endorsement
to such policy, or a separate policy from an insurance provider which
meets the requirements set forth in Section 5.1.2 below or is otherwise
satisfactory to Lender, insuring against all such excluded acts or
events in the amounts required for such coverage under subsections (i)
and (iii) above, or such lesser amount as may be approved by Lender in
its sole discretion. The endorsement or policy shall be in form and
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substance reasonably satisfactory to Lender and shall meet Rating
Agency criteria for securitized loans.
(xi) upon sixty (60) days' notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time
may reasonably request against such other insurable hazards which at
the time are commonly insured against for property similar to the
Property located in or around the region in which the Property is
located.
(b) All insurance provided for in Section 5.1.1(a) shall be
obtained under valid and enforceable policies (collectively, the "POLICIES" or,
in the singular, the "POLICY") and, to the extent not specified above, shall be
subject to the approval of Lender as to deductibles, loss payees and insureds.
Not less than fifteen (15) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums then due thereunder (the "INSURANCE PREMIUMS"), shall be delivered by
Borrower to Lender.
(c) Any blanket insurance Policy shall specifically allocate
to the Property the amount of coverage from time to time required hereunder and
shall otherwise provide the same protection as would a separate Policy insuring
only the Property in compliance with the provisions of Section 5.1.1(a).
(d) All Policies of insurance provided for or contemplated by
Section 5.1.1(a) shall be primary coverage and, except for the Policy referenced
in Section 5.1.1(a)(v), shall name Borrower as the insured and Lender and its
successors and/or assigns as the additional insured, as its interests may
appear, and in the case of property damage, boiler and machinery, flood,
earthquake and terrorism insurance, shall contain a so-called New York standard
non contributing mortgagee clause in favor of Lender providing that the loss
thereunder shall be payable to Lender. Borrower shall not procure or permit any
of its constituent entities to procure any other insurance coverage which would
be on the same level of payment as the Policies or would adversely impact in any
way the ability of Lender or Borrower to collect any proceeds under any of the
Policies.
(e) All Policies of insurance provided for in Section
5.1.1(a), except for the Policies referenced in Sections 5.1.1(a)(v) and
(a)(viii), shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any Tenant or other occupant, or failure to comply with
the provisions of any Policy, which might otherwise result in a
forfeiture of the insurance or any part thereof, shall in any way
affect the validity or enforceability of the insurance insofar as
Lender is concerned;
(ii) the Policy shall not be canceled or permitted to lapse
without at least thirty (30) days' written notice to Lender and any
other party named therein as an additional insured and, shall not be
materially changed (other than to increase the coverage provided
thereby) without such a thirty (30) day notice; and
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(iii) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full force and effect,
Lender shall have the right, without notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, the obtaining of such insurance coverage as Lender in its
sole discretion deems appropriate and all premiums incurred by Lender in
connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and until paid shall be
secured by the Mortgage and shall bear interest at the Default Rate.
(g) In the event of foreclosure of the Mortgage or other
transfer of title to the Property in extinguishment in whole or in part of the
Debt, all right, title and interest of Borrower in and to the Policies that are
not blanket Policies then in force concerning the Property and all proceeds
payable thereunder shall upon transfer of title to the Property vest in the
purchaser at such foreclosure or Lender or other transferee in the event of such
other transfer of title. 5.1.2 INSURANCE COMPANY. All Policies, excluding "flood
hazard" and "earthquake" Policies provided for in Section 5.1.1(a)(i) hereof,
shall be issued by financially sound and responsible insurance companies
authorized to do business in the state in which the Property is located and
having a claims paying ability rating of "A" or better by S&P and the equivalent
rating by one of the other Rating Agencies.
SECTION 5.2 CASUALTY AND CONDEMNATION.
5.2.1 CASUALTY. If the Property shall sustain a Casualty,
Borrower shall give prompt notice of such Casualty to Lender and shall promptly
commence and diligently prosecute to completion the repair and restoration of
the Property as nearly as possible to the condition the Property was in
immediately prior to such Casualty (a "RESTORATION") and otherwise in accordance
with Section 5.3, it being understood, however, that Borrower shall not be
obligated to restore the Property to the precise condition of the Property prior
to such Casualty provided the Property is restored, to the extent practicable,
to be of at least equal value and of substantially the same character as prior
to the Casualty. Borrower shall pay all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated to,
make proof of loss if not made promptly by Borrower. In the event of a Casualty
where the loss does not exceed the Restoration Threshold, Borrower may settle
and adjust such claim; provided that (a) no Event of Default has occurred and is
continuing and (b) such adjustment is carried out in a commercially reasonable
and timely manner. In the event of a Casualty where the loss exceeds the
Restoration Threshold or if an Event of Default then exists, Borrower may settle
and adjust such claim only with the prior written consent of Lender (which
consent shall not be unreasonably withheld or delayed) and Lender shall have the
opportunity to participate, at Borrower's cost, in any such adjustments.
Notwithstanding any Casualty, Borrower shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and in this
Agreement.
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5.2.2 CONDEMNATION. Borrower shall give Lender prompt notice
of any actual or threatened Condemnation by any Governmental Authority of all or
any part of the Property and shall deliver to Lender a copy of any and all
papers served in connection with such proceedings. Borrower may settle and
compromise the Condemnation only with prior written the consent of Lender (which
consent shall not be unreasonably withheld or delayed) and Lender shall have the
opportunity to participate, at Borrower's cost, in any litigation and settlement
discussions in respect thereof and Borrower shall from time to time deliver to
Lender all instruments requested by Lender to permit such participation.
Borrower shall, at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and cooperate with them in
the carrying on or defense of any such proceedings following an Event of Default
that remains uncured. Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any Award and to make any compromise or settlement in
connection with any such Condemnation. Notwithstanding any Condemnation,
Borrower shall continue to pay the Debt at the time and in the manner provided
for its payment in the Note and in this Agreement. Lender shall not be limited
to the interest paid on the Award by any Governmental Authority but shall be
entitled to receive out of the Award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by any
Governmental Authority, Borrower shall promptly commence and diligently
prosecute the Restoration of the Property and otherwise comply with the
provisions of Section 5.3. If the Property is sold, through foreclosure or
otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought,
recovered or denied, to receive the Award, or a portion thereof sufficient to
pay the Debt.
5.2.3 CASUALTY PROCEEDS. Notwithstanding the last sentence of
Section 5.1.1(a)(iii) and provided no Event of Default then exists hereunder,
proceeds received by Lender on account of the business interruption insurance
specified in Section 5.1.1(a)(iii) above with respect to any Casualty shall be
deposited by Lender directly into the Lockbox Account (as defined in the Cash
Management Agreement) but (a) only to the extent it reflects a replacement for
lost Rents that would have been due under Leases existing on the date of such
Casualty, and (b) only to the extent necessary to fully make the disbursements
required by Sections 3.3(a)(i) through (vi) of the Cash Management Agreement.
All other such proceeds shall be held by Lender and disbursed in accordance with
Section 5.3 hereof.
SECTION 5.3 DELIVERY OF NET PROCEEDS.
5.3.1 MINOR CASUALTY OR CONDEMNATION. If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds shall be less
than the Restoration Threshold and the costs of completing the Restoration shall
be less than the Restoration Threshold, and provided (a) no Event of Default
shall have occurred and remain uncured and (b) the Casualty or Condemnation
shall have occurred prior to the Maturity Date, the Net Proceeds will be
promptly disbursed by Lender to Borrower. Promptly after receipt of the Net
Proceeds, Borrower shall commence and satisfactorily complete with due diligence
the Restoration in accordance with the terms of this Agreement. If any Net
Proceeds are received by Borrower and may be retained by Borrower pursuant to
the terms hereof, such Net Proceeds shall, until completion of the Restoration,
be held in trust for Lender and shall be segregated from other funds of Borrower
to be used to pay for the cost of Restoration in accordance with the terms
hereof.
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5.3.2 MAJOR CASUALTY OR CONDEMNATION.(a) If a Casualty or
Condemnation has occurred to the Property and the Net Proceeds are equal to or
greater than the Restoration Threshold or the costs of completing the
Restoration is equal to or greater than the Restoration Threshold, Lender shall
make the Net Proceeds available for the Restoration, provided that each of the
following conditions are met:
(i) no Event of Default shall have occurred and be continuing;
(ii) (A) in the event the Net Proceeds are insurance proceeds,
less than thirty-five percent (35%) of the total floor area of the
Improvements at the Property has been damaged, destroyed or rendered
unusable as a result of such Casualty or (B) in the event the Net
Proceeds are an Award, less than fifteen percent (15%) of the land
constituting the Property is taken, and such land is located along the
perimeter or periphery of the Property, and no portion of the
Improvements is the subject of the Condemnation;
(iii) Leases requiring payment of annual rent equal to
sixty-five percent (65%) of the Gross Income from Operations received
by Borrower during the twelve (12) month period immediately preceding
the Casualty or Condemnation and all Major Leases shall remain in full
force and effect during and after the completion of the Restoration
without abatement of rent beyond the time required for Restoration,
notwithstanding the occurrence of such Casualty or Condemnation;
(iv) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than sixty (60) days
after such Casualty or Condemnation, whichever the case may be, occurs)
and shall diligently pursue the same to satisfactory completion;
(v) Lender shall be satisfied that any operating deficits and
all payments of interest under the Note will be paid during the period
required for Restoration from (A) the Net Proceeds, or (B) other funds
of Borrower;
(vi) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (A) the date six (6)
months prior to the Maturity Date, (B) the earliest date required for
such completion under the terms of any Major Lease, (C) such time as
may be required under applicable Legal Requirements in order to repair
and restore the Property to the condition it was in immediately prior
to such Casualty or to as nearly as possible the condition it was in
immediately prior to such Condemnation, as applicable or (D) the
expiration of the insurance coverage referred to in Section
5.1.1(a)(iii);
(vii) the Property and the use thereof after the Restoration
will be in compliance with and permitted under all applicable Legal
Requirements;
(viii) the Restoration shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all
applicable Legal Requirements;
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(ix) such Casualty or Condemnation, as applicable, does not
result in the loss of legal access to the Property or the related
Improvements;
(x) all Operating Agreements shall remain in full force and
effect; and
(xi) After giving effect to such Restoration, the Debt Service
Coverage Ratio for the Property shall be equal to the greater of (i)
the Debt Service Coverage Ratio for the twelve (12) full calendar
months immediately preceding the Closing Date, and (ii) the Debt
Service Coverage Ratio for the Property for the twelve (12) full
calendar months immediately preceding the Casualty or Condemnation of
the Property.
(b) The Net Proceeds shall be paid directly to Lender and held
by Lender in an interest-bearing account, which interest shall accrue for
Borrower's benefit, and, until disbursed in accordance with the provisions of
this Section 5.3.2, shall constitute additional security for the Debt. The Net
Proceeds (including all interest earned thereon) shall be disbursed by Lender
to, or as directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence reasonably satisfactory to Lender that (i)
all requirements set forth in Section 5.3.2(a) have been satisfied, (ii) all
materials installed and work and labor performed (except to the extent that they
are to be paid for out of the requested disbursement) in connection with the
Restoration have been paid for in full, and (iii) there exist no notices of
pendency, stop orders, mechanic's or materialman's liens or notices of intention
to file same, or any other liens or encumbrances of any nature whatsoever on the
Property arising out of the Restoration which have not either been fully bonded
to the satisfaction of Lender and discharged of record or in the alternative
fully insured to the satisfaction of Lender by the title company issuing the
Title Insurance Policy.
(c) All plans and specifications required in connection with
the Restoration shall be subject to prior reasonable approval of Lender and an
independent architect reasonably selected by Lender (the "CASUALTY CONSULTANT").
The plans and specifications shall require that the Restoration be completed in
a first-class workmanlike manner at least equivalent to the quality and
character of the original work in the Improvements (provided, however, that in
the case of a partial Condemnation, the Restoration shall be done to the extent
reasonably practicable after taking into account the consequences of such
partial Condemnation), so that upon completion thereof, the Property shall be at
least equal in value and general utility to the Property prior to the damage or
destruction; it being understood, however, that Borrower shall not be obligated
to restore the Property to the precise condition of the Property prior to such
Casualty provided the Property is restored, to the extent practicable, to be of
at least equal value and of substantially the same character as prior to the
Casualty. Borrower shall restore all Improvements such that when they are fully
restored and/or repaired, such Improvements and their contemplated use fully
comply with all applicable material Legal Requirements. The identity of the
contractors, subcontractors and materialmen engaged in the Restoration, as well
as the contracts under which they have been engaged, shall be subject to
reasonable approval by Lender and the Casualty Consultant. All costs and
expenses incurred by Lender in connection with recovering, holding and advancing
the Net Proceeds for the Restoration including, without limitation, reasonable
attorneys' fees and disbursements and the Casualty Consultant's fees and
disbursements, shall be paid by Borrower.
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(d) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, less the Casualty
Retainage. The term "CASUALTY RETAINAGE" shall mean, as to each contractor,
subcontractor or materialman engaged in the Restoration, an amount equal to ten
percent (10%) of the costs actually incurred for work in place as part of the
Restoration, as certified by the Casualty Consultant, until the Restoration has
been completed. The Casualty Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Section 5.3.2(d), be less than
the amount actually held back by Borrower from contractors, subcontractors and
materialmen engaged in the Restoration. The Casualty Retainage shall not be
released until the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this Section 5.3.2(d)
and that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate Governmental Authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty Retainage;
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, the contractor, subcontractor or materialman delivers
the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company issuing the Title Insurance Policy, and Lender
receives an endorsement to the Title Insurance Policy insuring the continued
priority of the lien of the Mortgage and evidence of payment of any premium
payable for such endorsement. If required by Lender, the release of any such
portion of the Casualty Retainage shall be approved by the surety company, if
any, which has issued a payment or performance bond with respect to the
contractor, subcontractor or materialman.
(e) Lender shall not be obligated to make disbursements of the
Net Proceeds more frequently than once every calendar month.
(f) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection with the
completion of the Restoration, Borrower shall deposit the deficiency (the "NET
PROCEEDS DEFICIENCY") with Lender before any further disbursement of the Net
Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender shall
be held by Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed pursuant to this
Section 5.3.2 shall constitute additional security for the Debt.
(g) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender after the
Casualty Consultant certifies to Lender that the Restoration has been completed
in accordance with the provisions of this Section 5.3.2, and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under any of the Loan Documents; provided, however, the amount of
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such excess returned to Borrower in the case of a Condemnation shall not exceed
the amount of Net Proceeds Deficiency deposited by Borrower with the balance
being applied to the Debt in the manner provided for in subsection 5.3.2(h).
(h) All Net Proceeds not required (i) to be made available for
the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 5.3.2(g) may be retained and applied by Lender toward the
payment of the Debt, whether or not then due and payable, in such order,
priority and proportions as Lender in its sole discretion shall deem proper, or,
at the discretion of Lender, the same may be paid, either in whole or in part,
to Borrower for such purposes as Lender shall designate, without prepayment
premium or other penalty.
VI. RESERVE FUNDS
SECTION 6.1 REQUIRED REPAIR FUNDS.
6.1.1 DEPOSIT OF REQUIRED REPAIR FUNDS. Borrower shall perform
the repairs at the Property as set forth on Schedule II hereto (such repairs
hereinafter referred to as "REQUIRED REPAIRS") and shall complete each of the
Required Repairs on or before the respective deadline for each repair as set
forth on Schedule II. On the Closing Date, Borrower shall deposit with Lender
the amount that is one hundred and twenty-five percent (125%) of the cost to
perform such Required Repairs as set forth on Schedule II hereto to perform the
Required Repairs. Amounts deposited pursuant to this Section 6.1.1 are referred
to herein as the "REQUIRED REPAIR FUNDS."
6.1.2 RELEASE OF REQUIRED REPAIR FUNDS. With respect to any
item of Required Repairs which has been completed, Lender shall disburse, or
cause to be disbursed, to Borrower the Required Repair Funds upon satisfaction
by Borrower of each of the following conditions: (a) Borrower shall submit a
request for payment to Lender at least ten (10) days prior to the date on which
Borrower requests such payment be made and specifies the Required Repairs to be
paid, (b) on the date such request is received by Lender and on the date such
payment is to be made, no Event of Default shall exist and remain uncured, (c)
Lender shall have received a certificate from Borrower (i) stating that all
Required Repairs to be funded by the requested disbursement have been completed
in a good and workmanlike manner and in accordance with all applicable Legal
Requirements, such certificate to be accompanied by a copy of any license,
permit or other approval by any Governmental Authority, if any, required in
connection with the Required Repairs, (ii) identifying each Person that supplied
materials or labor in connection with the Required Repairs to be funded by the
requested disbursement, and (iii) stating that each such Person has been paid in
full or will be paid in full upon such disbursement, such certificate to be
accompanied by lien waivers or other evidence of payment satisfactory to Lender,
(d) at Lender's option, a title search for the Property indicating that the
Property is free from all liens, claims and other encumbrances not previously
approved by Lender, (e) at Lender's option, if the cost of the Required Repairs
exceeds Twenty-Five Thousand and No/100 Dollars ($25,000.00), Lender shall have
received a report satisfactory to Lender in its reasonable discretion from an
architect or engineer approved by Lender in respect of such architect or
engineer's inspection of the required repairs, and (f) Lender shall have
received such other evidence as Lender shall reasonably request that the
Required Repairs to be funded by the requested disbursement have been completed
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and are paid for or will be paid upon such disbursement to Borrower. Lender
shall not be required to disburse Required Repair Funds more frequently than
once each calendar month, and the requested disbursement must be at least in an
amount equal to the Minimum Disbursement Amount (or a lesser amount if the total
Required Repair Funds is less than the Minimum Disbursement Amount, in which
case only one disbursement of the amount remaining in the account shall be
made). Lender shall have the right, but not the obligation, to make any of the
Required Repairs in the event Borrower fails to perform same in accordance with
Section 6.1.1.
SECTION 6.2 TAX FUNDS.
6.2.1 DEPOSITS OF TAX FUNDS. On the Closing Date, Borrower
shall deposit with Lender the amount of Twenty Nine Thousand Eight Hundred Forty
Five and 90/100 Dollars ($29,845.90) and there shall be deposited to the
appropriate Accounts on each Monthly Payment Date an amount equal to one-twelfth
of the Taxes that Lender estimates will be payable during the next ensuing
twelve (12) months in order to accumulate sufficient funds to pay all such Taxes
at least ten (10) days prior to their respective due dates. Amounts deposited
pursuant to this Section 6.2.1 are referred to herein as the "TAX FUNDS." If at
any time Lender reasonably determines that the Tax Funds will not be sufficient
to pay the Taxes, Lender shall notify Borrower of such determination and the
monthly deposits for Taxes shall be increased by the amount that Lender
estimates is sufficient to make up the deficiency at least ten (10) days prior
to the respective delinquent dates for the Taxes; provided that if Borrower
receives notice of any deficiency after the date that is ten (10) days prior to
the date that Taxes are due, Borrower will deposit such amount within two (2)
Business Days after its receipt of such notice.
6.2.2 RELEASE OF TAX FUNDS. Unless an Event of Default has
occurred and is continuing, Lender shall apply the Tax Funds to payments of
Taxes. In making any payment relating to Taxes, Lender may do so according to
any bill, statement or estimate procured from the appropriate public office
(with respect to Taxes) without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof. If the amount of the Tax Funds
shall exceed the amounts due for Taxes, Lender shall, in its sole discretion,
return any excess to Borrower or credit such excess against future payments to
be made to the Tax Funds. Any Tax Funds remaining after the Debt has been paid
in full shall be returned to Borrower.
SECTION 6.3 INSURANCE FUNDS.
6.3.1 DEPOSITS OF INSURANCE FUNDS. On the Closing Date,
Borrower shall deposit with Lender the amount of Five Thousand Seven Hundred
Thirty and No/100 Dollars ($5,730.00) and there shall be deposited to the
appropriate Accounts on each Monthly Payment Date an amount equal to one-twelfth
of the Insurance Premiums that Lender estimates will be payable for the renewal
of the coverage afforded by the Policies upon the expiration thereof in order to
accumulate sufficient funds to pay all such Insurance Premiums at least thirty
(30) days prior to the expiration of the Policies. Amounts deposited pursuant to
this Section 6.3.1 are referred to herein as the "INSURANCE FUNDS". If at any
time Lender reasonably determines that the Insurance Funds will not be
sufficient to pay the Insurance Premiums, Lender shall notify Borrower of such
determination and the monthly deposits for Insurance Premiums shall be increased
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by the amount that Lender estimates is sufficient to make up the deficiency at
least thirty (30) days prior to expiration of the Policies.
6.3.2 RELEASE OF INSURANCE FUNDS. Unless an Event of Default
has occurred and is continuing, Lender shall apply the Insurance Funds to
payment of Insurance Premiums. In making any payment relating to Insurance
Premiums, Lender may do so according to any bill, statement or estimate procured
from the insurer or its agent, without inquiry into the accuracy of such bill,
statement or estimate. If the amount of the Insurance Funds shall exceed the
amounts due for Insurance Premiums, Lender shall return any excess to Borrower.
Any Insurance Funds remaining after the Debt has been paid in full shall be
returned to Borrower.
SECTION 6.4 CAPITAL EXPENDITURE FUNDS.
6.4.1 DEPOSITS OF CAPITAL EXPENDITURE FUNDS. On the Closing
Date, Borrower shall deposit with Lender the amount of Two Thousand Five Hundred
Fourteen and 16/100 Dollars ($2,514.16) and there shall be deposited to the
appropriate Accounts on each Monthly Payment Date, an amount equal to Two
Thousand Five Hundred Fourteen and 16/100 Dollars ($2,514.16) for annual Capital
Expenditures approved by Lender, which approval shall not be unreasonably
withheld or delayed; provided, however, Borrower shall have no obligation to
make deposits under this Section 6.4.1 during any month in which the amount then
on deposit in the appropriate Account is greater than or equal to $250,000.
Amounts deposited pursuant to this Section 6.4.1 are referred to herein as the
"CAPITAL EXPENDITURE FUNDS." Lender may reassess its estimate of the amount
necessary for capital expenditures from time to time and, and may require
Borrower to increase the monthly deposits required pursuant to this Section
6.4.1 upon thirty (30) days notice to Borrower if Lender determines in its
reasonable discretion that an increase is necessary to maintain proper operation
of the Property.
6.4.2 RELEASE OF CAPITAL EXPENDITURE FUNDS.
(a) Lender shall disburse, or cause to be disbursed, Capital
Expenditure Funds only for Capital Expenditures.
(b) Lender shall disburse, or cause to be disbursed, to
Borrower the Capital Expenditure Funds upon satisfaction by Borrower of each of
the following conditions: (i) Borrower shall submit a request for payment to
Lender at least ten (10) days prior to the date on which Borrower requests such
payment be made and specifies the Capital Expenditures to be paid, (ii) on the
date such request is received by Lender and on the date such payment is to be
made, no Event of Default shall exist and remain uncured, (iii) Lender shall
have received a certificate from Borrower (A) stating that the items to be
funded by the requested disbursement are Capital Expenditures, (B) stating that
all Capital Expenditures at the Property to be funded by the requested
disbursement have been completed in a good and workmanlike manner and in
accordance with all applicable Legal Requirements, such certificate to be
accompanied by a copy of any license, permit or other approval required by any
Governmental Authority, if any, in connection with the Capital Expenditures, (C)
identifying each Person that supplied materials or labor in connection with the
Capital Expenditures to be funded by the requested disbursement, and (D) stating
that each such Person has been paid in full or will be paid in full upon such
disbursement, such certificate to be accompanied by lien waivers or other
evidence of payment satisfactory to Lender, (iv) at Lender's option, a title
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search for the Property indicating that the Property is free from all Liens,
claims and other encumbrances not previously approved by Lender, (v) at Lender's
option, if the cost of any individual Capital Expenditure exceeds Twenty Five
Thousand and No/100 Dollars ($25,000.00), Lender shall have received a report
satisfactory to Lender in its reasonable discretion from an architect or
engineer approved by Lender in respect of such architect or engineer's
inspection of the required repairs, and (vi) Lender shall have received such
other evidence as Lender shall reasonably request that the Capital Expenditures
at the Property to be funded by the requested disbursement have been completed
and are paid for or will be paid upon such disbursement to Borrower. Lender
shall not be required to disburse Capital Expenditure Funds more frequently than
once each calendar month, and each disbursement must be at least an amount
greater than the Minimum Disbursement Amount (or a lesser amount if the total
amount of Capital Expenditure Funds is less than the Minimum Disbursement
Amount, in which case only one disbursement of the amount remaining in the
account shall be made).
(c) Nothing in this Section 6.4.2 shall (i) make Lender
responsible for making or completing the Capital Expenditures Work; (ii) require
Lender to expend funds in addition to the Capital Expenditure Funds to complete
any Capital Expenditures Work; (iii) obligate Lender to proceed with the Capital
Expenditures Work; or (iv) obligate Lender to demand from Borrower additional
sums to complete any Capital Expenditures Work.
(d) Borrower shall permit Lender and Lender's agents and
representatives (including, without limitation, Lender's engineer, architect, or
inspector) or third parties to enter onto the Property during normal business
hours (subject to the rights of Tenants under their Leases) to inspect the
progress of any Capital Expenditures Work and all materials being used in
connection therewith and to examine all plans and shop drawings relating to such
Capital Expenditures Work. Any such inspection shall be conducted in a manner
designed to minimize interference with Tenants or Borrower's operation of the
Property. Borrower shall cause all contractors and subcontractors to cooperate
with Lender or Lender's representatives or such other Persons described above in
connection with inspections described in this Section 6.4.2(d).
SECTION 6.5 ROLLOVER FUNDS.
6.5.1 DEPOSITS OF ROLLOVER FUNDS. On the Closing Date,
Borrower shall deposit with Lender the amount of Thirty Two Thousand and No/00
Dollars ($32,000.00) and there shall be deposited to the appropriate Account on
each Monthly Payment Date the sum of Thirty Two Thousand and No/00 Dollars
($32,000.00), for tenant improvements and leasing commissions, lease
cancellation fees, buy-out fees or a similar cost that may be incurred following
the date hereof; provided, however, Borrower shall have no obligation to make
deposits under this Section 6.5.1 during any month in which the amount then on
deposit in the appropriate Account is greater than or equal to $500,000. Amounts
deposited pursuant to this Section 6.5.1 are referred to herein as the "ROLLOVER
FUNDS."
6.5.2 RELEASE OF ROLLOVER FUNDS. Lender shall disburse, or
cause to be disbursed, to Borrower the Rollover Funds upon satisfaction by
Borrower of each of the following conditions: (a) Borrower shall submit a
request for payment to Lender at least ten (10) days prior to the date on which
Borrower requests such payment be made and specifies the tenant improvement
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costs and leasing commissions to be paid, (b) on the date such request is
received by Lender and on the date such payment is to be made, no Event of
Default shall exist and remain uncured, (c) subject to Section 4.1.9 hereof,
Lender shall have reviewed and approved the Lease in respect of which Borrower
is obligated to pay or reimburse certain tenant improvement costs and leasing
commissions (to the extent approval is required pursuant to Section 4.1.9
hereof), (d) Lender shall have received and approved a budget for tenant
improvement costs and a schedule of leasing commissions payments and the
requested disbursement will be used to pay all or a portion of such costs and
payments, (e) Lender shall have received a certificate from Borrower (i) stating
that all tenant improvements at the Property to be funded by the requested
disbursement have been completed in good and workmanlike manner and in
accordance with all applicable federal, state and local laws, rules and
regulations, such certificate to be accompanied by a copy of any license, permit
or other approval by any Governmental Authority required in connection with the
Capital Expenditures, (ii) identifying each Person that supplied materials or
labor in connection with the tenant improvements to be funded by the requested
disbursement, and (iii) stating that each such Person has been paid in full or
will be paid in full upon such disbursement, such certificate to be accompanied
by lien waivers or other evidence of payment satisfactory to Lender, (f) at
Lender's option, a title search for the Property indicating that the Property is
free from all Liens, claims and other encumbrances not previously approved by
Lender, (g) Lender shall have received an estoppel certificate from the
applicable tenant stating that (i) all required work is complete and (ii) such
tenant is in occupancy and paying full unabated rent or has taken possession of
the demised premises, and (h) Lender shall have received such other evidence as
Lender shall reasonably request that the tenant improvements at the Property to
be funded by the requested disbursement have been completed and are paid for or
will be paid upon such disbursement to Borrower. Lender shall not be required to
disburse Rollover Funds more frequently than once each calendar month, and each
disbursement must be in an amount greater than the Minimum Disbursement Amount
(or a lesser amount if the total amount of Rollover Funds is less than the
Minimum Disbursement Amount, in which case only one disbursement of the amount
remaining in the account shall be made).
SECTION 6.6 INTENTIONALLY DELETED.
SECTION 6.7 SECURITY INTEREST IN RESERVE FUNDS.
6.7.1 GRANT OF SECURITY INTEREST. Borrower hereby pledges to
Lender, and grants to Lender a security interest in, any and all monies now or
hereafter deposited in the Reserve Funds as additional security for the payment
of the Loan. The Reserve Funds shall be held in Lender's name and may be
commingled with Lender's own funds at financial institutions selected by Lender
in its sole discretion. Upon the occurrence of an Event of Default, Lender may
apply any sums then present in the Reserve Funds to the payment of the Loan in
any order in its sole discretion. Until expended or applied as above provided,
the Reserve Funds shall constitute additional security for the Loan. Lender
shall have no obligation to release any of the Reserve Funds while any Event of
Default or Default then exists.
6.7.2 INTEREST ON RESERVE FUNDS. All interest or income earned
on any and all funds on deposit in any of the Reserve Funds shall be accumulated
for the benefit of Borrower.
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6.7.3 PROHIBITION AGAINST FURTHER ENCUMBRANCE. Borrower shall
not, without the prior consent of Lender, further pledge, assign or grant any
security interest in the Reserve Funds or permit any lien or encumbrance to
attach thereto, or any levy to be made thereon, or any UCC-1 Financing
Statements, except those naming Lender as the secured party, to be filed with
respect thereto.
VII. PROPERTY MANAGEMENT SECTION
7.1 THE MANAGEMENT AGREEMENT.
Borrower shall cause Manager to manage the Property in
accordance with the Management Agreement. Borrower shall (a) diligently perform
and observe all of the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed and observed, (b) promptly
notify Lender of any notice to Borrower of any default that has occurred and is
continuing beyond expiration of applicable cure periods by Borrower in the
performance or observance of any of the terms, covenants or conditions of the
Management Agreement on the part of Borrower to be performed and observed, and
(c) promptly deliver to Lender a copy of each financial statement, business
plan, capital expenditures plan, report and estimate received by it under the
Management Agreement. If Borrower shall default beyond expiration of applicable
cure periods in the performance or observance of any material term, covenant or
condition of the Management Agreement on the part of Borrower to be performed or
observed, then, without limiting Lender's other rights or remedies under this
Agreement or the other Loan Documents, and without waiving or releasing Borrower
from any of its obligations hereunder or under the Management Agreement, Lender
shall have the right, but shall be under no obligation, to pay any sums and to
perform any act as may be appropriate to cause all the material terms, covenants
and conditions of the Management Agreement on the part of Borrower to be
performed or observed.
SECTION 7.2 PROHIBITION AGAINST TERMINATION OR MODIFICATION.
Borrower shall not surrender, terminate, cancel, modify,
renew, amend, or extend the Management Agreement, or enter into any other
agreement relating to the management or operation of the Property with Manager
or any other Person, or consent to the assignment by the Manager of its interest
under the Management Agreement, in each case without the express written consent
of Lender, which consent shall not be unreasonably withheld; provided, however,
with respect to a new manager such consent may be conditioned upon Borrower
delivering a Rating Agency Confirmation as to such new manager and management
agreement and, if such new manager is an Affiliate of Borrower, upon delivery of
a non-consolidation opinion acceptable to the Rating Agencies. If at any time
Lender consents to the appointment of a new manager, such new manager and
Borrower shall, as a condition of Lender's consent, execute a subordination of
management agreement in the form then used by Lender. Notwithstanding the
foregoing, Borrower shall have the right to terminate the Management Agreement
and enter into a new management agreement upon terms reasonably acceptable to
Lender with the Approved Property Manager; provided, however, Borrower shall (i)
pay all of Lender's expenses in connection therewith, and (ii) enter into an
Assignment of Management Agreement with Lender similar to that which Lender and
Manager have entered into as of the date hereof.
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SECTION 7.3 REPLACEMENT OF MANAGER.
Lender shall have the right to require Borrower to replace the
Manager with a Person which is not an Affiliate of, but is chosen by, Borrower
and approved by Lender upon the occurrence of any one or more of the following
events: (a) at any time following the occurrence of an Event of Default, (b) if
Manager shall be in default under the Management Agreement beyond any applicable
notice and cure period and/or (c) if Manager becomes insolvent or is adjudicated
bankrupt or if any petition for bankruptcy shall be filed against or consented
to by Manager.
VIII. TRANSFERS
SECTION 8.1 PROHIBITED TRANSFER OR ENCUMBRANCE OF PROPERTY.
(a) Borrower shall not cause or permit a Sale or Pledge of the
Property or any part thereof or any legal or beneficial interest therein nor
permit a Sale or Pledge of an interest in any Restricted Party (in each case, a
"PROHIBITED Transfer"), other than pursuant to Leases of space in the
Improvements to Tenants in accordance with the provisions of Section 4.1.9,
without the prior written consent of Lender.
(b) A Prohibited Transfer shall include, but not be limited
to, (i) an installment sales agreement wherein Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of the Property for
other than actual occupancy by a space tenant thereunder or a sale, assignment
or other transfer of, or the grant of a security interest in, Borrower's right,
title and interest in and to any Leases or any Rents; (iii) if a Restricted
Party is a corporation, any merger, consolidation or Sale or Pledge of such
corporation's stock or the creation or issuance of new stock in one or a series
of transactions; (iv) if a Restricted Party is a limited or general partnership
or joint venture, any merger or consolidation or the change, removal,
resignation or addition of a general partner or the Sale or Pledge of the
partnership interest of any general or limited partner or any profits or
proceeds relating to such partnership interests or the creation or issuance of
new partnership interests; (v) if a Restricted Party is a limited liability
company, any merger or consolidation or the change, removal, resignation or
addition of a managing member or non-member manager (or if no managing member,
any member) or the Sale or Pledge of the membership interest of any member or
any profits or proceeds relating to such membership interest; (vi) if a
Restricted Party is a trust or nominee trust, any merger, consolidation or the
Sale or Pledge of the legal or beneficial interest in a Restricted Party or the
creation or issuance of new legal or beneficial interests; or (vii) the removal
or the resignation of the Manager (including, without limitation, an Affiliated
Manager) other than in accordance with Article VII.
(c) Notwithstanding the provisions of Section 8.1(b), the
following transfers shall not be deemed to be a Prohibited Transfer: (i) a
transfer by devise or descent or by operation of law upon the death of a member,
partner or shareholder of a Restricted Party; (ii) the Sale or Pledge, in one or
a series of transactions, of not more than forty-nine percent (49%) of the
stock, limited partnership interests or non-managing membership interests (as
the case may be) in a Restricted Party; provided, however, no such transfers
shall result in a change in Control in the Restricted Party or change in control
of the Property, and as a condition to each such transfer, Lender shall receive
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not less than twenty (20) days prior written notice of such proposed transfer,
(iii) the sale, transfer, cancellation or issuance of stock or other securities
of Cedar Shopping Centers, Inc., a Maryland corporation, provided such stock or
other securities are listed on the New York Stock Exchange or such other
nationally recognized stock exchange, (iv) transfers of direct or indirect
membership interests in Borrower between any then existing I&G Fund to another
I&G Fund, provided that (A) Borrower shall maintain its status as a single
purpose, bankruptcy remote entity under criteria established by the Rating
Agencies, (B) if after giving effect to such transfer and all prior transfers,
more than forty-nine percent (49%) in the aggregate of direct or indirect
interests in Borrower are owned by any Person and its Affiliates that owned less
than a forty nine percent (49%) direct or indirect interest in Borrower as of
the Closing Date, Lender shall receive a non consolidation opinion acceptable to
Lender and the Rating Agencies, (v) from and after a transfer pursuant to
Sections 8.2.2(a) or (b), transfers amongst the then existing members of
Cedar-Franklin Village 2 LLC of their direct membership interests in
Cedar-Franklin Village 2 LLC, provided that (A) Borrower shall maintain its
status as a single purpose, bankruptcy remote entity under criteria established
by the Rating Agencies, (B) if after giving effect to such transfer and all
prior transfers, more than forty-nine percent (49%) in the aggregate of direct
or indirect interests in Borrower are owned by any Person and its Affiliates
that owned less than a forty nine percent (49%) direct or indirect interest in
Borrower as of the Closing Date, Lender shall receive a non consolidation
opinion acceptable to Lender and the Rating Agencies and (vi) transfers of
interests in the I&G Funds by investors in such I&G Funds.
(d) Lender reserves the right to condition the consent to a
Prohibited Transfer requested hereunder upon (a) a modification of the terms
hereof and on assumption of the Note and the other Loan Documents as so modified
by the proposed Prohibited Transfer, (b) receipt of payment of a transfer fee
equal to 0.5% of the outstanding principal balance of the Loan and all of
Lender's expenses actually incurred in connection with such Prohibited Transfer,
(c) receipt of Rating Agency Confirmation with respect to the transfer, (d) the
proposed transferee's continued compliance with the covenants set forth in this
Agreement (including, without limitation, the covenants in Section 3.1.24) and
the other Loan Documents, (e) a new manager for the Property and a new
management agreement satisfactory to Lender, (f) a new guaranty(ies) and
environmental indemnity, substantially in the form of the Guaranty, Supplemental
Guaranty, and Environmental Indemnity delivered contemporaneously with this
Agreement, from guarantor(s) and indemnitor(s) satisfactory to Lender, and (g)
the satisfaction of such other conditions and/or legal opinions as Lender shall
determine in its sole discretion to be in the interest of Lender. All expenses
incurred by Lender shall be payable by Borrower whether or not Lender consents
to the Prohibited Transfer. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon a Prohibited Transfer
made without Lender's consent. This provision shall apply to each and every
Prohibited Transfer, whether or not Lender has consented to any previous
Prohibited Transfer. Notwithstanding anything to the contrary contained in this
Section 8.1(d), in the event a substantive non-consolidation opinion was
delivered to Lender and the Rating Agencies in connection with the closing of
the Loan, and if any Prohibited Transfer results in any Person and its
Affiliates owning in excess of forty-nine percent (49%) of the ownership
interests in a Restricted Party, Borrower shall, prior to such transfer, and in
addition to any other requirement for Lender consent contained herein, deliver a
revised substantive non-consolidation opinion to Lender reflecting such
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Prohibited Transfer, which opinion shall be in form, scope and substance
acceptable in all respects to Lender and the Rating Agencies.
SECTION 8.2 PERMITTED TRANSFERS
8.2.1 PERMITTED TRANSFER OF THE PROPERTY
(a) Notwithstanding the provisions of Section 8.1, Borrower
shall have a one-time right to sell or otherwise transfer the Property while the
Loan or any portion thereof is outstanding, subject to the satisfaction of the
following conditions:
(i) no Event of Default shall have occurred and remain
uncured;
(ii) the proposed transferee ("TRANSFEREE") shall be a
Permitted Transferee and shall be a reputable entity or person of good
character, creditworthy, with sufficient financial worth considering
the obligations assumed and undertaken, as evidenced by financial
statements and other information reasonably requested by Lender;
(iii) the Transferee and its property manager shall have
sufficient experience in the ownership and management of properties
similar to the Property, and Lender shall be provided with reasonable
evidence thereof (and Lender reserves the right to approve the
Transferee without approving the substitution of the property manager);
(iv) Lender shall have received Rating Agency Confirmation
with respect to the transfer;
(v) Lender shall have received evidence satisfactory to it
(which shall include a legal non-consolidation opinion acceptable to
Lender) that the single purpose nature and bankruptcy remoteness of
Borrower its shareholders, partners, or members, as the case may be,
following such transfer are in accordance with the standards of the
Rating Agencies;
(vi) the Transferee shall have executed and delivered to
Lender an assumption agreement in form and substance acceptable to
Lender, evidencing such Transferee's agreement to abide and be bound by
the terms of the Note, the Mortgage and the other Loan Documents,
together with such legal opinions and Title Insurance endorsements as
may be reasonably requested by Lender; and
(vii) Lender shall have received on or prior to the date of
the sale or transfer (A) an assumption fee equal to one-half of one
percent (0.50%) of the then unpaid principal balance of the Note, (B) a
rating confirmation fee for each of the Rating Agencies delivering a
Rating Agency Confirmation pursuant to clause (iv) above, which
confirmation fees shall be equal to the then customary fees charged by
each applicable Rating Agency for such a confirmation and (C) the
payment of all costs and expenses actually incurred by Lender and the
Rating Agencies in connection with such assumption (including
reasonable attorneys' fees and costs).
(viii) the Transferee shall comply with the provisions of
Section 3.1.38 hereof.
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8.2.2 PERMITTED TRANSFER OF INTEREST IN BORROWER
(a) Notwithstanding the provisions of Section 8.1, Borrower
and the holder of any direct or indirect owner of ownership interest in Borrower
shall have the right to transfer of not more than an aggregate of 80% of the
direct or indirect ownership interests in the Borrower to a Qualified
Transferee, provided that (i) no Event of Default shall have occurred and be
continuing, (ii) Borrower shall pay all out-of-pocket fees and expenses actually
incurred by Lender in connection with such Transfer including, without
limitation, the cost of any third party reports, reasonable legal fees and
expenses, or required legal opinions, (iii) Lender shall have received thirty
(30) days advance written notice from Borrower of such Transfer, (iv) Lender
shall have received such documents, certificates and legal opinions as it may
reasonably request, (v) if after giving effect to such Transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of direct or
indirect interests in Borrower are owned by any Person and its Affiliates that
owned less than a forty nine percent (49%) direct or indirect interest in
Borrower as of the Closing Date, Lender shall receive a non consolidation
opinion acceptable to Lender and the Rating Agencies (vi) Borrower shall
maintain its status as a single purpose, bankruptcy remote entity under criteria
established by the Rating Agencies, (vii) if after giving effect to such
transfer and all prior transfers, more than forty-nine percent (49%) in the
aggregate of direct or indirect interests in Borrower are proposed to be
transferred, Lender shall have received a Rating Agency Confirmation, (viii) the
Transferee shall comply with the provisions of Section 3.1.38 hereof and (ix)
the Property is managed by an Approved Property Manager.
(b) Notwithstanding the provisions of Section 8.1, Borrower
and the holder of any direct or indirect owner of ownership interest in Borrower
shall have the right to transfer of not more than an aggregate of 80% of the
direct or indirect ownership interests in the Borrower to one or more of the I&G
Funds, provided that (i) no Event of Default shall have occurred and be
continuing, (ii) Borrower shall pay all out-of-pocket fees and expenses actually
incurred by Lender in connection with such Transfer including, without
limitation, the cost of any third party reports, reasonable legal fees and
expenses, or required legal opinions, (iii) Lender shall have received thirty
(30) days advance written notice from Borrower of such Transfer, (iv) Lender
shall have received such documents, certificates and legal opinions as it may
reasonably request, (v) if after giving effect to such Transfer and all prior
transfers, more than forty-nine percent (49%) in the aggregate of direct or
indirect interests in Borrower are owned by any Person and its Affiliates that
owned less than a forty nine percent (49%) direct or indirect interest in
Borrower as of the Closing Date, Lender shall receive a non consolidation
opinion acceptable to Lender and the Rating Agencies (vi) Borrower shall
maintain its status as a single purpose, bankruptcy remote entity under criteria
established by the Rating Agencies, (vii) the Transferee shall comply with the
provisions of Section 3.1.38 hereof, (viii) Borrower provides an Officer's
Certificate that as of the date of the transfer, the I&G Funds' net worth has
not materially decreased since the date hereof and (ix) the Property is managed
by an Approved Property Manager.
SECTION 8.3 SUBSTITUTE GUARANTOR.
Solely in connection with Transfers permitted pursuant to
Sections 8.2.1, 8.1(c)(v) and 8.2.2, Borrower may substitute the Guarantor under
the Guaranty, the Supplemental Guaranty and the Environmental Indemnity
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(collectively, the "GUARANTIES") with another guarantor ("SUBSTITUTE GUARANTOR")
provided that: (i) such Substitute Guarantor satisfies the requirements of a
Qualified Transferee as of the date of the proposed substitution and is
otherwise acceptable to Lender in its sole discretion; and (ii) such Substitute
Guarantor executes the Guaranties, in the form identical to Guaranties executed
by Guarantor as of the Closing Date. Upon such substitution in accordance with
the provisions of this Section 8.3 the former Guarantor shall be released from
any liability or other obligation under each of the Guaranties.
IX. SALE AND SECURITIZATION OF MORTGAGE SECTION
9.1 SALE OF MORTGAGE AND SECURITIZATION.
(a) Lender shall have the right (i) to sell or otherwise
transfer the Loan or any portion thereof as a whole loan, (ii) to sell
participation interests in the Loan or (iii) to securitize the Loan or any
portion thereof in a single asset securitization or a pooled loan
securitization. (The transactions referred to in clauses (i), (ii) and (iii)
shall hereinafter be referred to collectively as "SECONDARY MARKET TRANSACTIONS"
and the transaction referred to in clause (iii) shall hereinafter be referred to
as a "SECURITIZATION." Any certificates, notes or other securities issued in
connection with a Securitization are hereinafter referred to as "SECURITIES").
(b) If requested by Lender, at not material cost to Borrower,
Borrower shall assist Lender in satisfying the market standards to which Lender
customarily adheres or which may be reasonably required in the marketplace or by
the Rating Agencies in connection with any Secondary Market Transactions,
including, without limitation, to:
(i) (A) provide updated financial and other information with
respect to the Property, the business operated at the Property,
Borrower and the Manager, (B) provide updated budgets relating to the
Property and (C) provide updated appraisals, market studies,
environmental reviews (Phase I's and, if appropriate, Phase II's),
property condition reports and other due diligence investigations of
the Property (the "UPDATED INFORMATION"), together, with appropriate
verification of the Updated Information through letters of auditors or
opinions of counsel acceptable to Lender and the Rating Agencies;
(ii) provide opinions of counsel, which may be relied upon by
Lender, the Rating Agencies and their respective counsel, agents and
representatives, as to non-consolidation or any other opinion customary
in Secondary Market Transactions or required by the Rating Agencies
with respect to the Property and Borrower and Affiliates, which counsel
and opinions shall be reasonably satisfactory to Lender and the Rating
Agencies;
(iii) provide updated, as of the closing date of the Secondary
Market Transaction, representations and warranties made in the Loan
Documents and such additional representations and warranties as the
Rating Agencies may require;
(iv) execute such amendments to the Loan Documents and
Borrower's organizational documents reasonably requested by Lender,
including, without limitation, amending the Monthly Payment Date, the
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execution of one or more replacement loan agreements, as may be
requested by Lender or the Rating Agencies to effect the Securitization
and/or deliver one or more new component notes to replace the original
note or modify the original note to reflect multiple components of the
Loan (and such new notes or modified note shall have the same initial
weighted average coupon of the original note, but such new notes or
modified note may change the interest rate, Monthly Payment Date and
amortization of the Loan), and modify the Cash Management Agreement
with respect to the newly created components such that the pricing and
marketability of the Securities and the size of each class of
Securities and the rating assigned to each such class by the Rating
Agencies shall provide the most favorable rating levels and achieve the
optimum rating levels for the Loan; provided, however, any such
amendments or agreements will not result in an economic change in the
Loan terms and will not materially alter the payment terms set forth in
this Agreement or the other Loan Documents or materially and adversely
affect Borrower or impose additional material obligations or
liabilities upon Borrower; and
(v) attend management meetings and conduct tours of the
Property.
SECTION 9.2 SECURITIZATION INDEMNIFICATION.
(a) Borrower understands that information provided to Lender
by Borrower and its agents, counsel and representatives may be included in
disclosure documents in connection with the Securitization, including, without
limitation, an offering circular, a prospectus, prospectus supplement, private
placement memorandum or other offering document (each, a "DISCLOSURE DOCUMENT")
and may also be included in filings with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "SECURITIES ACT"), or
the Securities and Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
may be made available to investors or prospective investors in the Securities,
the Rating Agencies, and service providers relating to the Securitization.
(b) Borrower shall provide in connection with each of (i) a
preliminary and a final private placement memorandum or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an agreement (A)
certifying that Borrower has examined such Disclosure Documents specified by
Lender and that each such Disclosure Document, as it relates to Borrower,
Borrower Affiliates, the Property, Manager and all other aspects of the Loan,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading, (B) indemnifying
Lender (and for purposes of this Section 9.2, Lender hereunder shall include its
officers and directors), the Affiliate of Lender that has filed the registration
statement relating to the Securitization (the "REGISTRATION STATEMENT"), each of
its directors, each of its officers who have signed the Registration Statement
and each Person that controls the Affiliate within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (collectively, the "LENDER
GROUP"), and Lender, and any other placement agent or underwriter with respect
to the Securitization, each of their respective directors and each Person who
controls Lender or any other placement agent or underwriter within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act
(collectively, the "UNDERWRITER GROUP") for any losses, claims, damages or
liabilities (collectively, the "LIABILITIES") to which Lender, the Lender Group
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or the Underwriter Group may become subject insofar as the Liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such sections or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated in such sections or necessary in order to make the statements in such
sections, in light of the circumstances under which they were made, not
misleading and (C) agreeing to reimburse Lender, the Lender Group and/or the
Underwriter Group for any legal or other expenses reasonably incurred by Lender,
the Lender Group and the Underwriter Group in connection with investigating or
defending the Liabilities; provided, however, that Borrower will be liable in
any such case under clauses (B) or (C) above only to the extent that any such
loss claim, damage or liability arises out of or is based upon any such untrue
statement or omission made therein in reliance upon and in conformity with
information furnished to Lender by or on behalf of Borrower in connection with
the preparation of the Disclosure Document or in connection with the
underwriting or closing of the Loan, including, without limitation, financial
statements of Borrower, operating statements and rent rolls with respect to the
Property. This indemnity agreement will be in addition to any liability which
Borrower may otherwise have.
(c) In connection with Exchange Act Filings, Borrower shall
(i) indemnify Lender, the Lender Group and the Underwriter Group for Liabilities
to which Lender, the Lender Group or the Underwriter Group may become subject
insofar as the Liabilities arise out of or are based upon the omission or
alleged omission to state in the Disclosure Document a material fact required to
be stated in the Disclosure Document in order to make the statements in the
Disclosure Document, in light of the circumstances under which they were made,
not misleading and (ii) reimburse Lender, the Lender Group or the Underwriter
Group for any reasonable legal or other expenses actually and reasonably
incurred by Lender, the Lender Group or the Underwriter Group in connection with
defending or investigating the Liabilities.
(d) Promptly after receipt by an indemnified party under this
Section 9.2 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9.2, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party under this Section 9.2, such indemnified party shall
pay for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
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indemnified party at the cost of the indemnifying party. The indemnifying party
shall not be liable for the expenses of more than one separate counsel unless an
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 9.2(b) or
(c) is for any reason held to be unenforceable as to an indemnified party in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 9.2(b) or (c), the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such losses, claims,
damages or liabilities (or action in respect thereof); provided, however, that
no Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. In determining the
amount of contribution to which the respective parties are entitled, the
following factors shall be considered: (i) Lender's and Borrower's relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted; (ii) the opportunity to correct and prevent any
statement or omission; and (iii) any other equitable considerations appropriate
in the circumstances. Lender and Borrower hereby agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation.
(f) The liabilities and obligations of both Borrower and
Lender under this Section 9.2 shall survive the termination of this Agreement
and the satisfaction and discharge of the Debt.
X. DEFAULTS
SECTION 10.1 EVENT OF DEFAULT.
(a) Each of the following events shall constitute an event of
default hereunder (an "EVENT OF DEFAULT"):
(i) if (A) any monthly installment of interest due under the
Note or the payment due on the Maturity Date is not paid within five
(5) days of the date when due or (B) any other portion of the Debt is
not paid when due and such non-payment in this Section 10.1(a)(i)(B)
continues for five (5) days following notice to Borrower that the same
is due and payable;
(ii) if any of the Taxes or Other Charges are not paid when
due (except to the extent (A) Lender is obligated to disburse Tax Funds
for the payment of Taxes pursuant to Section 6.2.2 hereof, (B) Lender
has sufficient Tax Funds in the Tax Funds account for such payment to
make such payment, (C) no other Event of Default shall have occurred
and (D) Lender fails to make such payment of Taxes);
(iii) if the Policies are not kept in full force and effect
provided, however, if Borrower has deposited sufficient funds into the
Insurance Account (as defined in the Cash Management Agreement) for the
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purchase of the Policies in accordance with Section 6.3 hereof, the
failure to maintain such Policies due solely to non-payment of the
Insurance Premiums shall not be deemed an Event of Default hereunder;
(iv) if Borrower breaches or permits or suffers a breach of
Article 6 of the Mortgage or Article VIII of this Agreement;
(v) if any representation or warranty made by Borrower herein
or in any other Loan Document, or in any report, certificate, financial
statement or other instrument, agreement or document furnished to
Lender shall have been false or misleading in any material respect as
of the date the representation or warranty was made;
(vi) if Borrower, any SPC Party or Guarantor shall make an
assignment for the benefit of creditors;
(vii) if Borrower fails or admits its inability to pay debts
generally as they become due;
(viii) if a receiver, liquidator or trustee shall be appointed
for Borrower, any SPC Party or Guarantor or if Borrower, any SPC Party
or Guarantor shall be adjudicated bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be
filed by or against, consented to, or acquiesced in by, Borrower, any
SPC Party or Guarantor, or if any proceeding for the dissolution or
liquidation of Borrower, any SPC Party or Guarantor shall be
instituted; provided, however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented to by
Borrower, and SPC Party or Guarantor, upon the same not being
discharged, stayed or dismissed within forty-five (45) days or if an
order for relief is entered;
(ix) if Borrower assigns its rights under this Agreement or
any of the other Loan Documents or any interest herein or therein in
contravention of the Loan Documents;
(x) Intentionally Deleted;
(xi) if any of the assumptions contained in the Insolvency
Opinion, or in any other non-consolidation opinion delivered to Lender
in connection with the Loan, or in any other non-consolidation
delivered subsequent to the closing of the Loan, is or shall become
untrue in any material respect and Borrower fails to deliver
updates/corrections within thirty (30) days of request therefor;
(xii) if Borrower breaches any representation, warranty or
covenant contained in Section 3.1.24 hereof;
(xiii) intentionally omitted;
(xiv) if Guarantor breaches in any material respect any
covenant, warranty or representation contained in the Guaranty or the
Supplemental Guaranty;
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(xv) if Borrower shall continue to be in Default under any of
the other terms, covenants or conditions of this Agreement not
specified in subsections (i) through and including (xv) above, for ten
(10) days after notice to Borrower from Lender, in the case of any
Default which can be cured by the payment of a sum of money, or for
thirty (30) days after notice from Lender in the case of any other
Default; provided, however, that if such non monetary Default is
susceptible of cure but cannot reasonably be cured within such thirty
(30) day period and provided further that Borrower shall have commenced
to cure such Default within such thirty (30) day period and thereafter
diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably
necessary for Borrower in the exercise of due diligence to cure such
Default, such additional period not to exceed ninety (90) days; or
(xvi) if there shall be Default under any of the other Loan
Documents beyond any applicable cure periods contained in such Loan
Documents, whether as to Borrower or the Property, or if any other such
event shall occur or condition shall exist, if the effect of such event
or condition is to accelerate the maturity of any portion of the Debt
or to permit Lender to accelerate the maturity of all or any portion of
the Debt.
(b) Upon the occurrence of an Event of Default (other than an
Event of Default described in Sections 10.1(a)(vi), (vii) or (viii) above) and
at any time thereafter Lender may, in addition to any other rights or remedies
available to it pursuant to this Agreement and the other Loan Documents or at
law or in equity, take such action, without notice or demand, that Lender deems
advisable to protect and enforce its rights against Borrower and in and to the
Property, including, without limitation, declaring the Debt to be immediately
due and payable, and Lender may enforce or avail itself of any or all rights or
remedies provided in the Loan Documents against Borrower and the Property,
including, without limitation, all rights or remedies available at law or in
equity; and upon any Event of Default described in Sections 10.1(a)(vi), (vii)
or (viii) above, the Debt and all other obligations of Borrower hereunder and
under the other Loan Documents shall immediately and automatically become due
and payable, without notice or demand, and Borrower hereby expressly waives any
such notice or demand, anything contained herein or in any other Loan Document
to the contrary notwithstanding.
SECTION 10.2 REMEDIES.
(a) Upon the occurrence of an Event of Default, all or any one
or more of the rights, powers, privileges and other remedies available to Lender
against Borrower under this Agreement or any of the other Loan Documents
executed and delivered by, or applicable to, Borrower or at law or in equity may
be exercised by Lender at any time and from time to time, whether or not all or
any of the Debt shall be declared due and payable, and whether or not Lender
shall have commenced any foreclosure proceeding or other action for the
enforcement of its rights and remedies under any of the Loan Documents with
respect to the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singly, successively, together
or otherwise, at such time and in such order as Lender may determine in its sole
discretion, to the fullest extent permitted by law, without impairing or
otherwise affecting the other rights and remedies of Lender permitted by law,
equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing and subject to applicable law,
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if an Event of Default is continuing (i) Lender is not subject to any "one
action" or "election of remedies" law or rule, and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted all of its remedies against the Property and
the Mortgage has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Debt or the Debt has been paid in full.
(b) Subject to applicable law, Lender shall have the right
from time to time to partially foreclose the Mortgage in any manner and for any
amounts secured by the Mortgage then due and payable as determined by Lender in
its sole discretion including, without limitation, the following circumstances:
(i) in the event Borrower defaults beyond any applicable grace period in the
payment of one or more scheduled payments of principal and interest, Lender may
foreclose the Mortgage to recover such delinquent payments, or (ii) in the event
Lender elects to accelerate less than the entire outstanding principal balance
of the Loan, Lender may foreclose the Mortgage to recover so much of the
principal balance of the Loan as Lender may accelerate and such other sums
secured by the Mortgage as Lender may elect. Notwithstanding one or more partial
foreclosures, the Property shall remain subject to the Mortgage to secure
payment of sums secured by the Mortgage and not previously recovered.
(c) Lender shall have the right from time to time to sever the
Note and the other Loan Documents into one or more separate notes, mortgages and
other security documents (the "SEVERED LOAN DOCUMENTS") in such denominations as
Lender shall determine in its sole discretion for purposes of evidencing and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time, promptly after the request of Lender, a
severance agreement and such other documents as Lender shall request in order to
effect the severance described in the preceding sentence, all in form and
substance reasonably satisfactory to Lender. Borrower hereby absolutely and
irrevocably appoints Lender as its true and lawful attorney, coupled with an
interest, in its name and stead to make and execute all documents necessary or
desirable to effect the aforesaid severance, Borrower ratifying all that its
said attorney shall do by virtue thereof; provided, however, Lender shall not
make or execute any such documents under such power until three (3) days after
notice has been given to Borrower by Lender of Lender's intent to exercise its
rights under such power. Except as may be required in connection with a
Securitization pursuant to Section 9.1 hereof, (i) Borrower shall not be
obligated to pay any costs or expenses incurred in connection with the
preparation, execution, recording or filing of the Severed Loan Documents, and
(ii) the Severed Loan Documents shall not contain any representations,
warranties or covenants not contained in the Loan Documents and any such
representations and warranties contained in the Severed Loan Documents will be
given by Borrower only as of the Closing Date.
(d) Any amounts recovered from the Property or any other
collateral for the Loan after an Event of Default may be applied by Lender
toward the payment of any interest and/or principal of the Loan and/or any other
amounts due under the Loan Documents in such order, priority and proportions as
Lender in its sole discretion shall determine.
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SECTION 10.3 RIGHT TO CURE DEFAULTS.
Lender may, but without any obligation to do so and without
notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder or being deemed to have cured any Event of Default
hereunder, make, do or perform any obligation of Borrower hereunder in such
manner and to such extent as Lender may deem necessary. Lender is authorized to
enter upon the Property for such purposes, or appear in, defend, or bring any
action or proceeding to protect its interest in the Property for such purposes,
and the cost and expense actually incurred thereof (including reasonable
attorneys' fees to the extent permitted by law), with interest as provided in
this Section 10.3, shall constitute a portion of the Debt and shall be due and
payable to Lender upon demand. All such costs and expenses actually incurred by
Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any action or proceeding shall bear
interest at the Default Rate, for the period after such cost or expense was
incurred to the date of payment to Lender. All such costs and expenses incurred
by Lender together with interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by the liens, claims
and security interests provided to Lender under the Loan Documents and shall be
immediately due and payable upon demand by Lender therefore.
SECTION 10.4 REMEDIES CUMULATIVE.
The rights, powers and remedies of Lender under this Agreement
shall be cumulative and not exclusive of any other right, power or remedy which
Lender may have against Borrower pursuant to this Agreement or the other Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly, concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole discretion. No delay or
omission to exercise any remedy, right or power accruing upon an Event of
Default shall impair any such remedy, right or power or shall be construed as a
waiver thereof, but any such remedy, right or power may be exercised from time
to time and as often as may be deemed expedient. A waiver of one Default or
Event of Default with respect to Borrower shall not be construed to be a waiver
of any subsequent Default or Event of Default by Borrower or to impair any
remedy, right or power consequent thereon.
XI. MISCELLANEOUS
SECTION 11.1 SUCCESSORS AND ASSIGNS.
Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such party. All covenants, promises
and agreements in this Agreement, by or on behalf of Borrower, shall inure to
the benefit of the legal representatives, successors and assigns of Lender.
SECTION 11.2 LENDER'S DISCRETION.
Whenever pursuant to this Agreement Lender exercises any right
given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide whether arrangements or terms are satisfactory or not satisfactory shall
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(except as is otherwise specifically herein provided) be in the sole discretion
of Lender and shall be final and conclusive. Prior to a Securitization, whenever
pursuant to this Agreement the Rating Agencies are given any right to approve or
disapprove, or any arrangement or term is to be satisfactory to the Rating
Agencies, the decision of Lender to approve or disapprove or to decide whether
arrangements or terms are satisfactory or not satisfactory, based upon Lender's
determination of Rating Agency criteria, shall be substituted therefore.
SECTION 11.3 GOVERNING LAW.
(A) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF
NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED
PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS
LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,
VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT
THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
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HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
Stuart H. Widowski
44 South Bayles Avenue
Port Washington, New York 11050
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
SECTION 11.4 MODIFICATION, WAIVER IN WRITING.
No modification, amendment, extension, discharge, termination
or waiver of any provision of this Agreement or of any other Loan Document, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in a writing signed by the party against whom
enforcement is sought, and then such waiver or consent shall be effective only
in the specific instance, and for the purpose, for which given. Except as
otherwise expressly provided herein, no notice to, or demand on Borrower, shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.
SECTION 11.5 DELAY NOT A WAIVER.
Neither any failure nor any delay on the part of Lender in
insisting upon strict performance of any term, condition, covenant or agreement,
or exercising any right, power, remedy or privilege hereunder, or under any
other Loan Document, shall operate as or constitute a waiver thereof, nor shall
a single or partial exercise thereof preclude any other future exercise, or the
exercise of any other right, power, remedy or privilege. In particular, and not
by way of limitation, by accepting payment after the due date of any amount
payable under this Agreement or any other Loan Document, Lender shall not be
deemed to have waived any right either to require prompt payment when due of all
other amounts due under this Agreement or the other Loan Documents, or to
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declare a default for failure to effect prompt payment of any such other amount.
Lender shall have the right to waive or reduce any time periods that Lender is
entitled to under the Loan Documents in its sole and absolute discretion.
SECTION 11.6 NOTICES.
All notices, demands, requests, consents, approvals or other
communications (any of the foregoing, a "NOTICE") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such
other address as such party may hereafter specify in accordance with the
provisions of this Section 11.6. Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on the
date of sending by facsimile transmission if sent during business hours on a
Business Day (otherwise on the next Business Day), (c) on the date of delivery
by hand if delivered during business hours on a Business Day (otherwise on the
next Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:
If to Lender:
Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Facsimile No.: (212) 479-5800
with a copy to:
Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Facsimile No.: (212) 479-5800
with a copy to:
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
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If to Borrower:
Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Suite 304
Port Washington, NY 11050
Attention: Brenda J. Walker and Stuart H. Widowski, Esq.
Facsimile No.: (516) 767-6497
with a copy to:
Stroock & Stroock, & Lavan, LLP
180 Maiden Lane
New York, New York 10038
Attention: Steven P. Moskowitz
Facsimile No.: (212) 806-6006
SECTION 11.7 TRIAL BY JURY.
BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
SECTION 11.8 HEADINGS.
The Article and/or Section headings and the Table of Contents
in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
SECTION 11.9 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
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SECTION 11.10 PREFERENCES.
Lender shall have the continuing and exclusive right to apply
or reverse and reapply any and all payments by Borrower to any portion of the
obligations of Borrower hereunder. To the extent Borrower makes a payment or
payments to Lender, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the obligations hereunder or
part thereof intended to be satisfied shall be revived and continue in full
force and effect, as if such payment or proceeds had not been received by
Lender.
SECTION 11.11 WAIVER OF NOTICE.
Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Agreement
or the other Loan Documents specifically and expressly provide for the giving of
notice by Lender to Borrower and except with respect to matters for which
Borrower is not, pursuant to applicable Legal Requirements, permitted to waive
the giving of notice. Borrower hereby expressly waives the right to receive any
notice from Lender with respect to any matter for which this Agreement or the
other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower.
SECTION 11.12 REMEDIES OF BORROWER.
In the event that a claim or adjudication is made that Lender
or its agents have acted unreasonably or unreasonably delayed acting in any case
where, by law or under this Agreement or the other Loan Documents, Lender or
such agent, as the case may be, has an obligation to act reasonably or promptly,
neither Lender nor its agents shall be liable for any monetary damages, and
Borrower's sole remedy shall be limited to commencing an action seeking
injunctive relief or declaratory judgment. Any action or proceeding to determine
whether Lender has acted reasonably shall be determined by an action seeking
declaratory judgment.
SECTION 11.13 EXPENSES; INDEMNITY.
(a) Borrower shall pay or, if Borrower fails to pay, reimburse
Lender upon receipt of notice from Lender, for all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements actually incurred by
Lender in connection with (i) the preparation, negotiation, execution and
delivery of this Agreement and the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby and all the costs of furnishing
all opinions of counsel (including without limitation any opinions requested by
Lender as to any legal matters pertaining to this Agreement, the other Loan
Documents or the Property); (ii) Borrower's ongoing performance of and
compliance with Borrower's agreements and covenants contained in this Agreement
and the other Loan Documents on its part to be performed or complied with after
the Closing Date, including, without limitation, confirming compliance with
environmental and insurance requirements; (iii) the negotiation, preparation,
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execution, delivery and administration of any consents, amendments, waivers or
other modifications to this Agreement and the other Loan Documents and any other
documents or matters requested by Borrower; (iv) the filing and recording fees
and expenses, Title Insurance and reasonable fees and expenses of counsel for
providing to Lender all required legal opinions, and other similar expenses
incurred, in creating and perfecting the Liens in favor of Lender pursuant to
this Agreement and the other Loan Documents; (v) enforcing or preserving any
rights, in response to third party claims or the prosecuting or defending of any
action or proceeding or other litigation or otherwise, in each case against,
under or affecting Borrower, this Agreement, the other Loan Documents, the
Property, or any other security given for the Loan; and (vi) enforcing any
obligations of or collecting any payments due from Borrower under this
Agreement, the other Loan Documents or with respect to the Property or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work out" or of any insolvency
or bankruptcy proceedings; provided, however, that Borrower shall not be liable
for the payment of any such costs and expenses to the extent the same arise by
reason of the gross negligence, illegal acts, fraud, bad faith or willful
misconduct of Lender.
(b) Borrower shall indemnify, defend and hold harmless Lender
and its officers, directors, agents, employees (and the successors and assigns
of the foregoing) (the "LENDER INDEMNITEES") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for the Lender Indemnitees in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not the Lender
Indemnitees shall be designated a party thereto), that may be imposed on,
incurred by, or asserted against the Lender Indemnitees in any manner relating
to or arising out of (i) any breach by Borrower of its obligations under, or any
material misrepresentation by Borrower contained in, this Agreement or the other
Loan Documents, or (ii) the use or intended use of the proceeds of the Loan
(collectively, the "INDEMNIFIED LIABILITIES"); provided, however, that Borrower
shall not have any obligation to the Lender Indemnitees hereunder to the extent
that such Indemnified Liabilities arise from the bad faith, gross negligence,
illegal acts, fraud or willful misconduct of the Lender Indemnitees. To the
extent that the undertaking to indemnify, defend and hold harmless set forth in
the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to
pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Lender Indemnitees.
SECTION 11.14 SCHEDULES INCORPORATED.
The Schedules annexed hereto are hereby incorporated herein as
a part of this Agreement with the same effect as if set forth in the body
hereof.
SECTION 11.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.
Any assignee of Lender's interest in and to this Agreement and
the other Loan Documents shall take the same free and clear of all offsets,
counterclaims or defenses which are unrelated to such documents which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
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counterclaim or defense shall be interposed or asserted by Borrower in any
action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by Borrower.
SECTION 11.16 NO JOINT VENTURE OR PARTNERSHIP; NO THIRD PARTY
BENEFICIARIES.
(a) Borrower and Lender intend that the relationships created
hereunder and under the other Loan Documents be solely that of borrower and
lender. Nothing herein or therein is intended to create a joint venture,
partnership, tenancy in common, or joint tenancy relationship between Borrower
and Lender nor to grant Lender any interest in the Property other than that of
mortgagee, beneficiary or lender.
(b) This Agreement and the other Loan Documents are solely for
the benefit of Lender and nothing contained in this Agreement or the other Loan
Documents shall be deemed to confer upon anyone other than Lender or Borrower
any right to insist upon or to enforce the performance or observance of any of
the obligations contained herein or therein. All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and exclusively for the
benefit of Lender and no other Person shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make the Loan in the absence of strict
compliance with any or all thereof and no other Person shall under any
circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender's sole
discretion, Lender deems it advisable or desirable to do so.
SECTION 11.17 PUBLICITY.
All news releases, publicity or advertising by Borrower or its
Affiliates through any media intended to reach the general public which refers
to the Loan Documents or the financing evidenced by the Loan Documents, to
Lender or any of its Affiliates shall be subject to the prior written approval
of Lender. Borrower authorizes Lender to issue press releases, advertisements
and other promotional materials in connection with Lender's own promotional and
marketing activities, including in connection with a Secondary Market
Transaction, and such materials may describe the Loan in general terms or in
detail and Lender's participation therein in the Loan. All references to Lender
contained in any press release, advertisement or promotional material issued by
Borrower shall be reasonably approved in writing by Lender in advance of
issuance.
SECTION 11.18 WAIVER OF MARSHALLING OF ASSETS.
To the fullest extent permitted by law, Borrower, for itself
and its successors and assigns, waives all rights to a marshalling of the assets
of Borrower, Borrower's partners and others with interests in Borrower, and of
the Property, and shall not assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Property for the collection of the Debt without any
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prior or different resort for collection or of the right of Lender to the
payment of the Debt out of the net proceeds of the Property in preference to
every other claimant whatsoever.
SECTION 11.19 WAIVER OF OFFSETS/DEFENSES/COUNTERCLAIMS.
Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents or otherwise to offset any obligations to
make the payments required by the Loan Documents. No failure by Lender to
perform any of its obligations hereunder shall be a valid defense to, or result
in any offset against, any payments which Borrower is obligated to make under
any of the Loan Documents.
SECTION 11.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.
In the event of any conflict between the provisions of this
Agreement and any of the other Loan Documents, the provisions of this Agreement
shall control. The parties hereto acknowledge that they were represented by
competent counsel in connection with the negotiation, drafting and execution of
the Loan Documents and that such Loan Documents shall not be subject to the
principle of construing their meaning against the party which drafted them.
Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely
on its own judgment and advisors in entering into the Loan without relying in
any manner on any statements, representations or recommendations of Lender or
any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to
any limitation whatsoever in the exercise of any rights or remedies available to
it under any of the Loan Documents or any other agreements or instruments which
govern the Loan by virtue of the ownership by it or any parent, subsidiary or
Affiliate of Lender of any equity interest any of them may acquire in Borrower,
and Borrower hereby irrevocably waives the right to raise any defense or take
any action on the basis of the foregoing with respect to Lender's exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates.
SECTION 11.21 BROKERS AND FINANCIAL ADVISORS.
Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. Borrower shall
indemnify, defend and hold Lender harmless from and against any and all claims,
liabilities, costs and expenses of any kind (including Lender's attorneys' fees
and expenses) in any way relating to or arising from a claim by any Person that
such Person acted on behalf of Borrower or Lender in connection with the
transactions contemplated herein. The provisions of this Section 11.21 shall
survive the expiration and termination of this Agreement and the payment of the
Debt.
SECTION 11.22 EXCULPATION.
Subject to the qualifications below, Lender shall not enforce
the liability and obligation of Borrower to perform and observe the obligations
contained in the Note, this Agreement, the Mortgage or the other Loan Documents
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by any action or proceeding wherein a money judgment shall be sought against
Borrower, except that Lender may bring a foreclosure action, an action for
specific performance or any other appropriate action or proceeding to enable
Lender to enforce and realize upon its interest under the Note, this Agreement,
the Mortgage and the other Loan Documents, or in the Property, the Rents, or any
other collateral given to Lender pursuant to the Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents, Net Proceeds and in any other
collateral given to Lender, and Lender, by accepting the Note, this Agreement,
the Mortgage and the other Loan Documents, shall not sue for, seek or demand any
deficiency judgment against Borrower in any such action or proceeding under or
by reason of or under or in connection with the Note, this Agreement, the
Mortgage or the other Loan Documents. The provisions of this Section shall not,
however, (a) constitute a waiver, release or impairment of any obligation
evidenced or secured by any of the Loan Documents; (b) impair the right of
Lender to name Borrower as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of any guaranty made in connection with the Loan or any of the
rights and remedies of Lender thereunder; (d) impair the right of Lender to
obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment of Leases; (f) constitute a prohibition against Lender to seek a
deficiency judgment against Borrower in order to fully realize the security
granted by the Mortgage or to commence any other appropriate action or
proceeding in order for Lender to exercise its remedies against the Property; or
(g) constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Lender (including attorneys' fees and costs reasonably incurred) arising out of
or in connection with and Borrower shall be personally liable for the following:
(i) fraud or intentional misrepresentation by Borrower or any
guarantor in connection with the Loan;
(ii) the willful misconduct of Borrower;
(iii) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the
Mortgage concerning environmental laws, hazardous substances and
asbestos and any indemnification of Lender with respect thereto in
either document;
(iv) the removal or disposal of any portion of the Property
after an Event of Default;
(v) the misapplication or conversion by Borrower of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (B) any Awards or other amounts received in connection
with the Condemnation of all or a portion of the Property, or (C) any
Rents following an Event of Default or any Rents collected for more
than one month in advance to the extent such Rents or any other
payments in respect of the Leases and other income of the Property or
any other collateral are not applied to the costs of maintenance and
operation of the Property and to the payment of taxes, lien claims,
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insurance premiums, Debt Service and other amounts due under the Loan
Documents;
(vi) misappropriation or conversion of any security deposits,
advance deposits or any other deposits collected with respect to the
Property which are not delivered to Lender upon a foreclosure of the
Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and
conditions of any of the Leases prior to the occurrence of the Event of
Default that gave rise to such foreclosure or action in lieu thereof;
(vii) Borrower's failure to maintain insurance as required by
this Agreement or to pay any taxes or assessments affecting the
Property as required by this Agreement;
(viii) misappropriation, removal or disposal (except in the
ordinary course of Borrower's business) of any Personal Property (as
defined in the Mortgage) affixed to the Property which constitutes a
portion of the collateral for the Loan;
(ix) failure to pay any charges when due for labor or
materials that create Liens on the Property (to the extent net cash
flow from the Property is available for payment of such charges) unless
the same are being contested in accordance with this Agreement;
(x) failure to restore physical waste of the Property; or
(xi) Borrower fails to appoint a new property manager upon the
request of Lender after an Event of Default, as required by, and in
accordance with the terms and provisions of, this Agreement and the
Mortgage.
Notwithstanding anything to the contrary in this Agreement,
the Note or any of the Loan Documents, (A) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the Bankruptcy Code to file a claim for the full amount
of the Debt or to require that all collateral shall continue to secure all of
the Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt
shall be fully recourse to Borrower in the event that: (i) Borrower fails to
obtain Lender's prior consent to any subordinate financing or other voluntary
Lien encumbering the Property (other than Permitted Encumbrances); (ii) Borrower
fails to obtain Lender's prior consent to any Prohibited Transfer as required by
the Mortgage or this Agreement; (iii) Borrower files a voluntary petition under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;
(iv) an Affiliate which controls, directly or indirectly, Borrower files, or
joins in the filing of, an involuntary petition against Borrower under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or
solicits or causes to be solicited petitioning creditors for any involuntary
petition against Borrower from any Person; (v) Borrower files an answer
consenting to or otherwise acquiescing in or joining in any involuntary petition
filed against it, by any other Person under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law, or solicits or causes to be
solicited petitioning creditors for any involuntary petition from any Person;
(vi) any Affiliate which controls Borrower consents to or acquiesces in or joins
in an application for the appointment of a custodian, receiver, trustee, or
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examiner for Borrower or any portion of the Property; (vii) Borrower makes an
assignment for the benefit of creditors, or admits, in writing or in any legal
proceeding, its insolvency or inability to pay its debts as they become due; or
(viii) Borrower defaults in the observance or performance of any of its
obligations under Section 3.1.24.
SECTION 11.23 PRIOR AGREEMENTS.
This Agreement and the other Loan Documents contain the entire
agreement of the parties hereto and thereto in respect of the transactions
contemplated hereby and thereby, and all prior agreements among or between such
parties, whether oral or written, including, without limitation, the term sheet
dated September 30, 2004 between Borrower and Lender, are superseded by the
terms of this Agreement and the other Loan Documents.
SECTION 11.24 SERVICER.
(a) At the option of Lender, the Loan may be serviced by a
servicer (the "SERVICER") selected by Lender and Lender may delegate all or any
portion of its responsibilities under this Agreement and the other Loan
Documents to the Servicer pursuant to a servicing agreement (the "SERVICING
AGREEMENT") between Lender and Servicer. Borrower shall be responsible for any
reasonable set-up fees or any other initial costs relating to or arising under
the Servicing Agreement; provided, however, that Borrower shall not be
responsible for payment of the monthly servicing fee due to the Servicer under
the Servicing Agreement. Servicer shall, however, be entitled to reimbursement
of costs and expenses as and to the same extent (but without duplication) as
Lender is entitled thereto under the applicable provisions of this Agreement and
the other Loan Documents.
(b) Upon notice thereof from Lender, Servicer shall have the
right to exercise all rights of Lender and enforce all obligations of Borrower
pursuant to the provisions of this Agreement, the Note and the other Loan
Documents.
(c) Provided Borrower shall have been given notice of
Servicer's address by Lender, Borrower shall deliver to Servicer duplicate
originals of all notices and other instruments which Borrower may or shall be
required to deliver to Lender pursuant to this Agreement, the Note and the other
Loan Documents (and no delivery of such notices or other instruments by Borrower
shall be of any force or effect unless delivered to Lender and Servicer as
provided above).
SECTION 11.25 JOINT AND SEVERAL LIABILITY.
If more than one Person has executed this Agreement as
"Borrower," the representations, covenants, warranties and obligations of all
such Persons hereunder shall be joint and several.
SECTION 11.26 CREATION OF SECURITY INTEREST.
Notwithstanding any other provision set forth in this
Agreement, the Note, the Mortgage or any of the other Loan Documents, Lender may
at any time create a security interest in all or any portion of its rights under
this Agreement, the Note, the Mortgage and any other Loan Document (including,
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without limitation, the advances owing to it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 11.27 ASSIGNMENTS AND PARTICIPATIONS.
(a) The Lender may assign to one or more Persons all or a
portion of its rights and obligations under this Loan Agreement.
(b) Upon such execution and delivery, from and after the
effective date specified in such assignment, the assignee thereunder shall be a
party hereto and have the rights and obligations of Lender hereunder.
(c) Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.27, disclose to the assignee or participant or proposed assignee or
participant, as the case may be, any information relating to Borrower or any of
its Affiliates or to any aspect of the Loan that has been furnished to the
Lender by or on behalf of the Borrower or any of its Affiliates.
SECTION 11.28 SET-OFF.
In addition to any rights and remedies of Lender provided by
this Loan Agreement and by law, the Lender shall have the right, without prior
notice to Borrower, any such notice being expressly waived by Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Lender or any Affiliate thereof to or
for the credit or the account of Borrower. Lender agrees promptly to notify
Borrower after any such set-off and application made by Lender; provided that
the failure to give such notice shall not affect the validity of such set-off
and application.
SECTION 11.29 COMPONENT NOTES.
Lender, without in any way limiting Lender's other rights
hereunder, in its sole and absolute discretion, shall have the right at any time
to require Borrower to execute and deliver "component" notes (including senior
and junior notes) in replacement of the Note as evidence of the Loan, which
notes may be paid in such order of priority as may be designated by Lender,
provided that (i) the aggregate principal amount of such "component" notes shall
equal the outstanding principal balance of the Loan, (ii) the weighted average
interest rate of all such "component" notes shall on the date created equal the
interest rate which was applicable to the Loan, (iii) the Debt Service on all
such "component" notes shall on the date created equal the Debt Service which
was due under the Loan immediately prior to the creation of such component notes
and (iv) the other terms and provisions of each of the "component" notes shall
be identical in substance and substantially similar in form to the Loan
Documents. Borrower, at its cost and expense, shall cooperate with all
reasonable requests of Lender in order to establish the "component" notes and
shall execute and deliver such documents as shall reasonably be required by
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Lender and any Rating Agency in connection therewith, all in form and substance
reasonably satisfactory to Lender and satisfactory to any Rating Agency,
including, without limitation, the severance of security documents if requested.
In the event Borrower fails to execute and deliver such documents to Lender
within five (5) Business Days following such request by Lender, Borrower hereby
absolutely and irrevocably appoints Lender as its true and lawful attorney,
coupled with an interest, in its name and stead to make and execute all
documents necessary or desirable to effect such transactions, Borrower ratifying
all that such attorney shall do by virtue thereof subject to the limitations set
forth in this Section 11.29.
It shall be an Event of Default under this Agreement, the
Note, the Mortgage and the other Loan Documents if Borrower fails to comply with
any of the terms, covenants or conditions of this Section 11.29 within ten (10)
Business Days of notice thereof.
All legal fees and expenses incurred by Borrower in connection
with this Section 11.29 (including costs and expenses incurred by Borrower
pursuant to any requests made by Lender under Section 11.29) shall be paid by
Borrower except Borrower's legal fees.
SECTION 11.30 APPROVALS; THIRD PARTIES; CONDITIONS.
All approval rights retained or exercised by Lender with
respect to Leases, contracts, plans, studies and other matters are solely to
facilitate Lender's credit underwriting, and shall not be deemed or construed as
a determination that Lender has passed on the adequacy thereof for any other
purpose and may not be relied upon by Borrower or any other Person. This
Agreement is for the sole and exclusive use of Lender and Borrower and may not
be enforced, nor relied upon, by any Person other than Lender and Borrower. All
conditions of the obligations of Lender hereunder, including the obligation to
make advances, if any, are imposed solely and exclusively for the benefit of
Lender, its successors and assigns, and no other Person shall have standing to
require satisfaction of such conditions or be entitled to assume that Lender
will refuse to make advances in the absence of strict compliance with any or all
of such conditions, and no other Person shall, under any circumstances, be
deemed to be a beneficiary of such conditions, any and all of which may be
freely waived in whole or in part by Lender at any time in Lender's sole
discretion. SECTION
11.31 LIMITATION ON LIABILITY OF LENDER'S OFFICERS, EMPLOYEES,
ETC.
Any obligation or liability whatsoever of Lender which may
arise at any time under this Agreement or any other Loan Document shall be
satisfied, if at all, out of Lender's interest in the Property only. No such
obligation or liability shall be personally binding upon, nor shall resort for
the enforcement thereof be had to, the property of any of Lender's shareholders,
directors, officers, employees or agents, regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their duly authorized representatives, all as
of the day and year first above written.
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the
New York branch of a German
banking corporation
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: ____________________________________
Name: Brenda J. Walker
Title: Vice President
SCHEDULE I
----------
(RENT ROLL)
Schedule I
SCHEDULE II
-----------
<TABLE>
<CAPTION>
(REQUIRED REPAIRS)
PROPERTY REQUIRED REPAIR AMOUNT DEADLINE
---------------------- ----------------------------------- -------- --------
<S> <C> <C> <C>
Pavement Repairs Parking area cracks require repairs $3,500 1 year
Masonry Repairs Repair masonry control joints $2,500 1 year
Window Repairs Re-caulk storefront windows $2,500 1 year
Roof Repairs Investigate and repair roof $2,500 1 year
Sprinkler Head Repairs Resolve sprinkler head deficiencies $7,250 1 year
per Massachusetts code
Exposure Protection Add Applebee Tenant sprinkler heads $4,500 1 year
Standpipe Separation Separate standpipe hose valves from $13,000 1 year
sprinkler system in Buildings J and
1100
Exterior Alarms Add exterior audible alarms $3,200 1 year
Control Valves Add sprinkler control valves $2,000 1 year
Fire Pump Bearings Add fire pump bearing $500 1 year
Electrical Panel Infrared scan and maintain electric $3,000 1 year
panels
Electric Code Violation An electrical should verify the fire $1,500 1 year
pump feeder is not tapped
</TABLE>
Schedule II
SCHEDULE III
------------
(ORGANIZATIONAL CHART)
Schedule III
SCHEDULE IV
-----------
EUROHYPO AG, NEW YORK BRANCH
(Lender)
- and -
----------------------------
(Tenant)
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
Dated:
Location:
Section:
Block:
Lot:
County:
PREPARED BY AND UPON
RECORDATION RETURN TO:
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
File No.:
Title No.:
Schedule IV- Page 9
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON DISTURBANCE AND ATTORNMENT AGREEMENT
(this "AGREEMENT") is made as of the ____ day of _______________, 20__ by and
between EUROHYPO AG, NEW YORK BRANCH, the New York branch of a German banking
corporation, having an address at 1114 Avenue of the Americas, Twenty-Ninth
Floor, New York, New York 10036 ("LENDER"), and
____________________________________ ____________, having an address at
________________________________________________ ("TENANT").
RECITALS:
A. Lender has made a loan in the approximate amount of
$_______ to Landlord (defined below), which Loan is given pursuant to the terms
and conditions of that certain Loan Agreement dated ________________, 20__,
between Lender and Landlord (the "LOAN AGREEMENT"). The Loan is evidenced by a
certain Promissory Note dated ________________, 20__, given by Landlord to
Lender (the "NOTE") and secured by a certain [Mortgage][Deed of Trust] and
Security Agreement dated ______________, 20__, given by Landlord to Lender (the
"MORTGAGE"), which encumbers the fee estate of Landlord in certain premises
described in Exhibit A attached hereto (the "PROPERTY");
B. Tenant occupies a portion of the Property under and
pursuant to the provisions of a certain lease dated _________________, ____
between _________________, as landlord ("LANDLORD") and Tenant, as tenant (the
"LEASE"); and
C. Tenant has agreed to subordinate the Lease to the
Mortgage and to the lien thereof and Lender has agreed to grant non-disturbance
to Tenant under the Lease on the terms and conditions hereinafter set forth.
AGREEMENT:
For good and valuable consideration, Tenant and Lender agree
as follows:
1. Subordination. Tenant agrees that the Lease and all of the
terms, covenants and provisions thereof and all rights, remedies and options of
Tenant thereunder are and shall at all times continue to be subject and
subordinate in all respects to the Mortgage and to the lien thereof and all
terms, covenants and conditions set forth in the Mortgage and the Loan Agreement
including without limitation all renewals, increases, modifications, spreaders,
consolidations, replacements and extensions thereof and to all sums secured
thereby with the same force and effect as if the Mortgage and Loan Agreement had
been executed, delivered and (in the case of the Mortgage) recorded prior to the
execution and delivery of the Lease.
2. Non-Disturbance. Lender agrees that if any action or
proceeding is commenced by Lender for the foreclosure of the Mortgage or the
sale of the Property, Tenant shall not be named as a party therein unless such
joinder shall be required by law, provided, however, such joinder shall not
result in the termination of the Lease or disturb the Tenant's possession or use
Schedule IV-Page 2
of the premises demised thereunder, and the sale of the Property in any such
action or proceeding and the exercise by Lender of any of its other rights under
the Note, the Mortgage and the Loan Agreement shall be made subject to all
rights of Tenant under the Lease, provided that at the time of the commencement
of any such action or proceeding or at the time of any such sale or exercise of
any such other rights (a) the term of the Lease shall have commenced pursuant to
the provisions thereof, (b) Tenant shall be in possession of the premises
demised under the Lease, (c) the Lease shall be in full force and effect and (d)
Tenant shall not be in default under any of the terms, covenants or conditions
of the Lease or of this Agreement on Tenant's part to be observed or performed
beyond the expiration of any applicable notice or grace periods.
3. Attornment. Lender and Tenant agree that upon the
conveyance of the Property by reason of the foreclosure of the Mortgage or the
acceptance of a deed or assignment in lieu of foreclosure or otherwise, the
Lease shall not be terminated or affected thereby (at the option of the
transferee of the Property (the "TRANSFEREE") if the conditions set forth in
Section 2 above have not been met at the time of such transfer) but shall
continue in full force and effect as a direct lease between the Transferee and
Tenant upon all of the terms, covenants and conditions set forth in the Lease
and in that event, Tenant agrees to attorn to the Transferee and the Transferee
shall accept such attornment, provided, however, that the provisions of the
Mortgage and the Loan Agreement shall govern with respect to the disposition of
any casualty insurance proceeds or condemnation awards and the Transferee shall
not be (a) obligated to complete any construction work required to be done by
Landlord pursuant to the provisions of the Lease or to reimburse Tenant for any
construction work done by Tenant, (b) liable (i) for Landlord's failure to
perform any of its obligations under the Lease which have accrued prior to the
date on which the Transferee shall become the owner of the Property, or (ii) for
any act or omission of Landlord, whether prior to or after such foreclosure or
sale, (c) required to make any repairs to the Property or to the premises
demised under the Lease required as a result of fire, or other casualty or by
reason of condemnation unless the Transferee shall be obligated under the Lease
to make such repairs and shall have received sufficient casualty insurance
proceeds or condemnation awards to finance the completion of such repairs, (d)
required to make any capital improvements to the Property or to the premises
demised under the Lease which Landlord may have agreed to make, but had not
completed, or to perform or provide any services not related to possession or
quiet enjoyment of the premises demised under the Lease, (e) subject to any
offsets, defenses, abatements or counterclaims which shall have accrued to
Tenant against Landlord prior to the date upon which the Transferee shall become
the owner of the Property, (f) liable for the return of rental security
deposits, if any, paid by Tenant to Landlord in accordance with the Lease unless
such sums are actually received by the Transferee, (g) bound by any payment of
rents, additional rents or other sums which Tenant may have paid more than one
(1) month in advance to any prior Landlord unless (i) such sums are actually
received by the Transferee or (ii) such prepayment shall have been expressly
approved of by the Transferee, (h) bound to make any payment to Tenant which was
required under the Lease, or otherwise, to be made prior to the time the
Transferee succeeded to Landlord's interest, (i) bound by any agreement
amending, modifying or terminating the Lease made without the Lender's prior
written consent prior to the time the Transferee succeeded to Landlord's
interest or (j) bound by any assignment of the Lease or sublease of the
Property, or any portion thereof, made prior to the time the Transferee
succeeded to Landlord's interest other than if pursuant to the provisions of the
Lease.
Schedule IV-Page 3
4. Notice to Tenant. After notice is given to Tenant by Lender
that the Landlord is in default under the Note and the Mortgage and that the
rentals under the Lease should be paid to Lender pursuant to the terms of the
assignment of leases and rents executed and delivered by Landlord to Lender in
connection therewith, Tenant shall thereafter pay to Lender or as directed by
the Lender, all rentals and all other monies due or to become due to Landlord
under the Lease and Landlord hereby expressly authorizes Tenant to make such
payments to Lender and hereby releases and discharges Tenant from any liability
to Landlord on account of any such payments.
5. Lender's Consent. Tenant shall not, without obtaining the
prior written consent of Lender, (a) enter into any agreement amending,
modifying or terminating the Lease, (b) prepay any of the rents, additional
rents or other sums due under the Lease for more than one (1) month in advance
of the due dates thereof, (c) voluntarily surrender the premises demised under
the Lease or terminate the Lease without cause or shorten the term thereof, or
(d) assign the Lease or sublet the premises demised under the Lease or any part
thereof other than pursuant to the provisions of the Lease; and any such
amendment, modification, termination, prepayment, voluntary surrender,
assignment or subletting, without Lender's prior consent, shall not be binding
upon Lender.
6. Lender to Receive Notices. Tenant shall provide Lender with
copies of all written notices sent to Landlord pursuant to the Lease
simultaneously with the transmission of such notices to the Landlord. Tenant
shall notify Lender of any default by Landlord under the Lease which would
entitle Tenant to cancel the Lease or to an abatement of the rents, additional
rents or other sums payable thereunder, and agrees that, notwithstanding any
provisions of the Lease to the contrary, no notice of cancellation thereof or of
such an abatement shall be effective unless Lender shall have received notice of
default giving rise to such cancellation or abatement and shall have failed
within sixty (60) days after receipt of such notice to cure such default, or if
such default cannot be cured within sixty (60) days, shall have failed within
sixty (60) days after receipt of such notice to commence and thereafter
diligently pursue any action necessary to cure such default.
7. Notices. All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person or by facsimile transmission with receipt acknowledged by
the recipient thereof and confirmed by telephone by sender, (ii) one (1)
Business Day (hereinafter defined) after having been deposited for overnight
delivery with any reputable overnight courier service, or (iii) three (3)
Business Days after having been deposited in any post office or mail depository
regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
If to Tenant:
_____________________________
_____________________________
_____________________________
Attention: _________________
Facsimile No.: _____________
Schedule IV-Page 4
If to Lender:
Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Facsimile No.: (212) 479-5800
With a copy to:
Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Facsimile No.: (212) 479-5800
With a copy to:
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
or addressed as such party may from time to time designate by written notice to
the other parties. For purposes of this Section, the term "BUSINESS DAY" shall
mean a day on which commercial banks are not authorized or required by law to
close in New York, New York.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
8. Joint and Several Liability. If Tenant consists of more
than one person, the obligations and liabilities of each such person hereunder
shall be joint and several. This Agreement shall be binding upon and inure to
the benefit of Lender and Tenant and their respective successors and assigns.
9. Definitions. The term "LENDER" as used herein shall include
the successors and assigns of Lender and any person, party or entity which shall
become the owner of the Property by reason of a foreclosure of the Mortgage or
the acceptance of a deed or assignment in lieu of foreclosure or otherwise. The
term "LANDLORD" as used herein shall mean and include the present landlord under
the Lease and such landlord's predecessors and successors in interest under the
Lease, but shall not mean or include Lender. The term "PROPERTY" as used herein
shall mean the Property, the improvements now or hereafter located thereon and
the estates therein encumbered by the Mortgage.
Schedule IV-Page 5
10. No Oral Modifications. This Agreement may not be modified
in any manner or terminated except by an instrument in writing executed by the
parties hereto.
11. Governing Law. This Agreement shall be deemed to be a
contract entered into pursuant to the laws of the State where the Property is
located and shall in all respects be governed, construed, applied and enforced
in accordance with the laws of the State where the Property is located.
12. Inapplicable Provisions. If any term, covenant or
condition of this Agreement is held to be invalid, illegal or unenforceable in
any respect, this Agreement shall be construed without such provision.
13. Duplicate Originals; Counterparts. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
14. Number and Gender. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
15. Transfer of Loan. Lender may sell, transfer and deliver
the Note and assign the Mortgage, this Agreement and the other documents
executed in connection therewith to one or more investors in the secondary
mortgage market ("INVESTORS"). In connection with such sale, Lender may retain
or assign responsibility for servicing the loan, including the Note, the
Mortgage, this Agreement and the other documents executed in connection
therewith, or may delegate some or all of such responsibility and/or obligations
to a servicer including, but not limited to, any subservicer or master servicer,
on behalf of the Investors. All references to Lender herein shall refer to and
include any such servicer to the extent applicable.
16. Further Acts. Tenant will, at the cost of Tenant, and
without expense to Lender, do, execute, acknowledge and deliver all and every
such further acts and assurances as Lender shall, from time to time, require,
for the better assuring and confirming unto Lender the property and rights
hereby intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of this Agreement or for filing,
registering or recording this Agreement, or for complying with all applicable
laws.
17. Limitations on Lender's Liability. Tenant acknowledges
that Lender is obligated only to Landlord to make the Loan upon the terms and
subject to the conditions set forth in the Loan Agreement. In no event shall
Lender or any purchaser of the Property at foreclosure sale or any grantee of
the Property named in a deed-in-lieu of foreclosure, nor any heir, legal
representative, successor, or assignee of Lender or any such purchaser or
grantee (collectively the Lender, such purchaser, grantee, heir, legal
representative, successor or assignee, the "SUBSEQUENT LANDLORD") have any
personal liability for the obligations of Landlord under the Lease and should
the Subsequent Landlord succeed to the interests of the Landlord under the
Schedule IV-Page 6
Lease, Tenant shall look only to the estate and property of any such Subsequent
Landlord in the Property for the satisfaction of Tenant's remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by any Subsequent Landlord as landlord under
the Lease, and no other property or assets of any Subsequent Landlord shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to the Lease; provided, however, that
the Tenant may exercise any other right or remedy provided thereby or by law in
the event of any failure by Subsequent Landlord to perform any such material
obligation.
Schedule IV-Page 7
IN WITNESS WHEREOF, Lender and Tenant have duly executed this
Agreement as of the date first above written.
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the
New York branch of a German
banking corporation
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
TENANT:
_________________________________
a _________________
By:_____________________________
Name:
Title:
The undersigned accepts and agrees to
the provisions of Section 4 hereof:
LANDLORD:
______________________, a
____________________________
Schedule IV-Page 8
By:________________________________
Name:
Title:
Schedule IV-Page 9
ACKNOWLEDGMENTS
[INSERT STATE SPECIFIC ACKNOWLEDGMENT]
Schedule IV-Page 10
EXHIBIT A
LEGAL DESCRIPTION
Schedule IV-Page 11
SCHEDULE V
(DESCRIPTION OF REA)
INTENTIONALLY DELETED
Schedule. V
SCHEDULE VI
(DESCRIPTION/DIAGRAM OF RELEASE PARCEL)
Schedule. V
EXHIBIT 10.14
PROMISSORY NOTE
$43,500,000.00 Port Washington, New York
November 1, 2004
FOR VALUE RECEIVED CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited
liability company, as maker, having its principal place of business at c/o Cedar
Shopping Centers Partnership, L.P., 44 South Bayles Avenue, Suite 304, Port
Washington, NY 11050 ("Borrower"), hereby unconditionally promises to pay to the
order of EUROHYPO AG, NEW YORK BRANCH, the New York branch of a German banking
corporation, as lender, having an address at 1114 Avenue of the Americas,
Twenty-Ninth Floor, New York, New York 10036 ("Lender"), or at such other place
as the holder hereof may from time to time designate in writing, the principal
sum of FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($43,500,000.00) in lawful money of the United States of America, with interest
thereon to be computed from the date of this Note at the Interest Rate, and to
be paid in accordance with the terms of this Note and that certain Loan
Agreement dated the date hereof between Borrower and Lender (the "Loan
Agreement"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement.
ARTICLE 1: PAYMENT TERMS
Borrower agrees to pay the principal sum of this Note and interest on
the unpaid principal sum of this Note from time to time outstanding at the rates
and at the times specified in Article II of the Loan Agreement and the
outstanding balance of the principal sum of this Note and all accrued and unpaid
interest thereon shall be due and payable on the Maturity Date.
ARTICLE 2: DEFAULT AND ACCELERATION
The Debt shall without notice become immediately due and payable at the
option of Lender if any payment required in this Note is not paid on or prior to
the date when due or if not paid on the Maturity Date or on the happening of any
other Event of Default.
ARTICLE 3: LOAN DOCUMENTS
This Note is secured by the Mortgage and the other Loan Documents. All
of the terms, covenants and conditions contained in the Loan Agreement, the
Mortgage and the other Loan Documents are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth herein.
ARTICLE 4: SAVINGS CLAUSE
Notwithstanding anything to the contrary, (a) all agreements between
Borrower and Lender are hereby and shall automatically be limited so that, after
taking into account all amounts deemed interest, the interest contracted for,
charged or received by Lender shall never exceed the maximum lawful rate or
amount, (b) in calculating whether any interest exceeds the lawful maximum, all
such interest shall be amortized, prorated, allocated and spread over the full
amount and term of all principal indebtedness of Borrower to Lender, and (c) if
through any contingency or event, Lender receives or is deemed to receive
interest in excess of the lawful maximum, any such excess shall be deemed to
have been applied toward payment of the principal of any and all then
outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.
ARTICLE 5: NO ORAL CHANGE
This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
ARTICLE 6: WAIVERS
Borrower and all others who may become liable for the payment of all or
any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, notice of intention to accelerate, notice of
acceleration, protest and notice of protest and non-payment and all other
notices of any kind, other than notices required in accordance with the Loan
Documents or applicable law. No release of any security for the Debt or
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of this Note, the Loan
Agreement or the other Loan Documents made by agreement between Lender or any
other Person shall release, modify, amend, waive, extend, change, discharge,
terminate or affect the liability of Borrower or any other Person who may become
liable for the payment of all or any part of the Debt under this Note, the Loan
Agreement or the other Loan Documents. No notice to or demand on Borrower shall
be deemed to be a waiver of the obligation of Borrower or of the right of Lender
to take further action without further notice or demand as provided for in this
Note, the Loan Agreement or the other Loan Documents. If Borrower is a
partnership or limited liability company, the agreements herein contained shall
remain in force and be applicable, notwithstanding any changes in the
individuals comprising the partnership or limited liability company, and the
term "Borrower," as used herein, shall include any alternate or successor
partnership or limited liability company, but any predecessor partnership or
limited liability company and their partners or members shall not thereby be
released from any liability. If Borrower is a corporation, the agreements
contained herein shall remain in full force and be applicable notwithstanding
any changes in the shareholders comprising, or the officers and directors
relating to, the corporation, and the term "Borrower," as used herein, shall
include any alternative or successor corporation, but any predecessor
corporation shall not be relieved of liability hereunder. (Nothing in the
foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such partnership,
limited liability company or corporation, which may be set forth in the Loan
Agreement, the Mortgage or any other Loan Document.)
-2-
ARTICLE 7: TRANSFER
Upon the transfer of this Note, Borrower hereby waiving notice of any
such transfer, Lender may deliver all the collateral mortgaged, granted, pledged
or assigned pursuant to the Loan Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under
applicable law given to Lender with respect thereto, and Lender shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter, to the extent first arising after such transfer; but Lender shall
retain all rights hereby given to it with respect to any liabilities and the
collateral not so transferred.
ARTICLE 8: EXCULPATION
The provisions of Section 11.22 of the Loan Agreement are hereby
incorporated by reference into this Note to the same extent and with the same
force as if fully set forth herein.
ARTICLE 9: GOVERNING LAW
THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER
AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
-3-
ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS NOTE MAY AT LENDER'S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO
SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
STUART H. WIDOWSKI
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE
OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT
SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH
SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE
PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
ARTICLE 10: NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 11.6 of the Loan Agreement.
[NO FURTHER TEXT ON THIS PAGE]
-4-
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day
and year first above written.
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _______________________
Name: Brenda J. Walker
Title: Vice President
EXHIBIT 10.15
================================================================================
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company, as mortgagor
(Borrower)
to
EUROHYPO AG, NEW YORK BRANCH, as mortgagee
(Lender)
--------------------------
MORTGAGE AND
SECURITY AGREEMENT
--------------------------
Dated: As of November 1, 2004
Location: Franklin, Massachusetts
County: Norfolk
PREPARED BY AND UPON
RECORDATION RETURN TO:
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
================================================================================
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (this "SECURITY INSTRUMENT") is
made as of this 1st day of November, 2004, by CEDAR-FRANKLIN VILLAGE LLC, a
Delaware limited liability company, having its principal place of business at
c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles Avenue, Suite 304,
Port Washington, NY 11050, as mortgagor ("BORROWER") for the benefit of EUROHYPO
AG, NEW YORK BRANCH, the New York branch of a German banking corporation, having
an address at 1114 Avenue of the Americas, Twenty-Ninth Floor, New York, New
York 10036, as mortgagee ("LENDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Security Instrument is given to secure a loan (the
"LOAN") in the principal sum of FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($43,500,000.00) pursuant to that certain Loan Agreement dated as
of the date hereof between Borrower and Lender (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
"LOAN AGREEMENT") and evidenced by that certain Promissory Note dated the date
hereof made by Borrower to Lender (such Note, together with all extensions,
renewals, replacements, restatements or modifications thereof being hereinafter
referred to as the "NOTE");
WHEREAS, Borrower desires to secure the payment of the Debt (as defined
in the Loan Agreement) and the performance of all of its obligations under the
Note, the Loan Agreement and the other Loan Documents; and
WHEREAS, this Security Instrument is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions, agreements,
indemnities, representations and warranties of the parties therein, are hereby
incorporated by reference herein as though set forth in full and shall be
considered a part of this Security Instrument (the Loan Agreement, the Note,
this Security Instrument, that certain Assignment of Leases and Rents of even
date herewith made by Borrower in favor of Lender (the "ASSIGNMENT OF LEASES")
and all other documents evidencing or securing the Debt or delivered in
connection with the making of the Loan are hereinafter referred to collectively
as the "LOAN DOCUMENTS").
NOW THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Security Instrument:
Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Lender and its successors and
assigns the following property, rights, interests and estates now owned, or
hereafter acquired by Borrower (collectively, the "PROPERTY"): \
(a) Land. The real property described in Exhibit A attached hereto and
made a part hereof (the "LAND");
(b) Additional Land. All additional lands, estates and development
rights hereafter acquired by Borrower for use in connection with the Land and
the development of the Land and all additional lands and estates therein which
may, from time to time, by supplemental mortgage or otherwise be expressly made
subject to the lien of this Security Instrument;
(c) Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (collectively, the
"IMPROVEMENTS");
(d) Easements. All easements, rights-of-way or use, rights, strips and
gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;
(e) Equipment. All "equipment," as such term is defined in Article 9 of
the Uniform Commercial Code (as hereinafter defined), now owned or hereafter
acquired by Borrower, which is used at or in connection with the Improvements or
the Land or is located thereon or therein (including, but not limited to, all
machinery, equipment, furnishings, and electronic data-processing and other
office equipment now owned or hereafter acquired by Borrower and any and all
additions, substitutions and replacements of any of the foregoing), together
with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto (collectively, the "EQUIPMENT"). Notwithstanding the
foregoing, Equipment shall not include any property belonging to tenants under
leases except to the extent that Borrower shall have any right or interest
therein;
(f) Fixtures. All Equipment now owned, or the ownership of which is
hereafter acquired, by Borrower which is so related to the Land and Improvements
forming part of the Property that it is deemed fixtures or real property under
the law of the particular state in which the Equipment is located, including,
without limitation, all building or construction materials intended for
construction, reconstruction, alteration or repair of or installation on the
Property, construction equipment, appliances, machinery, plant equipment,
fittings, apparatuses, fixtures and other items now or hereafter attached to,
installed in or used in connection with (temporarily or permanently) any of the
Improvements or the Land, including, but not limited to, engines, devices for
the operation of pumps, pipes, plumbing, cleaning, call and sprinkler systems,
fire extinguishing apparatuses and equipment, heating, ventilating, plumbing,
-2-
laundry, incinerating, electrical, air conditioning and air cooling equipment
and systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds, and water, gas,
electrical, storm and sanitary sewer facilities, utility lines and equipment
(whether owned individually or jointly with others, and, if owned jointly, to
the extent of Borrower's interest therein) and all other utilities whether or
not situated in easements, all water tanks, water supply, water power sites,
fuel stations, fuel tanks, fuel supply, and all other structures, together with
all accessions, appurtenances, additions, replacements, betterments and
substitutions for any of the foregoing and the proceeds thereof (collectively,
the "FIXTURES"). Notwithstanding the foregoing, "Fixtures" shall not include any
property which tenants are entitled to remove pursuant to leases except to the
extent that Borrower shall have any right or interest therein;
(g) Personal Property. All furniture, furnishings, objects of art,
machinery, goods, tools, supplies, appliances, general intangibles, contract
rights, accounts, accounts receivable, franchises, licenses, certificates and
permits, and all other personal property of any kind or character whatsoever (as
defined in and subject to the provisions of the Uniform Commercial Code as
hereinafter defined), other than Fixtures, which are now or hereafter owned by
Borrower and which are located within or about the Land and the Improvements,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof (collectively, the "PERSONAL PROPERTY"), and
the right, title and interest of Borrower in and to any of the Personal Property
which may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states where any of the
Property is located (the "UNIFORM COMMERCIAL CODE"), superior in lien to the
lien of this Security Instrument and all proceeds and products of the above;
(h) Leases and Rents. All leases and other agreements affecting the
use, enjoyment or occupancy of the Land and the Improvements heretofore or
hereafter entered into, whether before or after the filing by or against
Borrower of any petition for relief under 11 U.S.C. ss.101 et seq., as the same
may be amended from time to time (the "BANKRUPTCY CODE") (collectively, the
"LEASES") and all right, title and interest of Borrower, its successors and
assigns therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of
their obligations thereunder and all rents, additional rents, revenues, issues
and profits (including all oil and gas or other mineral royalties and bonuses)
from the Land and the Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (collectively, the "RENTS") and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment of the Debt;
(i) Condemnation Awards. All awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;
(j) Insurance Proceeds. All proceeds in respect of the Property under
any insurance policies covering the Property, which are required by Lender under
the Loan Agreement, including, without limitation, the right to receive and
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apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Property;
(k) Tax Certiorari. All refunds, rebates or credits in connection with
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;
(l) Rights. The right, in the name and on behalf of Borrower, to appear
in and defend any action or proceeding brought with respect to the Property and
to commence any action or proceeding to protect the interest of Lender in the
Property;
(m) Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or respecting any business or
activity conducted on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including, without limitation, the
right, upon the happening of any default hereunder, to receive and collect any
sums payable to Borrower thereunder;
(n) Trademarks. All tradenames, trademarks, servicemarks, logos,
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property;
(o) Proceeds. All proceeds of any of the foregoing, including, without
limitation, proceeds of insurance and condemnation awards, whether cash,
liquidation or other claims or otherwise; and
(p) Other Rights. Any and all other rights of Borrower in and to the
items set forth in Subsections (a) through (o) above.
AND without limiting any of the other provisions of this Security
Instrument, to the extent permitted by applicable law, Borrower expressly grants
to Lender, as secured party, a security interest in the portion of the Property
which is or may be subject to the provisions of the Uniform Commercial Code
which are applicable to secured transactions; it being understood and agreed
that the Improvements and Fixtures are part and parcel of the Land (the Land,
the Improvements and the Fixtures collectively referred to as the "REAL
PROPERTY") appropriated to the use thereof and, whether affixed or annexed to
the Real Property or not, shall for the purposes of this Security Instrument be
deemed conclusively to be real estate and mortgaged hereby.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and
unconditionally assigns to Lender all of Borrower's right, title and interest in
and to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of
the Assignment of Leases and Section 7.1(h) of this Security Instrument, Lender
grants to Borrower a revocable license to collect, receive, use and enjoy the
Rents. Borrower shall hold the Rents, or a portion thereof sufficient to
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discharge all current sums due on the Debt, for use in the payment of such sums.
Section 1.3 SECURITY AGREEMENT. This Security Instrument is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations (hereinafter
defined), a security interest in the Fixtures, the Equipment, the Personal
Property and other property constituting the Property to the full extent that
the Fixtures, the Equipment, the Personal Property and such other property may
be subject to the Uniform Commercial Code (said portion of the Property so
subject to the Uniform Commercial Code being called the "COLLATERAL"). If an
Event of Default shall occur and be continuing, Lender, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Collateral. Upon request or
demand of Lender after the occurrence and during the continuance of an Event of
Default, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place (at the Land if tangible property)
reasonably acceptable to Lender. Borrower shall pay to Lender on demand any and
all expenses, including reasonable legal expenses and attorneys' fees, incurred
or paid by Lender in protecting its interest in the Collateral and in enforcing
its rights hereunder with respect to the Collateral after the occurrence and
during the continuance of an Event of Default. Any notice of sale, disposition
or other intended action by Lender with respect to the Collateral sent to
Borrower in accordance with the provisions hereof at least ten (10) business
days prior to such action, shall, except as otherwise provided by applicable
law, constitute reasonable notice to Borrower. The proceeds of any disposition
of the Collateral, or any part thereof, may, except as otherwise required by
applicable law, be applied by Lender to the payment of the Debt in such priority
and proportions as Lender in its discretion shall deem proper. The principal
place of business of Borrower (Debtor) is as set forth on page one hereof and
the address of Lender (Secured Party) is as set forth on page one hereof.
Section 1.4 FIXTURE FILING. Certain of the Property is or will become
"fixtures" (as that term is defined in the Uniform Commercial Code) on the Land,
described or referred to in this Security Instrument, and this Security
Instrument, upon being filed for record in the real estate records of the city
or county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions
of said Uniform Commercial Code upon such of the Property that is or may become
fixtures.
Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to Lender
any and all monies now or hereafter held by Lender or on behalf of Lender in
connection with the Loan, including, without limitation, any sums deposited in
the Accounts (as defined in the Cash Management Agreement) and Net Proceeds, as
additional security for the Obligations until expended or applied as provided in
this Security Instrument.
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CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto and
to the use and benefit of Lender and its successors and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note, the Loan Agreement and this Security Instrument,
shall well and truly perform the Other Obligations as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, the Loan Agreement and
the other Loan Documents, these presents and the estate hereby granted shall
cease, terminate and be void; provided, however, that Borrower's obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall
survive any such payment or release.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Security Instrument and the grants, assignments
and transfers made in Article 1 are given for the purpose of securing the Debt.
Section 2.2 OTHER OBLIGATIONS. This Security Instrument and the grants,
assignments and transfers made in Article 1 are also given for the purpose of
securing the following (the "OTHER OBLIGATIONS"):
(a) the performance of all other obligations of Borrower contained
herein;
(b) the performance of each obligation of Borrower contained in the
Loan Agreement and any other Loan Document; and
(c) the performance of each obligation of Borrower contained in any
renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Note, the Loan Agreement
or any other Loan Document.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations for the
payment of the Debt and the performance of the Other Obligations shall be
referred to collectively herein as the "OBLIGATIONS."
Article 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time and
in the manner provided in the Loan Agreement, the Note and this Security
Instrument.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants, conditions
and agreements contained in (a) the Loan Agreement, (b) the Note and (c) all and
any of the other Loan Documents, are hereby made a part of this Security
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Instrument to the same extent and with the same force as if fully set forth
herein.
Section 3.3 INSURANCE. Borrower shall obtain and maintain, or cause to
be maintained, in full force and effect at all times, insurance with respect to
Borrower and the Property in the form and amounts as required pursuant to the
Loan Agreement.
Section 3.4 MAINTENANCE OF PROPERTY. Borrower shall cause the Property
to be maintained in a good and safe condition and repair. Subject to the Loan
Agreement, the Improvements, the Fixtures, the Equipment and the Personal
Property shall not be removed, demolished or materially altered (except for
normal replacement of the Fixtures, the Equipment or the Personal Property,
tenant finish and refurbishment of the Improvements) without the consent of
Lender. Subject to the Loan Agreement, Borrower shall promptly repair, replace
or rebuild any part of the Property which may be destroyed by any Casualty or
become damaged, worn or dilapidated or which may be affected by any
Condemnation, and shall complete and pay for any structure at any time in the
process of construction or repair on the Land.
Section 3.5 WASTE. Borrower shall not commit or suffer any physical
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy, or do or permit to be done thereon anything that
may in any way materially impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.6 PAYMENT FOR LABOR AND MATERIALS. (a) Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials ("LABOR AND MATERIAL COSTS") incurred in connection with
the Property and never permit to exist beyond the due date thereof in respect of
the Property or any part thereof any lien or security interest, even though
inferior to the liens and the security interests hereof, and in any event never
permit to be created or exist in respect of the Property or any part thereof any
other or additional lien or security interest other than the liens or security
interests hereof except for the Permitted Encumbrances.
(b) After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any of the Labor and Material Costs, provided that (i) no
Event of Default has occurred and is continuing under the Loan Agreement, the
Note, this Security Instrument or any of the other Loan Documents, (ii) Borrower
is permitted to do so under the provisions of any other mortgage, deed of trust
or deed to secure debt affecting the Property, (iii) such proceeding shall
suspend the collection of the Labor and Material Costs from Borrower and from
the Property or Borrower shall have paid all of the Labor and Material Costs
under protest, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (v) neither the Property
nor any part thereof or interest therein will be in danger of being sold,
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forfeited, terminated, canceled or lost, and (vi) Borrower shall have furnished
the security as may be required in the proceeding, or as may be reasonably
requested by Lender to insure the payment of any contested Labor and Material
Costs, together with all interest and penalties thereon.
Section 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and
perform each and every term, covenant and provision to be observed or performed
by Borrower pursuant to the Loan Agreement, any other Loan Document and any
other agreement or recorded instrument affecting or pertaining to the Property
and any amendments, modifications or changes thereto.
Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall not
change Borrower's name, identity (including its trade name or names) or, if not
an individual, Borrower's corporate, partnership or other structure without
first (a) notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change, (b) taking all action required by
Lender for the purpose of perfecting or protecting the lien and security
interest of Lender and (c) in the case of a change in Borrower's structure,
without first obtaining the prior written consent of Lender; provided, however
that in connection with any such change in Borrower's name or corporate identity
Borrower shall have no obligation to pay to Lender a transfer fee. Borrower
shall promptly notify Lender in writing of any change in its organizational
identification number. If Borrower does not now have an organizational
identification number and later obtains one, Borrower shall promptly notify
Lender in writing of such organizational identification number. Borrower shall
execute and deliver to Lender, prior to or contemporaneously with the effective
date of any such change, any financing statement or financing statement change
required by Lender to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of Lender,
Borrower shall execute a certificate in form satisfactory to Lender listing the
trade names under which Borrower intends to operate the Property, and
representing and warranting that Borrower does business under no other trade
name with respect to the Property.
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of any of the Loan Agreement, the Note, this Security Instrument and
the other Loan Documents shall be construed so as to deem the relationship
between Borrower and Lender to be other than that of debtor and creditor.
Section 4.2 NO RELIANCE ON LENDER. The general partners, members,
principals and (if Borrower is a trust) beneficial owners of Borrower are
experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 4.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the provisions
of Subsections 1.1(h) and (m) or Section 1.2, Lender is not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations
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with respect to such agreements, contracts, certificates, instruments,
franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Security
Instrument, the Loan Agreement, the Note or the other Loan Documents, including,
without limitation, any officer's certificate, balance sheet, statement of
profit and loss or other financial statement, survey, appraisal, or insurance
policy, Lender shall not be deemed to have warranted, consented to, or affirmed
the sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
Section 4.4 RELIANCE. Borrower recognizes and acknowledges that in
accepting the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, Lender is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in Article III of the
Loan Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Lender; that such reliance
existed on the part of Lender prior to the date hereof, that the warranties and
representations are a material inducement to Lender in making the Loan; and that
Lender would not be willing to make the Loan and accept this Security Instrument
in the absence of the warranties and representations as set forth in Article III
of the Loan Agreement.
Article 5 - FURTHER ASSURANCES
Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument and any of the other Loan
Documents creating a lien or security interest or evidencing the lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Note, this Security Instrument, the other Loan
Documents, any note, deed of trust or mortgage supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and any modification or amendment of the foregoing documents, and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this Security
Instrument, any deed of trust or mortgage supplemental hereto, any security
instrument with respect to the Property or any instrument of further assurance,
and any modification or amendment of the foregoing documents, except where
prohibited by law so to do.
Section 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, notices of assignments, transfers and assurances as Lender shall,
from time to time, reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender the property and rights
hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
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be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Security Instrument or for filing, registering or recording
this Security Instrument, or for complying with all Legal Requirements; provided
that the obligations of Borrower under the Loan Documents are not materially
increased and Borrower's rights under the Loan Documents are not decreased.
Borrower, on demand, will execute and deliver, and in the event it shall fail to
so execute and deliver, hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements (including, without limitation, initial
financing statements and amendments thereto and continuation statements) with or
without the signature of Borrower as authorized by applicable law, to evidence
more effectively the security interest of Lender in the Property. Borrower also
ratifies its authorization for Lender to have filed any like initial financing
statements, amendments thereto and continuation statements, if filed prior to
the date of this Security Instrument. During the continuance of an Event of
Default, Borrower grants to Lender an irrevocable power of attorney coupled with
an interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without limitation
such rights and remedies available to Lender pursuant to this Section 5.2. To
the extent not prohibited by applicable law, Borrower hereby ratifies all acts
Lender has lawfully done in the past or shall lawfully do or cause to be done in
the future by virtue of such power of attorney.
Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any. If Lender is advised by counsel chosen by it that
the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury then Lender shall have
the option by written notice of not less than one hundred twenty (120) days to
declare the Debt immediately due and payable, without prepayment penalty or
premium.
(b) Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this Security Instrument
or the Debt. If such claim, credit or deduction shall be required by law, Lender
shall have the option, by written notice of not less than one hundred twenty
(120) days, to declare the Debt immediately due and payable, without prepayment
penalty or premium.
(c) If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument, or any of the other Loan
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
Section 5.4 SPLITTING OF MORTGAGE. This Security Instrument and the
Note shall, at any time until the same shall be fully paid and satisfied, at the
sole election and cost of Lender, be split or divided into two or more notes and
two or more security instruments, each of which shall cover all or a portion of
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the Property to be more particularly described therein. To that end, Borrower,
upon written request of Lender, shall execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered by the then owner of the Property, to
Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount of the Note, and containing terms, provisions and clauses
identical to those contained herein and in the Note, and such other documents
and instruments as may be required by Lender; provided that the interest rate
set forth in any notes shall be the same as the interest rate provided in the
Note, the economic terms and Maturity Date of the notes are identical to those
in the Note, the obligations of Borrower under the Loan Documents shall not be
increased and Borrower's rights under the Loan Documents shall not be decreased.
Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record, and, in the case of
any such mutilation, upon surrender and cancellation of such Note or other Loan
Document, Borrower will issue, in lieu thereof, a replacement Note or other Loan
Document, dated the date of such lost, stolen, destroyed or mutilated Note or
other Loan Document in the same principal amount thereof and otherwise of like
tenor.
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender has
examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the performance of the Other Obligations. Borrower acknowledges that Lender has
a valid interest in maintaining the value of the Property so as to ensure that,
should Borrower default in the repayment of the Debt or the performance of the
Other Obligations, Lender can recover the Debt by a sale of the Property.
Section 6.2 NO TRANSFER . Borrower shall not permit or suffer any
Transfer to occur, unless specifically permitted by Article 8 of the Loan
Agreement or unless Lender shall consent thereto in writing.
Section 6.3 TRANSFER DEFINED. Subject to Section 8 of the Loan
Agreement, as used in this Article 6 "TRANSFER" shall mean any voluntary or
involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of: (a) all or any part of the Property or any estate or
interest therein including, but not be limited to, (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part thereof for a
price to be paid in installments, (ii) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder and its affiliates or (iii) a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower's right, title and
interest in and to any Leases or any Rents; or (b) any ownership interest in (i)
Borrower or (ii) any indemnitor or guarantor of any Obligations or (iii) any
corporation, partnership, limited liability company, trust or other entity
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owning, directly or indirectly, any interest in Borrower or any indemnitor or
guarantor of any Obligations.
Section 6.4 LENDER'S RIGHTS. Except as otherwise provided in Section 8
of the Loan Agreement, without obligating Lender to grant any consent under
Section 6.2 hereof which Lender may grant or withhold in its sole discretion,
Lender reserves the right to condition the consent required hereunder upon (a) a
modification of the terms hereof and of the Loan Agreement, the Note or the
other Loan Documents; (b) an assumption of the Loan Agreement, the Note, this
Security Instrument and the other Loan Documents as so modified by the proposed
transferee, subject to the provisions of Section 11.22 of the Loan Agreement;
(c) payment of all of Lender's expenses actually incurred in connection with
such transfer; (d) the confirmation in writing by the applicable Rating Agencies
that the proposed transfer will not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned in connection with any Securitization; (e) the delivery of a
nonconsolidation opinion reflecting the proposed transfer satisfactory in form
and substance to Lender; (f) the proposed transferee's continued compliance with
the representations and covenants set forth in Section 3.1.24 and 4.2.8 of the
Loan Agreement; (g) the delivery of evidence satisfactory to Lender that the
single purpose nature and bankruptcy remoteness of Borrower, its shareholders,
partners or members, as the case may be, following such transfers are in
accordance with the standards of the Rating Agencies; (h) the proposed
transferee's ability to satisfy Lender's then-current underwriting standards; or
(i) such other conditions as Lender shall determine in its reasonable discretion
to be in the interest of Lender, including, without limitation, the
creditworthiness, reputation and qualifications of the transferee with respect
to the Loan and the Property. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon a Transfer without
Lender's consent. This provision shall apply to every Transfer, other than any
Transfer permitted pursuant to the Loan Agreement, regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
Transfer.
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES. Upon the occurrence and during the continuance of
any Event of Default, Borrower agrees that Lender may take such action, without
notice or demand, as it deems advisable to protect and enforce its rights
against Borrower and in and to the Property, including, but not limited to, the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Lender:
(a) declare the entire unpaid Debt to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument under any applicable provision of law,
in which case the Property or any interest therein may be sold for cash or upon
credit in one or more parcels or in several interests or portions and in any
order or manner;
(c) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Security Instrument for the portion of the Debt then due and
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payable, subject to the continuing lien and security interest of this Security
Instrument for the balance of the Debt not then due, unimpaired and without loss
of priority;
(d) sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof as may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Note, the Loan Agreement or in the other Loan Documents;
(f) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Security Instrument or the other Loan
Documents;
(g) apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Debt and without regard for the solvency of Borrower,
any guarantor, indemnitor with respect to the Loan or of any Person liable for
the payment of the Debt;
(h) the license granted to Borrower under Section 1.2 hereof shall
automatically be revoked and Lender may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess Borrower and
its agents and servants therefrom, without liability for trespass, damages or
otherwise and exclude Borrower and its agents or servants wholly therefrom, and
take possession of all books, records and accounts relating thereto and Borrower
agrees to surrender possession of the Property and of such books, records and
accounts to Lender upon demand, and thereupon Lender may (i) use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal with all
and every part of the Property and conduct the business thereat; (ii) complete
any construction on the Property in such manner and form as Lender deems
advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise, including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, sue for, collect and
receive all Rents of the Property and every part thereof; (v) require Borrower
to pay monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Property as may be occupied by Borrower; (vi) require Borrower to
vacate and surrender possession of the Property to Lender or to such receiver
and, in default thereof, Borrower may be evicted by summary proceedings or
otherwise; and (vii) apply the receipts from the Property to the payment of the
Debt, in such order, priority and proportions as Lender shall deem appropriate
in its sole discretion after deducting therefrom all expenses (including
reasonable attorneys' fees) incurred in connection with the aforesaid operations
and all amounts necessary to pay the Taxes, Other Charges, insurance and other
expenses in connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and employees;
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(i) exercise any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing: (i) the right to take possession of the Fixtures,
the Equipment and the Personal Property, or any part thereof, and to take such
other measures as Lender may deem necessary for the care, protection and
preservation of the Fixtures, the Equipment and the Personal Property, and (ii)
request Borrower at its expense to assemble the Fixtures, the Equipment and the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended action
by Lender with respect to the Fixtures, the Equipment and/or the Personal
Property sent to Borrower in accordance with the provisions hereof at least five
(5) days prior to such action, shall constitute commercially reasonable notice
to Borrower;
(j) apply any sums then deposited or held in escrow or otherwise by or
on behalf of Lender in accordance with the terms of the Loan Agreement, this
Security Instrument or any other Loan Document to the payment of the following
items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of the Note;
(iv) intentionally omitted;
(v) All other sums payable pursuant to the Note, the Loan
Agreement, this Security Instrument and the other Loan Documents,
including without limitation advances made by Lender pursuant to the
terms of this Security Instrument;
(k) pursue such other remedies as Lender may have under applicable law;
or
(l) apply the undisbursed balance of any Net Proceeds Deficiency
deposit, together with interest thereon, to the payment of the Debt in such
order, priority and proportions as Lender shall deem to be appropriate in its
discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Security Instrument shall continue as a lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
Section 7.2 APPLICATION OF PROCEEDS. The purchase money, proceeds and
avails of any disposition of the Property, and or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
other Loan Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper.
Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and during the
continuance of any Event of Default, Lender may, but without any obligation to
do so and without notice to or demand on Borrower and without releasing Borrower
from any obligation hereunder, make or do the same in such manner and to such
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extent as Lender may deem necessary to protect the security hereof. Lender is
authorized to enter upon the Property for such purposes, or appear in, defend,
or bring any action or proceeding to protect its interest in the Property or to
foreclose this Security Instrument or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees to the extent permitted by law),
with interest as provided in this Section 7.3, shall constitute a portion of the
Debt and shall be due and payable to Lender upon demand. All such costs and
expenses incurred by Lender in remedying such Event of Default or in appearing
in, defending, or bringing any such action or proceeding shall bear interest at
the Default Rate, for the period after notice from Lender that such cost or
expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.
Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to appear in
and defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in
the Property.
Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable times and
upon reasonable notice, Lender, its agents, accountants and attorneys shall have
the right to examine the records, books, management and other papers of Borrower
which reflect upon its financial condition, at the Property or at any office
regularly maintained by Borrower where the books and records are located. Lender
and its agents shall have the right to make copies and extracts from the
foregoing records and other papers. In addition, at reasonable times and upon
reasonable notice, Lender, its agents, accountants and attorneys shall have the
right to examine and audit the books and records of Borrower pertaining to the
income, expenses and operation of the Property during reasonable business hours
at any office of Borrower where the books and records are located. This Section
7.6 shall apply throughout the term of the Note and without regard to whether an
Event of Default has occurred or is continuing, provided that any entry and
inspection hereunder shall be conducted in a manner designed to minimize
interference with Borrower or the operation of the Property.
Section 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Security Instrument. Borrower shall not be relieved of Borrower's
obligations hereunder by reason of (i) the failure of Lender to comply with any
request of Borrower or any guarantor or indemnitor with respect to the Loan to
take any action to foreclose this Security Instrument or otherwise enforce any
of the provisions hereof or of the Note or the other Loan Documents, (ii) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof, or (iii) any
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agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security Instrument or
the other Loan Documents.
(b) It is agreed that the risk of loss or damage to the Property is on
Borrower, and Lender shall have no liability whatsoever for decline in value of
the Property, for failure to maintain the Policies, or for failure to determine
whether insurance in force is adequate as to the amount of risks insured.
Possession by Lender shall not be deemed an election of judicial relief, if any
such possession is requested or obtained, with respect to any Property or
collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other security
held by Lender in such order and manner as Lender, in its discretion, may elect.
Lender may take action to recover the Debt, or any portion thereof, or to
enforce any covenant hereof without prejudice to the right of Lender thereafter
to foreclose this Security Instrument. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.
Section 7.9 VIOLATION OF LAWS. If the Property is not in material
compliance with Legal Requirements and such noncompliance results in a Material
Adverse Effect, Lender may impose additional requirements upon Borrower in
connection herewith including, without limitation, monetary reserves or
financial equivalents.
Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding any other
provision of this Security Instrument or the Loan Agreement, including, without
limitation, Section 11.22 of the Loan Agreement, Lender and other Indemnified
Parties (as hereinafter defined) are entitled to enforce the obligations of
Borrower, any guarantor and indemnitor contained in Sections 9.2 and 9.3 herein
without first resorting to or exhausting any security or collateral and without
first having recourse to the Note or any of the Property, through foreclosure or
acceptance of a deed in lieu of foreclosure or otherwise, and in the event
Lender commences a foreclosure action against the Property, Lender is entitled
to pursue a deficiency judgment with respect to such obligations against
Borrower and any guarantor or indemnitor with respect to the Loan. The
provisions of Sections 9.2 and 9.3 herein are exceptions to any non-recourse or
exculpation provisions in the Loan Agreement, the Note, this Security Instrument
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or the other Loan Documents, and Borrower and any guarantor or indemnitor with
respect to the Loan are fully and personally liable for the obligations pursuant
to Sections 9.2 and 9.3 herein. The liability of Borrower and any guarantor or
indemnitor with respect to the Loan pursuant to Sections 9.2 and 9.3 herein is
not limited to the original principal amount of the Note. Notwithstanding the
foregoing, nothing herein shall inhibit or prevent Lender from foreclosing or
exercising any other rights and remedies pursuant to the Loan Agreement, the
Note, this Security Instrument and the other Loan Documents, whether
simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower pursuant to
Sections 9.2 and 9.3 herein, whether or not action is brought against any other
Person or whether or not any other Person is joined in the action or actions. In
addition, Lender shall have the right but not the obligation to join and
participate in, as a party if it so elects, any administrative or judicial
proceedings or actions initiated in connection with any matter addressed in the
Environmental Indemnity.
Section 7.11 RIGHT OF ENTRY. Upon reasonable notice to Borrower, Lender
and its agents shall have the right to enter and inspect the Property at all
reasonable times.
Article 8 - INTENTIONALLY OMITTED
Article 9 - INDEMNIFICATION
Section 9.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, expenses, judgments, awards, amounts paid in settlement, (including but
not limited to reasonable attorneys' fees and other costs of defense)
(collectively, the "LOSSES") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following, except to the extent caused by the
gross negligence, willful misconduct or bad faith by an Indemnified Party of any
of the Loan Documents: (a) ownership of this Security Instrument, the Property
or any interest therein or receipt of any Rents; (b) any amendment to, or
restructuring of, the Debt, and the Note, the Loan Agreement, this Security
Instrument, or any other Loan Documents; (c) any and all lawful action that may
be taken by Lender in connection with the enforcement of the provisions of this
Security Instrument or the Loan Agreement or the Note or any of the other Loan
Documents, whether or not suit is filed in connection with same, or in
connection with Borrower, any guarantor or indemnitor and/or any partner, joint
venturer or shareholder thereof becoming a party to a voluntary or involuntary
federal or state bankruptcy, insolvency or similar proceeding; (d) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (e) any use,
nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (f) any failure on the part of Borrower to perform or be in compliance
with any of the terms of this Security Instrument; (g) performance of any labor
or services or the furnishing of any materials or other property in respect of
the Property or any part thereof; (h) the failure of any person to file timely
with the Internal Revenue Service an accurate Form 1099-B, Statement for
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Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with this Security Instrument,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds
of the transaction in connection with which this Security Instrument is made;
(i) any failure of the Property to be in compliance with any Legal Requirements;
(j) the enforcement by any Indemnified Party of the provisions of this Article
9; (k) any and all claims and demands whatsoever which may be asserted against
Lender by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease; (1) the payment of any commission, charge or brokerage fee to anyone
claiming through Borrower which may be payable in connection with the funding of
the Loan; or (m) any misrepresentation made by Borrower in this Security
Instrument or any other Loan Document. Any amounts payable to Lender by reason
of the application of this Section 9.1 shall become immediately due and payable
and shall bear interest at the Default Rate from the date loss or damage is
sustained by Lender until paid. For purposes of this Article 9, the term
"INDEMNIFIED PARTIES" means Lender and any Person who is or will have been
involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan secured hereby, any Person in whose name
the encumbrance created by this Security Instrument is or will have been
recorded, persons and entities who may hold or acquire or will have held a full
or partial interest in the Loan secured hereby (including, but not limited to,
investors or prospective investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or partial interest
in the Loan secured hereby for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, employees, agents,
servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not limited to any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender's assets
and business).
Section 9.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the other Loan Documents, but
excluding any withholding, income, franchise or other similar taxes.
Section 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
reasonable attorneys' fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the
sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 3.1.8 or 4.2.8 of the Loan Agreement.
Section 9.4 INTENTIONALLY OMITTED.
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Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals reasonably approved
by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in
any such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that a
conflict exists, such Indemnified Party shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such Indemnified Party, provided that no
compromise or settlement shall be entered without Borrower's consent, which
consent shall not be unreasonably withheld. Upon demand, Borrower shall pay or,
in the sole and absolute discretion of the Indemnified Parties, reimburse, the
Indemnified Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and other
professionals actually incurred in connection therewith.
Article 10 - WAIVERS
Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted by
applicable law, Borrower hereby waives the right to assert a counterclaim, other
than a mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with this Security
Instrument, the Loan Agreement, the Note, any of the other Loan Documents, or
the Obligations; provided, however, that such waiver shall not preclude
borrower' assertion of such claims in a separate action against Lender.
Section 10.2 MARSHALLING AND OTHER MATTERS. To the extent permitted by
applicable law, Borrower hereby waives the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Security Instrument on behalf of Borrower, and on
behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.
Section 10.3 WAIVER OF NOTICE. To the extent permitted by applicable
law, Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Security Instrument and the
other Loan Documents specifically and expressly provides for the giving of
notice by Lender to Borrower and except with respect to matters for which Lender
is required by applicable law to give notice, and Borrower hereby expressly
waives the right to receive any notice from Lender with respect to any matter
for which this Security Instrument does not specifically and expressly provide
for the giving of notice by Lender to Borrower.
Section 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent permitted
by applicable law, Borrower hereby expressly waives and releases to the fullest
extent permitted by law, the pleading of any statute of limitations as a defense
to payment of the Debt or performance of its Other Obligations.
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Section 10.5 SURVIVAL. The indemnifications made pursuant to Section
9.3 herein and, subject to the provisions of the Environmental Indemnity, the
representations and warranties, covenants, and other obligations arising under
the Environmental Indemnity arising during the period of time Borrower owns the
Property, shall continue indefinitely in full force and effect and shall survive
and shall in no way be impaired by: any satisfaction or other termination of
this Security Instrument, any assignment or other transfer of all or any portion
of this Security Instrument or Lender's interest in the Property (but, in such
case, shall benefit both Indemnified Parties and any assignee or transferee),
any exercise of Lender's rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Loan Agreement, the Note or
any of the other Loan Documents, any transfer of all or any portion of the
Property (whether by Borrower or by Lender following foreclosure or acceptance
of a deed in lieu of foreclosure or at any other time), any amendment to this
Security Instrument, the Loan Agreement, the Note or the other Loan Documents,
and any act or omission that might otherwise be construed as a release or
discharge of Borrower from the obligations pursuant hereto.
Article 11 - EXCULPATION
The provisions of Section 11.22 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
Article 12 - NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 11.6 of the Loan Agreement.
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW. (A) THIS SECURITY INSTRUMENT WAS NEGOTIATED
IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED
FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY
INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF
CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT
OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE
OTHER LOAN DOCUMENTS WITH RESPECT TO THE PROPERTY SHALL BE GOVERNED BY AND
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CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS,
AND THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
Section5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT
STUART H. WIDOWSKI
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
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OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 13.2 USURY LAWS. Notwithstanding anything to the contrary, (a)
all agreements and communications between Borrower and Lender are hereby and
shall automatically be limited so that, after taking into account all amounts
deemed interest, the interest contracted for, charged or received by Lender
shall never exceed the maximum lawful rate or amount, (b) in calculating whether
any interest exceeds the lawful maximum, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of Borrower to Lender, and (c) if through any contingency or event,
Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of Borrower to
Lender, or if there is no such indebtedness, shall immediately be returned to
Borrower.
Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid or
unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
Article 14 - DEFINITIONS
All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Security Instrument may be used interchangeably in singular or plural form
and the word "BORROWER" shall mean "each Borrower and any subsequent owner or
owners of the Property or any part thereof or any interest therein," the word
"LENDER" shall mean "Lender and any subsequent holder of the Note," the word
"NOTE" shall mean "the Note and any other evidence of indebtedness secured by
this Security Instrument," the word "PROPERTY" shall include any portion of the
Property and any interest therein, and the phrases "ATTORNEYS' FEES", "LEGAL
FEES" and "COUNSEL FEES" shall include any and all attorneys', paralegal and law
clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder.
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
-22-
Section 15.2 SUCCESSORS AND ASSIGNS. This Security Instrument shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is held to
be invalid, illegal or unenforceable in any respect, the Loan Agreement, the
Note and this Security Instrument shall be construed without such provision.
Section 15.4 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.
Section 15.5 NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section 15.6 SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Loan Agreement, the
Note and the other Loan Documents and the performance and discharge of the Other
Obligations.
Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement, this
Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior written
or oral understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents.
Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY. No provision of
this Security Instrument shall operate to place any obligation or liability for
the control, care, management or repair of the Property upon Lender, nor shall
it operate to make Lender responsible or liable for any waste committed on the
Property by the tenants or any other Person, or for any dangerous or defective
condition of the Property, or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee or stranger until such time as Lender or its designee
takes title to the Property. Nothing herein contained shall be construed as
constituting Lender a "mortgagee in possession."
-23-
Article 16 - MASSACHUSETTS -SPECIFIC PROVISIONS
Section 16.1 PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and conditions of this Article 16 and the
other terms and conditions of this Security Instrument, the terms and conditions
of this Article 16 shall control and be binding.
Section 16.2 BORROWER'S INTEREST IN THE PROPERTY. Borrower has good and
marketable fee simple title to the Property. Borrower will preserve its interest
in and title to the Property and will forever defend same.
Section 16.3 STATUTORY POWER OF SALE.
(a) This Mortgage is intended to constitute: (i) a mortgage deed under
Massachusetts General Laws c. 183, ss.18, (ii) a security agreement and
financing statement under the Uniform Commercial Code as enacted in the
Commonwealth of Massachusetts, and (iii) a notice of assignment of rents or
profits under Massachusetts General Laws c. 183 ss.4. This Mortgage is also
intended to operate and be construed as an absolute present assignment of the
rents, issues and profits of the Property, Borrower hereby agreeing, as provided
for in Massachusetts General Laws c. 183, ss.26, that Lender is entitled to
receive the rents, issues and profits of the Property prior to an Event of
Default and without entering upon or taking possession of the Property.
(b) This Mortgage is granted by Borrower WITH MORTGAGE COVENANTS and
upon the STATUTORY CONDITION and upon the further condition that all covenants
and agreements on the part of the Borrower herein undertaken shall be kept and
fully and seasonably performed and that no breach of any other of the conditions
specified herein shall be permitted, for any breach of which conditions, the
Lender shall have the STATUTORY POWER OF SALE.
Section 16.4 SALE OR OTHER DISPOSITION OF THE PROPERTY. Any sale or
other disposition of the Property may be at public or private sale, to the
extent such private sale is authorized under the provisions of the Uniform
Commercial Code as enacted in the Commonwealth of Massachusetts, upon such terms
and in such manner as Lender deems advisable. Lender may conduct any such sale
or other disposition of the Property upon the Premises, in which event Borrower
shall not be liable for any rent or charge for such use of the Premises. Lender
may purchase the Property, or any portion of it, at any sale held under this
Section. With respect to any of the property comprising the Property to be sold
pursuant to the Uniform Commercial Code, Lender shall give Borrower at least
seven (7) days written notice of the date, time, and place of any proposed
public sale, or such additional notice as may be required under the laws of the
Commonwealth of Massachusetts, and of the date after which any private sale or
other disposition may be made. Lender may sell any of the Property as part of
the Premises and Improvements comprising the Property, or any portion or unit
thereof, at the foreclosure sale or sales conducted pursuant hereto. If the
provisions of the Uniform Commercial Code are applicable to any part of the
Property which is to be sold in combination with or as part of the Premises and
Improvements comprising the Property, or any part thereof, at one or more
foreclosure sales, any notice required under such provisions shall be fully
satisfied by the notice given in execution of the STATUTORY POWER OF SALE with
respect to the Lender's right, title and interest in and to Premises and
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Improvements or any part thereof. Borrower's waives any right to require the
marshaling of any of its assets in connection with any disposition conducted
pursuant hereto. In the event all or part of the Property is included at any
foreclosure sale conducted pursuant hereto, a single total price for the
Property, or such part thereof as is sold, may be accepted by Lender with no
obligation to distinguish between the application of such proceeds amongst the
property comprising the Property.
[NO FURTHER TEXT ON THIS PAGE]
-25-
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower as of the day and year first above written.
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Brenda J. Walker
Title: Vice President
STATE OF _____________ )
) ss.
COUNTY OF ___________ )
Then personally appeared before me the above-named Brenda J. Walker,
the Vice President of Cedar Shopping Centers, Inc., a Maryland corporation,
general partner of Cedar Shopping Centers Partnership, L.P., a Delaware limited
liability company, sole member of Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, sole member of Cedar-Franklin Village LLC, a Delaware
limited liability company and said Brenda J. Walker acknowledged that the
foregoing instrument was signed and sealed on behalf of said limited liability
company, and that said instrument was her free act and deed and the free act and
deed of said limited liability company.
----------------------------------------
Notary Public
My Commission Expires:
-----------------
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT 10.16
================================================================================
CEDAR-FRANKLIN VILLAGE LLC, as assignor
(Borrower)
to
EUROHYPO AG, NEW YORK BRANCH, as assignee
(Lender)
-------------------------
ASSIGNMENT
OF LEASES AND RENTS
-------------------------
Dated: As of November 1, 2004
Location: Franklin, Massachusetts
County: Norfolk
PREPARED BY AND UPON
RECORDATION RETURN TO:
Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
================================================================================
THIS ASSIGNMENT OF LEASES AND RENTS (this "ASSIGNMENT") made as of the
1st day of November, 2004, by CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited
liability company, as assignor, having its principal place of business at c/o
Cedar Shopping Centers Partnership, L.P., 44 South Bayles Avenue, Suite 304,
Port Washington, NY 11050 ("BORROWER") to EUROHYPO AG, NEW YORK BRANCH, the New
York branch of a German banking corporation, as assignee, having an address at
1114 Avenue of the Americas, Twenty-Ninth Floor, New York, New York 10036
("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Assignment is given in connection with a loan in the
principal sum of FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($43,500,000.00) (the "LOAN") made by Lender to Borrower pursuant to that
certain Loan Agreement dated as of the date hereof (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
"LOAN AGREEMENT") and evidenced by that certain Promissory Note dated the date
hereof made by Borrower to Lender (as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the "NOTE");
WHEREAS, the Note is secured by that certain Mortgage and Security
Agreement dated the date hereof (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the "MORTGAGE") made by
Borrower for the benefit of Lender; and
WHEREAS, Borrower desires to further secure the payment of the Debt (as
defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents.
NOW THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Assignment:
ARTICLE 1 - ASSIGNMENT
Section 1.1 PROPERTY ASSIGNED. Borrower hereby absolutely and
unconditionally assigns and grants to Lender the following property, rights,
interests and estates, now owned, or hereafter acquired by Borrower (the
"ASSIGNED PROPERTY"):
(A) LEASES. All existing and future "leases" and "lease provisions" (as
described in Exhibit B annexed hereto and made a part hereof) affecting the use,
enjoyment, or occupancy of all or any part of that certain lot or piece of land,
more particularly described in Exhibit A annexed hereto and made a part hereof,
or all or any part of the buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter located thereon (collectively, the "PROPERTY") and the right,
title and interest of Borrower, its successors and assigns, therein and
thereunder.
(B) OTHER LEASES AND AGREEMENTS. All other leases and other agreements,
whether or not in writing, affecting the use, enjoyment or occupancy of the
Property or any portion thereof now or hereafter made, whether made before or
after the filing by or against Borrower of any petition for relief under 11
U.S.C. ss. 101 et seq., as the same may be amended from time to time (the
"BANKRUPTCY CODE") together with any extension, renewal or replacement of the
same, this Assignment of other present and future leases and present and future
agreements being effective without further or supplemental assignment. The
"leases" and the "lease provisions" described in Subsection 1.1(a) and the
leases and other agreements described in this Subsection 1.1(b) are collectively
referred to as the "LEASES".
(C) RENTS. All "rents" (as described in Exhibit B annexed hereto and
made a part hereof) whether paid or accruing before or after the filing by or
against Borrower of any petition for relief under the Bankruptcy Code
(collectively, the "RENTS").
(D) BANKRUPTCY CLAIMS. All of Borrower's claims and rights (the
"BANKRUPTCY CLAIMS") to the payment of damages arising from any rejection by a
lessee of any Lease under the Bankruptcy Code and to the maximum extent
permissible under the Bankruptcy Code and/or all other applicable federal, state
and local laws, the right to reject or confirm Leases in any bankruptcy
proceeding of the Borrower or relating to the Property.
(E) LEASE GUARANTIES. All of Borrower's right, title and interest in
and claims under any and all lease guaranties, letters of credit and any other
credit support (individually, a "LEASE GUARANTY", collectively, the "LEASE
GUARANTIES") given by any guarantor in connection with any of the Leases or
leasing commissions (individually, a "LEASE GUARANTOR", collectively, the "LEASE
GUARANTORS") to Borrower.
(F) PROCEEDS. All proceeds from the sale or other disposition of the
Leases, the Rents, the Lease Guaranties and the Bankruptcy Claims.
(G) OTHER. All rights, powers, privileges, options and other benefits
of Borrower as lessor under the Leases and beneficiary under the Lease
Guaranties, including without limitation the immediate and continuing right to
make claim for, receive, collect and receipt for all Rents payable or receivable
under the Leases and all sums payable under the Lease Guaranties or pursuant
thereto (and to apply the same to the payment of the Debt or the Other
Obligations), and to do all other things which Borrower or any lessor is or may
become entitled to do under the Leases or the Lease Guaranties.
(H) ENTRY. The right, at Lender's option, upon revocation of the
license granted herein, to enter upon the Property in person, by agent or by
court-appointed receiver, to collect the Rents.
(I) POWER OF ATTORNEY. Upon an uncured Event of Default, Borrower's
irrevocable power of attorney, coupled with an interest, to take any and all of
the actions set forth in Section 3.1 and 3.5 of this Assignment and any or all
other actions designated by Lender for the proper management and preservation of
the Property.
-3-
(J) OTHER RIGHTS AND AGREEMENTS. Any and all other rights of Borrower
in and to the items set forth in subsections (a) through (i) above, and all
amendments, modifications, replacements, renewals and substitutions thereof.
ARTICLE 2 - TERMS OF ASSIGNMENT
Section 2.1 PRESENT ASSIGNMENT AND LICENSE BACK. It is intended by
Borrower that this Assignment constitute a present, absolute assignment of the
Assigned Property, and not an assignment for additional security only.
Nevertheless, subject to the terms of this Section 2.1 and the Cash Management
Agreement, Lender grants to Borrower a revocable license to collect, receive,
use and enjoy the Rents, as well as other sums due under or arising from the
Assigned Property and to otherwise take all actions with respect to the Assigned
Property not expressly prohibited under the Loan Documents. Borrower shall hold
the Rents, as well as all sums received pursuant to or arising from any Assigned
Property, or a portion thereof sufficient to discharge all current sums due on
the Debt, in trust for the benefit of Lender for use in the payment of such
sums.
Section 2.2 NOTICE TO LESSEES. Borrower hereby authorizes and directs
the lessees named in the Leases or any other future lessees or occupants of the
Property and all Lease Guarantors to pay over to Lender or to such other party
as Lender directs all Rents and all sums due under or arising from any Assigned
Property upon receipt from Lender of written notice to the effect that Lender is
then the holder of this Assignment and that an Event of Default (as defined in
the Loan Agreement) exists, and to continue so to do until otherwise notified by
Lender.
Section 2.3 INCORPORATION BY REFERENCE. All representations,
warranties, covenants, conditions and agreements contained in the Loan Agreement
and the other Loan Documents as same may be modified, renewed, substituted or
extended are hereby made a part of this Assignment to the same extent and with
the same force as if fully set forth herein.
ARTICLE 3 - REMEDIES
Section 3.1 REMEDIES OF LENDER. For so long as an Event of Default
exists, the license granted to Borrower in Section 2.1 of this Assignment shall
automatically be revoked, and Lender shall immediately be entitled to possession
of all Rents and sums due under or arising from any Assigned Property, whether
or not Lender enters upon or takes control of the Property. In addition, Lender
may, at its option, without waiving such Event of Default, without regard to the
adequacy of the security for the Debt, either in person or by agent, nominee or
attorney, with or without bringing any action or proceeding, or by a receiver
appointed by a court, dispossess Borrower and its agents and servants from the
Property, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of the
Property and all books, records and accounts relating thereto and have, hold,
manage, lease and operate the Property on such terms and for such period of time
as Lender may deem proper and either with or without taking possession of the
Property in its own name, demand, sue for or otherwise collect and receive all
Rents and sums due under or arising from all Assigned Property, including those
past due and unpaid with full power to make from time to time all alterations,
-4-
renovations, repairs or replacements thereto or thereof as Lender may deem
proper and may apply the Rents and sums received pursuant to or arising from any
Assigned Property to the payment of the following in such order and proportion
as Lender in its sole discretion may determine, any law, custom or use to the
contrary notwithstanding: (a) all expenses of managing and securing the
Property, including, without being limited thereto, the salaries, fees and wages
of a managing agent and such other employees or agents as Lender may deem
necessary or desirable and all expenses of operating and maintaining the
Property, including, without being limited thereto, all taxes, charges, claims,
assessments, water charges, sewer rents and any other liens, and premiums for
all insurance which Lender may deem necessary or desirable, and the cost of all
alterations, renovations, repairs or replacements, and all expenses incident to
taking and retaining possession of the Property; and (b) the Debt, together with
all costs and reasonable attorneys' fees. In addition, upon the occurrence and
during the continuation of an Event of Default, Lender, at its option, may (1)
complete any construction on the Property in such manner and form as Lender
deems advisable, (2) exercise all rights and powers of Borrower, including,
without limitation, the right to negotiate, execute, cancel, enforce or modify
Leases or any related guarantees, obtain and evict tenants, and demand, sue for,
collect and receive all Rents from the Property and all sums due under or
arising from any Assigned Property, (3) either require Borrower to pay monthly
in advance to Lender, or any receiver appointed to collect the Rents, the fair
and reasonable rental value for the use and occupancy of such part of the
Property as may be in possession of Borrower or (4) require Borrower to vacate
and surrender possession of the Property to Lender or to such receiver and, in
default thereof, Borrower may be evicted by summary proceedings or otherwise.
Section 3.2 OTHER REMEDIES. Nothing contained in this Assignment and no
act done or omitted by Lender pursuant to the power and rights granted to Lender
hereunder shall be deemed to be a waiver by Lender of its rights and remedies
under the Loan Agreement, the Note, or the other Loan Documents and this
Assignment is made and accepted without prejudice to any of the rights and
remedies possessed by Lender under the terms thereof. The right of Lender to
collect the Debt and to enforce any other security therefor held by it may be
exercised by Lender either prior to, simultaneously with, or subsequent to any
action taken by it hereunder. Borrower hereby absolutely, unconditionally and
irrevocably waives any and all rights to assert any setoff, counterclaim or
crossclaim of any nature whatsoever with respect to the obligations of Borrower
under this Assignment, the Loan Agreement, the Note, the other Loan Documents or
otherwise with respect to the Loan in any action or proceeding brought by Lender
to collect same, or any portion thereof, or to enforce and realize upon the lien
and security interest created by this Assignment, the Loan Agreement, the Note,
or any of the other Loan Documents (provided, however, that the foregoing shall
not be deemed a waiver of Borrower's right to assert any compulsory counterclaim
if such counterclaim is compelled under local law or rule of procedure, nor
shall the foregoing be deemed a waiver of Borrower's right to assert any claim
which would constitute a defense, setoff, counterclaim or crossclaim of any
nature whatsoever against Lender in any separate action or proceeding).
Section 3.3 OTHER SECURITY. Lender may take or release other security
for the payment of the Debt, may release any party primarily or secondarily
liable therefor and may apply any other security held by it to the reduction or
satisfaction of the Debt without prejudice to any of its rights under this
Assignment.
-5-
Section 3.4 NON-WAIVER. The exercise by Lender of the option granted it
in Section 3.1 of this Assignment and the collection of the Rents and sums due
under or arising from the Assigned Property and the application thereof as
herein provided shall not be considered a waiver of any default by Borrower
under the Note, the Loan Agreement, the Leases, this Assignment or the other
Loan Documents. The failure of Lender to insist upon strict performance of any
term hereof shall not be deemed to be a waiver of any term of this Assignment.
Borrower shall not be relieved of Borrower's obligations hereunder by reason of
(a) the failure of Lender to comply with any request of Borrower or any other
party to take any action to enforce any of the provisions hereof or of the Loan
Agreement, the Note or the other Loan Documents, (b) the release regardless of
consideration, of the whole or any part of the Property, or (c) any agreement or
stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of this Assignment, the Loan Agreement, the Note, or the
other Loan Documents. Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take any action to recover the Debt, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
Lender thereafter to enforce its rights under this Assignment. The rights of
Lender under this Assignment shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of Lender shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision.
Section 3.5 BANKRUPTCY. (a) Upon or at any time after the occurrence
and during the continuation of an Event of Default, Lender shall have the right
to proceed in its own name or in the name of Borrower in respect of any claim,
suit, action or proceeding relating to the rejection of any Lease, including,
without limitation, the right to file and prosecute, to the exclusion of
Borrower, any proofs of claim, complaints, motions, applications, notices and
other documents, in any case in respect of the lessee under such Lease under the
Bankruptcy Code.
(b) If there shall be filed by or against Borrower a petition under the
Bankruptcy Code, and Borrower, as lessor under any Lease, shall determine to
reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then
Borrower shall give Lender not less than ten (10) days' prior notice of the date
on which Borrower shall apply to the bankruptcy court for authority to reject
the Lease. Lender shall have the right, but not the obligation, to serve upon
Borrower within such ten-day period a notice stating that (i) Lender demands
that Borrower assume and assign the Lease to Lender pursuant to Section 365 of
the Bankruptcy Code and (ii) Lender covenants to cure or provide adequate
assurance of future performance under the Lease. If Lender serves upon Borrower
the notice described in the preceding sentence, Borrower shall not seek to
reject the Lease and shall comply with the demand provided for in clause (i) of
the preceding sentence within thirty (30) days after the notice shall have been
given, subject to the performance by Lender of the covenant provided for in
clause (ii) of the preceding sentence.
ARTICLE 4 - NO LIABILITY, FURTHER ASSURANCES
Section 4.1 NO LIABILITY OF LENDER. This Assignment shall not be
construed to bind Lender to the performance of any of the covenants, conditions
or provisions contained in any Lease or Lease Guaranty or otherwise impose any
obligation upon Lender. Lender shall not be liable for any loss sustained by
-6-
Borrower resulting from Lender's failure to let the Property after an Event of
Default or from any other act or omission of Lender in managing the Property
after an Event of Default unless such loss is caused by the gross negligence,
willful misconduct or bad faith of Lender. Lender shall not be obligated to
perform or discharge any obligation, duty or liability under the Leases or any
Lease Guaranties or under or by reason of this Assignment and Borrower shall
indemnify Lender for, and hold Lender harmless from, any and all liability, loss
or damage which may or might be incurred under the Leases, any Lease Guaranties
or under or by reason of this Assignment and from any and all claims and demands
whatsoever, including the defense of any such claims or demands which may be
asserted against Lender by reason of any alleged obligations and undertakings on
its part to perform or discharge any of the terms, covenants or agreements
contained in the Leases or any Lease Guaranties; provided, however, that
Borrower shall not indemnify or hold Lender harmless with respect to liability
or loss or damage resulting from Lender's gross negligence, willful misconduct
or bad faith. Should Lender incur any such liability, the amount thereof,
including actual costs, expenses and reasonable attorneys' fees, shall be
secured by this Assignment and by the Mortgage and the other Loan Documents and
Borrower shall reimburse Lender therefor promptly upon demand and upon the
failure of Borrower so to do Lender may, at its option, declare all sums secured
by this Assignment and by the Mortgage and the other Loan Documents immediately
due and payable. This Assignment shall not operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Lender, nor for the carrying out of any of the terms and conditions of the
Leases or any Lease Guaranties; nor shall it operate to make Lender responsible
or liable for any waste committed on the Property by the tenants or any other
parties, or for any dangerous or defective condition of the Property including,
without limitation, the presence of any Hazardous Substances (as defined in the
Mortgage), or for any negligence in the management, upkeep, repair or control of
the Property resulting in loss or injury or death to any tenant, licensee,
employee or stranger.
Section 4.2 NO MORTGAGEE IN POSSESSION. Nothing herein contained shall
be construed as constituting Lender a "mortgagee in possession" in the absence
of the taking of actual possession of the Property by Lender. In the exercise of
the powers herein granted Lender, no liability shall be asserted or enforced
against Lender, all such liability being expressly waived and released by
Borrower unless caused by Lender's gross negligence, bad faith or willful
misconduct.
Section 4.3 FURTHER ASSURANCES. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, conveyances, assignments, notices of assignments,
transfers and assurances as Lender shall, from time to time, reasonably require
for the better assuring, conveying, assigning, transferring and confirming unto
Lender the property and rights hereby assigned or intended now or hereafter so
to be, or which Borrower may be or may hereafter become bound to convey or
assign to Lender, or for carrying out the intention or facilitating the
performance of the terms of this Assignment or for filing, registering or
recording this Assignment and, promptly following demand, will execute and
deliver and, if Borrower shall fail to do so, hereby authorizes Lender to
execute in the name of Borrower to the extent Lender may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments,
to evidence more effectively the lien and security interest hereof in and upon
the Leases.
-7-
ARTICLE 5 - MISCELLANEOUS PROVISIONS
Section 5.1 CONFLICT OF TERMS. In case of any conflict between the
terms of this Assignment and the terms of the Loan Agreement, the terms of the
Loan Agreement shall prevail. In case of any conflict between the terms of this
Assignment and the terms of the Mortgage, the terms of this Assignment shall
prevail.
Section 5.2 NO ORAL CHANGE. This Assignment and any provisions hereof
may not be modified, amended, waived, extended, changed, discharged or
terminated orally, or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom the
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
Section 5.3 GENERAL DEFINITIONS. All capitalized terms not defined
herein shall have the respective meanings set forth in the Loan Agreement.
Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Assignment may be used
interchangeably in singular or plural form and the word "Borrower" shall mean
"each Borrower and any subsequent owner or owners of the Property or any part
thereof or interest therein," the word "Lender" shall mean "Lender and any
subsequent holder of the Note, the word "Note" shall mean "the Note and any
other evidence of indebtedness secured by the Loan Agreement," the word
"Property" shall include any portion of the Property and any interest therein,
the phrases "attorneys' fees", "legal fees" and "counsel fees" shall include any
and all attorney's, paralegal and law clerk fees and disbursements, including,
but not limited to, fees and disbursements at the pre-trial, trial and appellate
levels incurred or paid by Lender in protecting its interest in the Property,
the Leases and the Rents and enforcing its rights hereunder; whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa.
Section 5.4 INAPPLICABLE PROVISIONS. If any term, covenant or condition
of this Assignment is held to be invalid, illegal or unenforceable in any
respect, this Assignment shall be construed without such provision.
Section 5.5 GOVERNING LAW. (A) THIS ASSIGNMENT WAS NEGOTIATED IN THE
STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF
NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF NEW
YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS ASSIGNMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
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CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS WITH RESPECT TO
THE PROPERTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS
AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES
ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
ASSIGNMENT AND THE NOTE, AND THIS ASSIGNMENT AND THE NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS ASSIGNMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT
STUART H. WIDOWSKI
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
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OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 5.6 TERMINATION OF ASSIGNMENT. Upon payment in full of the
Debt, this Assignment shall become and be void and of no effect.
Section 5.7 NOTICES. All notices or other written communications
hereunder shall be delivered in accordance with Section 11.6 of the Loan
Agreement.
Section 5.8 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THIS ASSIGNMENT, THE NOTE, OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.
Section 5.9 EXCULPATION. The provisions of Section 11.22 of the Loan
Agreement are hereby incorporated by reference into this Assignment to the same
extent and with the same force as if fully set forth herein.
Section 5.10 SUCCESSORS AND ASSIGNS. This Assignment shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns forever.
Section 5.11 HEADINGS, ETC. The headings and captions of various
paragraphs of this Assignment are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower has executed this Assignment the
day and year first above written.
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Brenda J. Walker
Title: Vice President
ACKNOWLEDGMENT
[INSERT STATE SPECIFIC ACKNOWLEDGMENT]
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B
DESCRIPTION OF LEASES AND RENTS
As used in Subsection 1.1(a), the term "leases" shall mean all leases,
subleases, licenses, franchises, concessions or grants of other possessory
interests, tenancies, and any other agreements affecting the use, possession or
occupancy of the Property or any part thereof (including, without limitation,
guest rooms, restaurants, bars, conference and meeting rooms, and banquet halls
and other public facilities), whether now or hereafter existing or entered into
(including, without limitation, any use or occupancy arrangements created
pursuant to Section 365(d) of the Bankruptcy Code or otherwise in connection
with the commencement or continuance of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar proceedings, or
any assignment for the benefit of creditors, in respect of any tenant or
occupant of any portion of the Property) and all amendments, modifications,
supplements, extensions or renewals thereof, whether now or hereafter existing
and all amendments, modifications, supplements, extensions or renewals thereof.
As used in Subsection 1.1(a) the term "lease provisions" shall mean the right to
enforce, whether at law or in equity or by any other means, all terms, covenants
and provisions of the Leases.
As used in Subsection 1.1(c), the term "rents" shall mean all rents,
issues, profits, royalties (including all oil and gas or other hydrocarbon
substances), earnings, receipts, revenues, accounts, account receivable,
security deposits and other deposits (subject to the prior right of the tenants
making such deposits) and income, including, without limitation, fixed,
additional and percentage rents, and all operating expense reimbursements,
reimbursements for increases in taxes, sums paid by tenants to Borrower to
reimburse Borrower for amounts originally paid or to be paid by Borrower or
Borrower's agents or affiliates for which such tenants were liable, as, or
example, tenant improvements costs in excess of any work letter, lease takeover
costs, moving expenses and tax and operating expense pass-throughs for which a
tenant is solely liable, parking, maintenance, common area, tax, insurance,
utility and service charges and contributions, proceeds of sale of electricity,
gas, heating, air-conditioning and other utilities and services, deficiency
rents and liquidated damages, and other benefits now or hereafter derived from
any portion of the Property or otherwise due and payable or to become due and
payable as a result of any ownership, use, possession, occupancy or operation
thereof and/or services rendered, goods provided and business conducted in
connection therewith (including any payments received pursuant to Section 502(b)
of the Bankruptcy Code or otherwise in arrangement, insolvency, dissolution,
receivership or similar proceedings, or any assignment for the benefit of
creditors, in respect of any tenant or other occupants of any portion of the
Property and all claims as a creditor in connection with any of the foregoing)
and all cash or security deposits, advance rentals, and all deposits or payments
of a similar nature relating thereto, now or hereafter, including during any
period of redemption, derived from the Property or any portion thereof and all
proceeds from the cancellation, surrender, sale or other disposition of the
Leases.
Exhibit 10.17
ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT") made as of the 1st
day of November, 2004 by CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited
liability company, having an office at c/o Cedar Shopping Centers Partnership,
L.P., 44 South Bayles Avenue, Suite 304, Port Washington, NY 11050 ("BORROWER"),
and CEDAR SHOPPING CENTERS PARTNERSHIP, L.P., a Delaware limited partnership,
having an office at 44 South Bayles Avenue, Suite 304, Port Washington, NY 11050
("PRINCIPAL", and together with Borrower, "INDEMNITOR"), in favor of EUROHYPO
AG, NEW YORK BRANCH, the New York branch of a German banking corporation, having
an office at 1114 Avenue of the Americas, Twenty-Ninth Floor, New York, New York
10036 ("INDEMNITEE") and other Indemnified Parties (defined below).
RECITALS:
A. Indemnitee is prepared to make a loan (the "LOAN") to Borrower in
the principal amount of $43,500,000.00 pursuant to a Loan Agreement of even date
herewith between Borrower and Indemnitee (as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time, the "LOAN
AGREEMENT"). Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Loan Agreement.
B. Indemnitee is unwilling to make the Loan unless Indemnitor agrees to
provide the indemnification, representations, warranties, covenants and other
matters described in this Agreement for the benefit of the Indemnified Parties.
C. Indemnitor is entering into this Agreement to induce Indemnitee to
make the Loan.
AGREEMENT
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Indemnitor hereby represents, warrants, covenants and agrees for
the benefit of the Indemnified Parties as follows:
1. ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. (A) Except as
otherwise specifically described in that certain Phase I environmental report
(or Phase II environmental report, if required) in respect of the Property
delivered to Indemnitee (referred to below as the "ENVIRONMENTAL REPORT"), a
copy of which has been provided to Indemnitee, and (b) except as otherwise
disclosed to Lender in connection with the Exxon Remediation, to Indemnitor's
knowledge (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully and specifically described to Indemnitee in
writing pursuant to the Environmental Report; (b) there are no past, present or
threatened Releases (defined below) of Hazardous Substances in, on, under or
from the Property which have not been fully remediated in accordance with
Environmental Law; (c) there is no threat of any Release of Hazardous Substances
migrating to the Property; (d) there is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in connection with
the Property which has not been fully remediated in accordance with
Environmental Law; (e) Indemnitor does not know of, and has not received, any
written or oral notice or other communication from any Person (including but not
limited to a governmental entity) relating to Hazardous Substances or
Remediation (defined below) thereof, of possible liability of any Person
pursuant to any Environmental Law, other environmental conditions in connection
with the Property, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing; and (f) Indemnitor has
truthfully and fully provided to Indemnitee, in writing, any and all information
relating to conditions in, on, under or from the Property that is known to
Indemnitor and that is contained in files and records of Indemnitor, including
but not limited to any reports relating to Hazardous Substances in, on, under or
from the Property and/or to the environmental condition of the Property.
2. ENVIRONMENTAL COVENANTS. Indemnitor covenants and agrees that: (a) all uses
and operations on or of the Property, whether by Indemnitor or any other Person,
shall be in compliance with all Environmental Laws and permits issued pursuant
thereto; (b) there shall be no Releases of Hazardous Substances in, on, under or
from the Property; (c) there shall be no Hazardous Substances in, on, or under
the Property, except those that are both (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto and (ii) fully
disclosed to Indemnitee in writing; (d) Indemnitor shall keep the Property free
and clear of all liens and other encumbrances imposed pursuant to any
Environmental Law, whether due to any act or omission of Indemnitor or any other
Person (the "ENVIRONMENTAL LIENS"); (e) Indemnitor shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to
Paragraph 3 of this Agreement, including but not limited to providing all
relevant information and making knowledgeable Persons available for interviews;
(f) Indemnitor shall, at its sole cost and expense (but not more than one time
during the term of the Loan unless an Event of Default shall have occurred and
is then continuing or if Lender reasonably suspects that a new Release of a
Hazardous Substance or a condition other than that currently being remediated by
Exxon/Mobil has occurred), perform any environmental site assessment or other
investigation of environmental conditions in connection with the Property, by an
environmental consultant approved by Lender pursuant to any written request of
Indemnitee (including but not limited to sampling, testing and analysis of soil,
water, air, building materials, and other materials and substances whether
solid, liquid or gas), and share with Indemnitee the reports and other results
thereof, and Indemnitee and the other Indemnified Parties shall be entitled to
rely on such reports and other results thereof; (g) Indemnitor shall, at its
sole cost and expense, (i) effectuate Remediation of any condition (including
but not limited to a Release of a Hazardous Substance) in, on, under or from the
Property in full compliance of Environmental Laws or reasonably required by
Indemnitee based upon recommendations and observations of an independent
environmental consultant approved by Lender; (ii) comply with any Environmental
Law; (iii) comply with any directive from any governmental authority; and (iv)
take any other action necessary or appropriate for protection of human health or
the environment regarding Environmental Law; (h) Indemnitor shall not do or
allow any tenant or other user of the Property to do any act with respect to
Hazardous Substances that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any Person (whether on or
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off the Property), impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Indemnitor shall immediately notify
Indemnitee in writing upon Indemnitor's receipt of written notice regarding (A)
any presence or Releases or threatened Releases of Hazardous Substances in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien; (D) any required Remediation of environmental
conditions relating to the Property; and (E) any written notice or other
communication of which any Indemnitor becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability of any Person
pursuant to any Environmental Law, other environmental conditions in connection
with the Property, or any actual or potential administrative or judicial
proceedings in connection with anything referred to in this Agreement.
3. INDEMNIFIED RIGHTS/COOPERATION AND ACCESS. In the event the
Indemnified Parties have reason to believe, in the exercise of reasonable
discretion and good faith, that an environmental hazard exists on the Property
that does not, in the sole discretion of the Indemnified Parties, endanger any
tenants or other occupants of the Property or their guests or the general public
or materially and adversely affects the value of the Property, upon reasonable
notice from the Indemnitee, Indemnitor shall, at Indemnitor's expense, promptly
cause an engineer or consultant reasonably satisfactory to the Indemnified
Parties to conduct any environmental assessment or audit (the scope of which
shall be reasonably satisfactory to Lender) (the scope of which shall be
determined in the sole and absolute discretion of the Indemnified Parties) and
take any samples of soil, groundwater or other water, air, or building materials
or any other invasive testing requested by Indemnitee and promptly deliver the
results of any such assessment, audit, sampling or other testing; provided,
however, if such results are not delivered to the Indemnified Parties within a
reasonable period or if the Indemnified Parties have reason to believe that an
environmental hazard exists on the Property that, in the sole judgment of the
Indemnified Parties, endangers any tenant or other occupant of the Property or
their guests or the general public or may materially and adversely affect the
value of the Property, upon reasonable notice to Indemnitor, the Indemnified
Parties and any other Person designated by the Indemnified Parties, including
but not limited to any receiver, any representative of a governmental entity,
and any environmental consultant, shall have the right, but not the obligation,
to enter upon the Property at all reasonable times to assess any and all aspects
of the environmental condition of the Property and its use, including but not
limited to conducting any environmental assessment or audit (the scope of which
shall be determined in the sole and absolute discretion of the Indemnified
Parties) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Indemnitor
shall cooperate with and provide the Indemnified Parties and any such Person
designated by the Indemnified Parties with access to the Property.
4. INDEMNIFICATION. Indemnitor covenants and agrees, at its sole cost
and expense, to protect, defend, indemnify, release and hold Indemnified Parties
harmless from and against any and all Losses (defined below) imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following except to the extent the same relate to Hazardous Substances first
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introduced to the Property by anyone other than Indemnitor or its respective
agents or employees following the foreclosure or delivery of a deed in lieu of
foreclosure: (a) any presence of any Hazardous Substances in, on, above, or
under the Property in violation of Environmental Law; (b) any past, present or
threatened Release of Hazardous Substances in, on, above, under or from the
Property in violation of Environmental Law; (c) any activity by Indemnitor, any
Person affiliated with Indemnitor, and any tenant or other user of the Property
in connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Property of any Hazardous
Substances at any time located in, under, on or above the Property in violation
of Environmental Law; (d) any activity by Indemnitor, any Person affiliated with
Indemnitor, and any tenant or other user of the Property in connection with any
actual Remediation of any Hazardous Substances at any time located in, under, on
or above the Property, whether or not such Remediation is voluntary or pursuant
to court or administrative order, including but not limited to any removal,
remedial or corrective action; (e) any past, present or threatened
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by Indemnitor, any Person
affiliated with Indemnitor, and any tenant or other user of the Property to
comply with any order of any governmental authority in connection with any
Environmental Laws; (f) the imposition, recording or filing or the threatened
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this Agreement;
(h) any past, present or threatened injury to, destruction of or loss of natural
resources in any way connected with the Property, including but not limited to
costs to investigate and assess such injury, destruction or loss; (i) any acts
of Indemnitor, any Person affiliated with Indemnitor, and any tenant or other
user of the Property in arranging for disposal or treatment, or arranging with a
transporter for transport for disposal or treatment, of Hazardous Substances at
any facility or incineration vessel containing such or similar Hazardous
Substances; (j) any acts of Indemnitor, any Person affiliated with any
Indemnitor, and any tenant or other user of the Property in accepting any
Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property or other
damage arising under any statutory or common law or tort law theory, including
but not limited to damages assessed for private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property; and (l)
any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to this Agreement, the Loan Agreement or the Mortgage. The foregoing
indemnifications shall not apply to liability, loss or other claims caused by
the gross negligence, willful misconduct or bad faith by any Indemnified
Parties.
5. DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES. Upon
written request by any Indemnified Party, Indemnitor shall defend same (if
requested by any Indemnified Party, in the name of the Indemnified Party) by
attorneys and other professionals approved by the Indemnified Parties.
Notwithstanding the foregoing, any Indemnified Parties may, in the event an
actual conflict exists which would prejudice any Indemnified Parties, engage
their own attorneys and other professionals to defend or assist them, and, at
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the option of Indemnified Parties, their attorneys shall control the resolution
of any claim or proceeding, providing that no compromise or settlement shall be
entered without Indemnitor's consent, which consent shall not be unreasonably
withheld. Upon demand, Indemnitor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
6. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:The term "ENVIRONMENTAL LAW" means any present and
future federal, state and local laws, statutes, ordinances, rules, regulations
and the like, as well as common law, relating to protection of human health or
the environment, relating to Hazardous Substances, relating to liability for or
costs of other actual or threatened danger to human health or the environment.
The term "ENVIRONMENTAL LAW" includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. The term "ENVIRONMENTAL LAW" also includes,
but is not limited to, any present and future federal, state and local laws,
statutes ordinances, rules, regulations and the like, as well as common law:
conditioning transfer of property upon a negative declaration or other approval
of a governmental authority of the environmental condition of the Property;
requiring notification or disclosure of Releases of Hazardous Substances or
other environmental condition of the Property to any Governmental Authority or
other Person, whether or not in connection with transfer of title to or interest
in property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.
The term "HAZARDOUS SUBSTANCES" includes but is not limited to
any and all substances (whether solid, liquid or gas) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives, but excluding substances of kinds and in amounts
ordinarily and customarily used or stored in similar properties for the purposes
of cleaning or other maintenance or operations and otherwise in compliance with
all Environmental Laws.
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The term "INDEMNIFIED PARTIES" includes Indemnitee, any Person who is
or will have been involved in the origination of the Loan, any Person who is or
will have been involved with the servicing of the Loan, any Person in whose name
the encumbrance created by the Mortgage is or will have been recorded, Persons
who may hold or acquire or will have held a full or partial interest in the Loan
(including, but not limited to, Investors (defined below) or prospective
Investors in the Securities (defined below), as well as custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan
for the benefit of third parties) as well as the respective directors, officers,
shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including but not limited to any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Property, whether during the term of
the Loan or as a part of or following a foreclosure of the Loan and including,
but not limited to, any successors by merger, consolidation or acquisition of
all or a substantial portion of Indemnitee's assets and business).
The term "LEGAL ACTION" means any claim, suit or proceeding, whether
administrative or judicial in nature.
The term "LOSSES" includes any losses, actual damages, costs, fees,
expenses, claims, suits, judgments, awards, liabilities (including but not
limited to strict liabilities), obligations, debts, diminutions in value, fines,
penalties, charges, costs of Remediation (whether or not performed voluntarily),
amounts paid in settlement, foreseeable and unforeseeable consequential damages,
litigation costs, reasonable attorneys' fees, engineers' fees, reasonable
environmental consultants' fees, and investigation costs (including but not
limited to costs for sampling, testing and analysis of soil, water, air,
building materials, and other materials and substances whether solid, liquid or
gas), of whatever kind or nature, and whether or not incurred in connection with
any judicial or administrative proceedings, actions, claims, suits, judgments or
awards.
The term "RELEASE" with respect to any Hazardous Substance includes but
is not limited to any release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances in amounts in
violation of Environmental Law.
The term "REMEDIATION" includes but is not limited to any response,
remedial, removal, or corrective action required by Environmental Law; any
activity to clean up, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Substance required by Environmental Law; any actions to prevent,
cure or mitigate any Release of any Hazardous Substance required by
Environmental Law; any action to comply with any Environmental Laws or with any
permits issued pursuant thereto; any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, laboratory or other
analysis, or evaluation relating to any Hazardous Substances or to anything
referred to herein.
7. UNIMPAIRED LIABILITY. The liability of Indemnitor under this
Agreement shall in no way be limited or impaired by, and Indemnitor hereby
consents to and agrees to be bound by, any amendment or modification of the
provisions of the Note, the Loan Agreement, the Mortgage or any other Loan
Document to or with Indemnitee by Indemnitor or any Person who succeeds
-6-
Indemnitor or any Person as owner of the Property. In addition, the liability of
Indemnitor under this Agreement shall in no way be limited or impaired by (i)
any extensions of time for performance required by the Note, the Loan Agreement,
the Mortgage or any of the other Loan Documents, (ii) any sale or transfer of
all or part of the Property, (iii) except as provided herein, any exculpatory
provision in the Note, the Loan Agreement, the Mortgage, or any of the other
Loan Documents limiting Indemnitee's recourse to the Property or to any other
security for the Note, or limiting Indemnitee's rights to a deficiency judgment
against Indemnitor, (iv) the accuracy or inaccuracy of the representations and
warranties made by Indemnitor under the Note, the Loan Agreement, the Mortgage
or any of the other Loan Documents or herein, (v) the release of Indemnitor or
any other Person from performance or observance of any of the agreements,
covenants, terms or condition contained in any of the other Loan Documents by
operation of law, Indemnitee's voluntary act, or otherwise, (vi) the release or
substitution in whole or in part of any security for the Note, or (vii)
Indemnitee's failure to record the Mortgage or file any UCC financing statements
(or Indemnitee's improper recording or filing of any thereof) or to otherwise
perfect, protect, secure or insure any security interest or lien given as
security for the Note; and, in any such case, whether with or without notice to
Indemnitor and with or without consideration.
8. ENFORCEMENT. Indemnified Parties may enforce the obligations of
Indemnitor without first resorting to or exhausting any security or collateral
or without first having recourse to the Note, the Loan Agreement, the Mortgage,
or any other Loan Documents or any of the Property, through foreclosure
proceedings or otherwise, provided, however, that nothing herein shall inhibit
or prevent Indemnitee from suing on the Note, foreclosing, or exercising any
power of sale under, the Mortgage, or exercising any other rights and remedies
thereunder. This Agreement is not collateral or security for the debt of
Borrower pursuant to the Loan, unless Indemnitee expressly elects in writing to
make this Agreement additional collateral or security for the debt of Borrower
pursuant to the Loan, which Indemnitee is entitled to do in its sole and
absolute discretion. It is not necessary for an Event of Default to have
occurred pursuant to and as defined in the Mortgage or the Loan Agreement for
Indemnified Parties to exercise their rights pursuant to this Agreement.
Notwithstanding any provision of the Loan Agreement (including, without
limitation, Section 11.22 thereof) the obligations pursuant to this Agreement
are exceptions to any non-recourse or exculpation provision of the Loan
Agreement; Indemnitor is fully and personally liable for such obligations, and
such liability is not limited to the original or amortized principal balance of
the Loan or the value of the Property.
9. SURVIVAL. The obligations and liabilities of Indemnitor under this
Agreement shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any
power of sale, or delivery of a deed in lieu of foreclosure of the Mortgage.
10. INTEREST. Any amounts payable to any Indemnified Parties under this
Agreement shall become immediately due and payable on demand and, if not paid
within five (5) days of such demand therefor, shall bear interest at the Default
Rate.
11. WAIVERS. (a) Indemnitor hereby waives (i) any right or claim of
right to cause a marshaling of Indemnitor's assets or to cause Indemnitee or
other Indemnified Parties to proceed against any of the security for the Loan
before proceeding under this Agreement against Indemnitor; (ii) and relinquishes
-7-
all rights and remedies accorded by applicable law to indemnitors or guarantors,
except any rights of subrogation which Indemnitor may have, provided that the
indemnity provided for hereunder shall neither be contingent upon the existence
of any such rights of subrogation nor subject to any claims or defenses
whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim
that such subrogation rights were abrogated by any acts of Indemnitee or other
Indemnified Parties; (iii) the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment
for payment, demand of payment, protest or notice of nonpayment or failure to
perform or observe, or other proof, or notice or demand unless specifically
required by applicable law; and (vi) all homestead exemption rights against the
obligations hereunder and the benefits of any statutes of limitations or repose.
Notwithstanding anything to the contrary contained herein, Indemnitor hereby
agrees to postpone the exercise of any rights of subrogation with respect to any
collateral securing the Loan until the Loan shall have been paid in full.
(B) INDEMNITOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN
EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE
MORTGAGE, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF
ANY INDEMNIFIED PARTIES IN CONNECTION THEREWITH.
12. SUBROGATION. Indemnitor shall take any and all reasonable actions,
including institution of legal action against third parties, necessary or
appropriate to obtain reimbursement, payment or compensation from such Persons
responsible for the presence of any Hazardous Substances at, in, on, under or
near the Property or otherwise obligated by law to bear the cost. Indemnified
Parties shall be and hereby are subrogated to all of Indemnitor's rights now or
hereafter in such claims.
13. INDEMNITOR'S REPRESENTATIONS AND WARRANTIES. Indemnitor represents
and warrants that:
(a) it has the full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement by Indemnitor has been duly
and validly authorized; and all requisite action has been taken by
Indemnitor to make this Agreement valid and binding upon Indemnitor,
enforceable in accordance with its terms;
(b) its execution of, and compliance with, this Agreement is
in the ordinary course of business of Indemnitor and will not result in
the breach of any term or provision of the charter, by-laws,
partnership or trust agreement, or other governing instrument of
Indemnitor or result in the breach of any term or provision of, or
-8-
conflict with or constitute a default under, or result in the
acceleration of any obligation under, any agreement, indenture or loan
or credit agreement or other instrument to which Indemnitor or the
Property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which Indemnitor or the
Property is subject;
(c) to the best of Indemnitor's knowledge, there is no action,
suit, proceeding or investigation pending or threatened against it
which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of Indemnitor, or in any material
impairment of the right or ability of Indemnitor to carry on its
business substantially as now conducted, or in any material liability
on the part of Indemnitor, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of Indemnitor contemplated herein, or
which would be likely to impair materially the ability of Indemnitor to
perform under the terms of this Agreement;
(d) it does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in
this Agreement;
(e) to the best of Indemnitor's knowledge, no approval,
authorization, order, license or consent of, or registration or filing
with, any governmental authority or other person, and no approval,
authorization or consent of any other party is required in connection
with this Agreement; and
(f) this Agreement constitutes a valid, legal and binding
obligation of Indemnitor, enforceable against it in accordance with the
terms hereof except as limited by bankruptcy, insolvency or other laws
of general application relating to the enforcement of obligations under
this Agreement and creditors rights.
14. NO WAIVER. No delay by any Indemnified Party in exercising any
right, power or privilege under this Agreement shall operate as a waiver of any
such privilege, power or right.
15. NOTICE OF LEGAL ACTIONS. Each party hereto shall, within five (5)
business days of receipt thereof, give written notice to the other party hereto
of (i) any notice, advice or other communication from any governmental entity or
any source whatsoever with respect to Release of Hazardous Substances on, from
or affecting the Property, and (ii) any legal action brought against such party
or related to the Property, with respect to which Indemnitor may have liability
under this Agreement. Such notice shall comply with the provisions of Section 19
hereof.
16. EXAMINATION OF BOOKS AND RECORDS. Indemnified Parties and their
accountants shall have the right to examine the records, books, management and
other papers of Indemnitor which reflect upon its financial condition, at the
Property or at the office regularly maintained by Indemnitor where the books and
records are located. Indemnified Parties and their accountants shall have the
right to make copies and extracts from the foregoing records and other papers.
-9-
In addition, at reasonable times and upon reasonable notice, Indemnified Parties
and their accountants shall have the right to examine and audit the books and
records of Indemnitor pertaining to the income, expenses and operation of the
Property during reasonable business hours at the office of Indemnitor where the
books and records are located.
17. TRANSFER OF LOAN. (a) Indemnitee may, at any time, sell, transfer
or assign the Note, the Loan Agreement, the Mortgage, this Agreement and the
other Loan Documents, and any or all servicing rights with respect thereto, or
grant participations therein or issue mortgage pass-through certificates or
other securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "SECURITIES"). Indemnitee may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such
Securities or any credit rating agency rating such Securities (the foregoing
entities hereinafter collectively referred to as the "INVESTOR") and each
prospective Investor, all documents and information which Indemnitee now has or
may hereafter acquire relating to Indemnitor and the Property, whether furnished
by Indemnitor, any guarantor or otherwise, as Indemnitee determines necessary or
desirable. Indemnitor and any guarantor agree to cooperate at no material cost
or expense with Indemnitee in connection with any transfer made or any
Securities created as described in this Section, including, without limitation,
the delivery of an estoppel certificate required in accordance with the Loan
Agreement and such other documents as may be reasonably requested by Indemnitee.
Indemnitor shall also furnish, and Indemnitor and any guarantor hereby consent
to Indemnitee furnishing to such Investors or such prospective Investors, any
and all information concerning the financial condition of the Indemnitor and any
guarantor and any and all information concerning the Property and the Leases as
may be requested by Indemnitee, any Investor or any prospective Investor in
connection with any sale, transfer or participation interest.
(b) Upon any transfer or proposed transfer contemplated above and by
Section 9.1 of the Loan Agreement, at Indemnitee's request, Indemnitor shall
provide an estoppel certificate to the Investor or any prospective Investor in
such form, substance and detail as Indemnitee, such Investor or prospective
Investor may require.
18. TAXES. Indemnitor has filed all federal, state, county, municipal,
and city income and other tax returns required to have been filed by it and has
paid all taxes and related liabilities which have become due pursuant to such
returns or pursuant to any assessments received by it. Indemnitor has no
knowledge of any basis for any additional assessment in respect of any such
taxes and related liabilities for prior years.
19. NOTICES. All notices or other written communications hereunder
shall be made in accordance with Section 11.6 of the Loan Agreement.
20. DUPLICATE ORIGINALS; COUNTERPARTS. This Agreement may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Agreement may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Agreement. The failure of any party hereto to
execute this Agreement, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
-10-
21. NO ORAL CHANGE. This Agreement, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Indemnitor or any Indemnified
Party, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
22. HEADINGS, ETC. The headings and captions of various paragraphs of
this Agreement are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
23. NUMBER AND GENDER/SUCCESSORS AND ASSIGNS. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the Person or Persons referred to may
require. Without limiting the effect of specific references in any provision of
this Agreement, the term "INDEMNITOR" shall be deemed to refer to each and every
Person comprising an Indemnitor from time to time, as the sense of a particular
provision may require, and to include the heirs, executors, administrators,
legal representatives, successors and assigns of Indemnitor, all of whom shall
be bound by the provisions of this Agreement, provided that no obligation of
Indemnitor may be assigned except with the written consent of Indemnitee. Each
reference herein to Indemnitee shall be deemed to include its successors and
assigns. This Agreement shall inure to the benefit of Indemnified Parties and
their respective successors and assigns forever.
24. RELEASE OF LIABILITY. Any one or more parties liable upon or in
respect of this Agreement may be released without affecting the liability of any
party not so released.
25. RELEASE OF INDEMNITOR. Upon the substitution of either Indemnitor
pursuant to Section 8.3 of the Loan Agreement, such Indemnitor shall be released
from any liability or other obligation under this Agreement first arising after
the date of such substitution.
26. RIGHTS CUMULATIVE. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which Indemnitee has
under the Note, the Mortgage, the Loan Agreement or the other Loan Documents or
would otherwise have at law or in equity.
27. INAPPLICABLE PROVISIONS. If any term, condition or covenant of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such provision.
28. GOVERNING LAW. A. THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW
YORK, AND MADE BY INDEMNITOR AND ACCEPTED BY INDEMNITEE IN THE STATE OF NEW
YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE
OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,
INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
-11-
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF
THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS
CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS WITH RESPECT TO
THE PROPERTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS
AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
EXTENT PERMITTED BY LAW, INDEMNITOR HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
B. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST INDEMNITEE OR
INDEMNITOR ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT INDEMNITEE'S
OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND INDEMNITOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR
HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND INDEMNITOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. INDEMNITOR
DOES HEREBY DESIGNATE AND APPOINT:
STUART H. WIDOWSKI
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO INDEMNITOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON INDEMNITOR IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. INDEMNITOR (I) SHALL GIVE PROMPT
NOTICE TO INDEMNITEE OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
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(II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE
SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO
HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A
SUCCESSOR.
29. MISCELLANEOUS. (a) Wherever pursuant to this Agreement (i)
Indemnitee exercises any right given to it approve or disapprove, (ii) any
arrangement or term is to be satisfactory to Indemnitee, or (iii) any other
decision or determination is to be made by Indemnitee, the decision of
Indemnitee to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and determinations
made by Indemnitee, shall be in the sole and absolute discretion of Indemnitee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
(b) Wherever pursuant to this Agreement it is provided that Indemnitor
pay any costs and expenses, such costs and expenses shall include, but not be
limited to, legal fees and disbursements of Indemnitee, whether retained firms,
the reimbursements for the expenses of the in-house staff or otherwise.
(c) Joint and Several Liability. If Indemnitor consists of more than
one person or party, the obligations and liabilities of each such person or
party hereunder shall be joint and several.
[NO FURTHER TEXT ON THIS PAGE]
-13-
IN WITNESS WHEREOF, this Agreement has been executed by
Indemnitor and is effective as of the day and year first above written.
INDEMNITOR:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Brenda J. Walker
Title: Vice President
INDEMNITEE:
EUROHYPO AG, NEW YORK BRANCH, the New York branch of
a German banking corporation
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
EXHIBIT 10.18
GUARANTY
This GUARANTY (this "GUARANTY") is executed as of November 1, 2004 by
CEDAR SHOPPING CENTER PARTNERSHIP, L.P. (whether one or more collectively
referred to as "GUARANTOR"), for the benefit of EUROHYPO AG, NEW YORK BRANCH,
the New York branch of a German banking corporation ("LENDER").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Promissory Note, dated of even date
herewith, executed by CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited liability
company ("BORROWER"), and payable to the order of Lender in the original
principal amount of FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($43,500,000.00) (together with all renewals, modifications, increases and
extensions thereof, the "NOTE"), Borrower has become indebted to Lender with
respect to a loan (the "LOAN") which is made pursuant to that certain Loan
Agreement, dated of even date herewith, between Borrower and Lender (the "LOAN
AGREEMENT");
WHEREAS, Lender is not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantor unconditionally guarantees payment and
performance to Lender of the Guaranteed Obligations (as herein defined); and
WHEREAS, Guarantor is the owner of a direct or indirect interest in
Borrower, and Guarantor will directly benefit from Lender's making the Loan to
Borrower.
NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower
and to extend such additional credit as Lender may from time to time agree to
extend under the Loan Documents, and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
do hereby agree as follows:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1 GUARANTY OF OBLIGATION. Guarantor hereby irrevocably and
unconditionally guarantees to Lender and its successors and assigns the payment
and performance of the Guaranteed Obligations as and when the same shall be due
and payable, whether by lapse of time, by acceleration of maturity or otherwise.
Guarantor hereby irrevocably and unconditionally covenants and agrees that it is
liable for the Guaranteed Obligations as a primary obligor. This Guaranty shall
terminate and be of no further force and effect upon the performance or payment
in full of the Guaranteed Obligations.
1.2 DEFINITION OF GUARANTEED OBLIGATIONS. As used herein, the term
"GUARANTEED OBLIGATIONS" means the obligations or liabilities of Borrower to
Lender for any loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including attorneys' fees and costs reasonably incurred)
arising out of or in connection with the following:
(a) fraud or intentional misrepresentation by Borrower or any
guarantor in connection with the Loan;
(b) the willful misconduct of Borrower;
(c) the breach of any representation, warranty, covenant or
indemnification provision in the Environmental Indemnity or in the
Mortgage concerning environmental laws, hazardous substances and
asbestos and any indemnification of Lender with respect thereto in
either document;
(d) the removal or disposal of any portion of the Property
after an Event of Default;
(e) the misapplication or conversion by Borrower of (i) any
insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (ii) any Awards or other amounts received in connection
with the Condemnation of all or a portion of the Property, or (iii) any
Rents following an Event of Default or any Rents collected for more
than one month in advance to the extent such Rents or any other
payments in respect of the Leases and other income of the Property or
any other collateral are not applied to the costs of maintenance and
operation of the Property and to the payment of taxes, lien claims,
insurance premiums, Debt Service and other amounts due under the Loan
Documents;
(f) misappropriation or conversion of any security deposits,
advance deposits or any other deposits collected with respect to the
Property which are not delivered to Lender upon a foreclosure of the
Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and
conditions of any of the Leases prior to the occurrence of the Event of
Default that gave rise to such foreclosure or action in lieu thereof;
(g) Borrower's failure to maintain insurance as required by
the Loan Agreement or to pay any taxes or assessments affecting the
Property, as required by the Loan Agreement;
(h) misappropriation, removal or disposal (except in the
ordinary course of Borrower's business) of any Personal Property (as
defined in the Mortgage) affixed to the Property which constitutes a
portion of the collateral for the Loan;
(i) failure to pay any charges when due for labor or materials
that create Liens on the Property (to the extent net cash flow from the
Property is available for payment of such charges) unless the same are
being contested in accordance with Loan Agreement;
(j) failure to restore physical waste of the Property; or
-2-
(k) failure to appoint a new property manager upon the request
of Lender after an Event of Default, as required by, and in accordance
with the terms and provisions of, the Loan Agreement and the Mortgage.
Notwithstanding anything to the contrary in any of the Loan Documents,
(i) Lender shall not be deemed to have waived any right which Lender may have
under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Debt or to require
that all collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Loan Documents and (ii) Guarantor shall be liable for the
full amount of the Debt in the event that: (A) Borrower fails to obtain Lender's
prior consent to any subordinate financing or other voluntary Lien encumbering
the Property (other than Permitted Encumbrances); (B) Borrower fails to obtain
Lender's prior consent to any Prohibited Transfer as required by the Mortgage or
the Loan Agreement; (C) Borrower files a voluntary petition under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law; (D) an
Affiliate which controls, directly or indirectly, Borrower files, or joins in
the filing of, an involuntary petition against Borrower under the Bankruptcy
Code or any other Federal or state bankruptcy or insolvency law, or solicits or
causes to be solicited petitioning creditors for any involuntary petition
against Borrower from any Person; (E) Borrower files an answer consenting to or
otherwise acquiescing in or joining in any involuntary petition filed against
it, by any other Person under the Bankruptcy Code or any other Federal or state
bankruptcy or insolvency law, or solicits or causes to be solicited petitioning
creditors for any involuntary petition from any Person; (F) any Affiliate which
controls Borrower consents to or acquiesces in or joins in an application for
the appointment of a custodian, receiver, trustee, or examiner for Borrower or
any portion of the Property; (G) Borrower makes an assignment for the benefit of
creditors, or admits, in writing or in any legal proceeding, its insolvency or
inability to pay its debts as they become due; or (H) Borrower defaults in the
observance or performance of any of its obligations under Section 3.1.24 of the
Loan Agreement.
1.3 NATURE OF GUARANTY. This Guaranty is an irrevocable, absolute,
continuing guaranty of payment and performance and not a guaranty of collection.
This Guaranty may not be revoked by Guarantor and shall continue to be effective
with respect to any Guaranteed Obligations arising or created after any
attempted revocation by Guarantor and after (if Guarantor is a natural person)
Guarantor's death (in which event this Guaranty shall be binding upon
Guarantor's estate and Guarantor's legal representatives and heirs). The fact
that at any time or from time to time the Guaranteed Obligations may be
increased or reduced shall not release or discharge the obligation of Guarantor
to Lender with respect to the Guaranteed Obligations. This Guaranty may be
enforced by Lender and any subsequent holder of the Note and shall not be
discharged by the assignment or negotiation of all or part of the Note.
1.4 GUARANTEED OBLIGATIONS NOT REDUCED BY OFFSET. The Guaranteed
Obligations and the liabilities and obligations of Guarantor to Lender hereunder
shall not be reduced, discharged or released because or by reason of any
existing or future offset, claim or defense of Borrower or any other party
against Lender or against payment of the Guaranteed Obligations, whether such
offset, claim or defense arises in connection with the Guaranteed Obligations
(or the transactions creating the Guaranteed Obligations) or otherwise.
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1.5 PAYMENT BY GUARANTOR. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, Guarantor shall, immediately upon demand by Lender
and without presentment, protest, notice of protest, notice of non-payment,
notice of intention to accelerate the maturity, notice of acceleration of the
maturity or any other notice whatsoever unless required by applicable law, pay
in lawful money of the United States of America, the amount due on the
Guaranteed Obligations to Lender at Lender's address as set forth herein. Such
demand(s) may be made at any time coincident with or after the time for payment
of all or part of the Guaranteed Obligations and may be made from time to time
with respect to the same or different items of Guaranteed Obligations. Such
demand shall be deemed made, given and received in accordance with the notice
provisions hereof.
1.6 NO DUTY TO PURSUE OTHERS. It shall not be necessary for Lender (and
Guarantor hereby waives any rights which Guarantor may have to require Lender),
in order to enforce the obligations of Guarantor hereunder, first to (i)
institute suit or exhaust its remedies against Borrower or others liable on the
Loan or the Guaranteed Obligations or any other person, (ii) enforce Lender's
rights against any collateral which shall ever have been given to secure the
Loan, (iii) enforce Lender's rights against any other guarantors of the
Guaranteed Obligations, (iv) join Borrower or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (v)
exhaust any remedies available to Lender against any collateral which shall ever
have been given to secure the Loan, or (vi) resort to any other means of
obtaining payment of the Guaranteed Obligations. Lender shall not be required to
mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.
1.7 WAIVERS. Guarantor agrees to the provisions of the Loan Documents
and hereby waives notice, of and any rights of consent to (i) any loans or
advances made by Lender to Borrower, (ii) acceptance of this Guaranty, (iii) any
amendment or extension of the Note, the Mortgage, the Loan Agreement or of any
other Loan Documents, (iv) the execution and delivery by Borrower and Lender of
any other loan or credit agreement or of Borrower's execution and delivery of
any promissory notes or other documents arising under the Loan Documents or in
connection with the Property, (v) the occurrence of any breach by Borrower or an
Event of Default, (vi) Lender's transfer or disposition of the Guaranteed
Obligations, or any part thereof, (vii) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (viii) protest, proof of non-payment or default by Borrower, or
(ix) any other action at any time taken or omitted by Lender and, generally, all
demands and notices of every kind in connection with this Guaranty, the Loan
Documents, any documents or agreements evidencing, securing or relating to any
of the Guaranteed Obligations and the obligations hereby guaranteed.
1.8 PAYMENT OF EXPENSES. In the event that Guarantor should breach or
fail to timely perform any provisions of this Guaranty, Guarantor shall,
immediately upon demand by Lender, pay Lender all costs and expenses (including
court costs and attorneys' fees) incurred by Lender in the enforcement hereof or
the preservation of Lender's rights hereunder. The covenant contained in this
Section shall survive the payment and performance of the Guaranteed Obligations.
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1.9 EFFECT OF BANKRUPTCY. In the event that pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law or any
judgment, order or decision thereunder, Lender must rescind or restore any
payment or any part thereof received by Lender in satisfaction of the Guaranteed
Obligations, as set forth herein, any prior release or discharge from the terms
of this Guaranty given to Guarantor by Lender shall be without effect and this
Guaranty shall remain in full force and effect. It is the intention of Borrower
and Guarantor that Guarantor's obligations hereunder shall not be discharged
except by Guarantor's performance of such obligations and then only to the
extent of such performance.
1.10 WAIVER OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.
Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and
all rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor to the rights
of Lender), to assert any claim against or seek contribution, indemnification or
any other form of reimbursement from Borrower or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by
Guarantor under or in connection with this Guaranty or otherwise.
1.11 BORROWER. The term "BORROWER" as used herein shall include any new
or successor corporation, association, partnership (general or limited), limited
liability company joint venture, trust or other individual or organization
including any of same formed as a result of any merger, reorganization, sale,
transfer, devise, gift or bequest of Borrower or any interest in Borrower.
1.12 RELEASE OF GUARANTOR. Upon the substitution of Guarantor pursuant
to Section 8.3 of the Loan Agreement, Guarantor shall be released from any
liability or other obligation under this Guaranty first arising after the date
of such substitution.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR'S OBLIGATIONS
--------------------------------------
Guarantor hereby consents and agrees to each of the following and
agrees that Guarantor's obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by any of the following and
waives any common law, equitable, statutory or other rights (including without
limitation rights to notice) which Guarantor might otherwise have as a result of
or in connection with any of the following:
2.1 MODIFICATIONS. Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Guaranteed Obligations,
the Note, the Mortgage, the Loan Agreement, the other Loan Documents or any
other document, instrument, contract or understanding between Borrower and
Lender or any other parties pertaining to the Guaranteed Obligations or any
failure of Lender to notify Guarantor of any such action.
2.2 ADJUSTMENT. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by Lender to Borrower or any Guarantor.
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2.3 CONDITION OF BORROWER OR GUARANTOR. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower, Guarantor or any other party at any time liable for
the payment of all or part of the Guaranteed Obligations; or any dissolution of
Borrower or Guarantor or any sale, lease or transfer of any or all of the assets
of Borrower or Guarantor or any changes in the shareholders, partners or members
of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.
2.4 INVALIDITY OF GUARANTEED OBLIGATIONS. The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations or any
document or agreement executed in connection with the Guaranteed Obligations for
any reason whatsoever, including without limitation the fact that (i) the
Guaranteed Obligations or any part thereof exceeds the amount permitted by law,
(ii) the act of creating the Guaranteed Obligations or any part thereof is ultra
vires, (iii) the officers or representatives executing the Note, the Mortgage,
the Loan Agreement or the other Loan Documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed
Obligations violate applicable usury laws, (v) the Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Obligations wholly or partially uncollectible from Borrower, (vi) the
creation, performance or repayment of the Guaranteed Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible or unenforceable, or (vii) the Note, the Mortgage, the
Loan Agreement or any of the other Loan Documents have been forged or otherwise
are irregular or not genuine or authentic, it being agreed that Guarantor shall
remain liable hereon regardless of whether Borrower or any other person be found
not liable on the Guaranteed Obligations or any part thereof for any reason.
2.5 RELEASE OF OBLIGORS. Any full or partial release of the liability
of Borrower on the Guaranteed Obligations or any part thereof, or of any
co-guarantors, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations, or any part
thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties to pay or perform the
Guaranteed Obligations.
2.6 OTHER COLLATERAL. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.
2.7 RELEASE OF COLLATERAL. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations.
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2.8 CARE AND DILIGENCE. The failure of Lender or any other party to
exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of any
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (i) to take or prosecute any
action for the collection of any of the Guaranteed Obligations or (ii) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute to
completion any action to foreclose upon any security therefor, or (iii) to take
or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations.
2.9 UNENFORCEABILITY. The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations, or any part thereof,
shall not be properly perfected or created, or shall prove to be unenforceable
or subordinate to any other security interest or lien, it being recognized and
agreed by Guarantor that Guarantor is not entering into this Guaranty in
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.
2.10 OFFSET. The Note, the Guaranteed Obligations and the liabilities
and obligations of the Guarantor to Lender hereunder shall not be reduced,
discharged or released because of or by reason of any existing or future right
of offset, claim or defense of Borrower or Guarantor against Lender, or any
other party, or against payment of the Guaranteed Obligations, whether such
right of offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.
2.11 MERGER. The reorganization, merger or consolidation of Borrower
into or with any other Person.
2.12 PREFERENCE. Any payment by Borrower to Lender is held to
constitute a preference under bankruptcy laws or for any reason Lender is
required to refund such payment or pay such amount to Borrower or someone else.
2.13 OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or omitted
to be taken with respect to the Loan Documents, the Guaranteed Obligations, or
the security and collateral therefor, whether or not such action or omission
prejudices Guarantor or increases the likelihood that Guarantor will be required
to pay the Guaranteed Obligations pursuant to the terms hereof, it is the
unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full
and final payment and satisfaction of the Guaranteed Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce Lender to enter into the Loan Documents and extend credit to
Borrower, Guarantor represents and warrants to Lender as follows:
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3.1 BENEFIT. Guarantor is an Affiliate of Borrower, is the owner of a
direct or indirect interest in Borrower, and has received, or will receive,
direct or indirect benefit from the making of this Guaranty with respect to the
Guaranteed Obligations.
3.2 FAMILIARITY AND RELIANCE. Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
the Borrower and is familiar with the value of any and all collateral intended
to be created as security for the payment of the Note or Guaranteed Obligations;
however, Guarantor is not relying on such financial condition or the collateral
as an inducement to enter into this Guaranty.
3.3 NO REPRESENTATION BY LENDER. Neither Lender nor any other party has
made any representation, warranty or statement to Guarantor in order to induce
the Guarantor to execute this Guaranty.
3.4 GUARANTOR'S FINANCIAL CONDITION. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is and will be solvent and has and will have assets which, fairly
valued, exceed its obligations, liabilities (including contingent liabilities)
and debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities.
3.5 LEGALITY. The execution, delivery and performance by Guarantor of
this Guaranty and the consummation of the transactions contemplated hereunder do
not and will not contravene or conflict with any law, statute or regulation
whatsoever to which Guarantor is subject or constitute a default (or an event
which with notice or lapse of time or both would constitute a default) under, or
result in the breach of, any indenture, mortgage, charge, lien, or any contract,
agreement or other instrument to which Guarantor is a party or which may be
applicable to Guarantor. This Guaranty is a legal and binding obligation of
Guarantor and is enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.
3.6 LIENS. Guarantor has not created nor is the beneficiary of any
Liens encumbering the Property or any interest therein.
3.7 SURVIVAL. All representations and warranties made by Guarantor
herein shall survive the execution hereof.
ARTICLE IV
SUBORDINATION OF CERTAIN INDEBTEDNESS
-------------------------------------
4.1 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the term
"GUARANTOR CLAIMS" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
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be acquired by Guarantor. The Guarantor Claims shall include without limitation
all rights and claims of Guarantor against Borrower (arising as a result of
subrogation or otherwise) as a result of Guarantor's payment of all or a portion
of the Guaranteed Obligations. After the occurrence and during the continuance
of an Event of Default, Guarantor shall not receive or collect, directly or
indirectly, from Borrower or any other party any amount upon the Guarantor
Claims.
4.2 CLAIMS IN BANKRUPTCY. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor's relief, or other insolvency proceedings
involving Guarantor as debtor, Lender shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive directly
from the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Lender. Should Lender receive, for application against
the Guaranteed Obligations, any dividend or payment which is otherwise payable
to Guarantor and which, as between Borrower and Guarantor, shall constitute a
credit against the Guarantor Claims, then, upon payment to Lender in full of the
Guaranteed Obligations, Guarantor shall become subrogated to the rights of
Lender to the extent that such payments to Lender on the Guarantor Claims have
contributed toward the liquidation of the Guaranteed Obligations, and such
subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends or
payments upon the Guarantor Claims.
4.3 PAYMENTS HELD IN TRUST. In the event that, notwithstanding anything
to the contrary in this Guaranty, Guarantor should receive any funds, payment,
claim or distribution which is prohibited by this Guaranty, Guarantor agrees to
hold in trust for Lender an amount equal to the amount of all funds, payments,
claims or distributions so received, and agrees that it shall have absolutely no
dominion over the amount of such funds, payments, claims or distributions so
received except to pay them promptly to Lender, and Guarantor covenants promptly
to pay the same to Lender.
4.4 LIENS SUBORDINATE. Guarantor agrees that any liens, security
interests, judgment liens, charges or other encumbrances upon Borrower's assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon Borrower's assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of Guarantor or
Lender presently exist or are hereafter created or attach. Without the prior
written consent of Lender, Guarantor shall not (i) create any Liens encumbering
the Property or any interest therein, (ii) exercise or enforce any creditor's
right it may have against Borrower, or (iii) foreclose, repossess, sequester or
otherwise take steps or institute any action or proceedings (judicial or
otherwise, including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, mortgage, deeds of trust, security interests,
collateral rights, judgments or other encumbrances on assets of Borrower held by
Guarantor.
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ARTICLE V
MISCELLANEOUS
-------------
5.1 WAIVER. No failure to exercise, and no delay in exercising, on the
part of Lender, any right hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right. The rights of Lender hereunder shall
be in addition to all other rights provided by law. No modification or waiver of
any provision of this Guaranty, nor consent to departure therefrom, shall be
effective unless in writing and no such consent or waiver shall extend beyond
the particular case and purpose involved. No notice or demand given in any case
shall constitute a waiver of the right to take other action in the same, similar
or other instances without such notice or demand.
5.2 NOTICES. All notices, demands, requests, consents, approvals or
other communications (any of the foregoing, a "NOTICE") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such
other address as such party may hereafter specify in accordance with the
provisions of this Section 5.2. Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on the
date of sending by facsimile transmission if sent during business hours on a
Business Day (as defined in the Loan Agreement, otherwise on the next Business
Day), (c) on the date of delivery by hand if delivered during business hours on
a Business Day (otherwise on the next Business Day), and (d) on the next
Business Day if sent by an overnight commercial courier, in each case addressed
to the parties as follows:
If to Lender: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Facsimile No.: (212) 479-5800
with a copy to: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Facsimile No.: (212) 479-5800
with a copy to: Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
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If to Guarantor: Cedar Shopping Center Partnership, L.P.
44 South Bayles Avenue
Suite 304
Port Washington, NY 11050
with a copy to: Stroock & Stroock, & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attention: Steven Moscowitz
Facsimile No.: (212) 806 - 6006
5.3 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Guaranty shall be
governed by and construed in accordance with the laws of the State of New York
and the applicable laws of the United States of America. Any legal suit, action
or proceeding against Lender or Guarantor arising out of or relating to this
Guaranty may at Lender's option be instituted in any Federal or State court in
the City of New York, County of New York, pursuant to Section 5-1402 of the New
York General Obligations Law and Guarantor waives any objections which it may
now or hereafter have based on venue and/or forum non conveniens of any such
suit, action or proceeding, and Guarantor hereby irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding. Guarantor does
hereby designate and appoint:
STUART H. WIDOWSKI
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
as its authorized agent to accept and acknowledge on its behalf service of any
and all process which may be served in any such suit, action or proceeding in
any Federal or State court in New York, New York, and agrees that service of
process upon said agent at said address and written notice of said service
mailed or delivered to Guarantor in the manner provided herein shall be deemed
in every respect effective service of process upon Guarantor in any such suit,
action or proceeding in the State of New York.
5.4 INVALID PROVISIONS. If any provision of this Guaranty is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Guaranty, such provision shall be fully severable and this
Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty, unless such continued effectiveness of this
Guaranty, as modified, would be contrary to the basic understandings and
intentions of the parties as expressed herein.
5.5 AMENDMENTS. This Guaranty may be amended only by an instrument in
writing executed by the party or an authorized representative of the party
against whom such amendment is sought to be enforced.
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5.6 PARTIES BOUND; ASSIGNMENT; JOINT AND SEVERAL. This Guaranty shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives; provided, however,
that Guarantor may not, without the prior written consent of Lender, assign any
of its rights, powers, duties or obligations hereunder. If Guarantor consists of
more than one person or party, the obligations and liabilities of each such
person or party shall be joint and several.
5.7 HEADINGS. Section headings are for convenience of reference only
and shall in no way affect the interpretation of this Guaranty.
5.8 RECITALS. The recital and introductory paragraphs hereof are a part
hereof, form a basis for this Guaranty and shall be considered prima facie
evidence of the facts and documents referred to therein.
5.9 COUNTERPARTS. To facilitate execution, this Guaranty may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single instrument. It shall not
be necessary in making proof of this Guaranty to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
5.10 RIGHTS AND REMEDIES. If Guarantor becomes liable for any
indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of Lender hereunder shall be cumulative of any
and all other rights that Lender may ever have against Guarantor. The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.
5.11 OTHER DEFINED TERMS. Any capitalized term utilized herein shall
have the meaning as specified in the Loan Agreement, unless such term is
otherwise specifically defined herein.
5.12 ENTIRETY. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE GUARANTEED
OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
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USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
5.13 WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE MORTGAGE, THE LOAN
AGREEMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.
5.14 COOPERATION. Guarantor acknowledges that Lender and its successors
and assigns may (i) sell this Guaranty, the Note and other Loan Documents to one
or more investors as a whole loan, (ii) participate the Loan secured by this
Guaranty to one or more investors, (iii) deposit this Guaranty, the Note and
other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as
"SECONDARY MARKET TRANSACTION"). Guarantor shall cooperate with Lender in
effecting any such Secondary Market Transaction and shall cooperate to implement
all requirements imposed by any Rating Agency involved in any Secondary Market
Transaction. Guarantor shall provide such information and documents relating to
Guarantor, Borrower, the Property and any tenants of the Improvements as Lender
may reasonably request in connection with such Secondary Market Transaction. In
addition, Guarantor shall make available to Lender all information concerning
its business and operations that Lender may reasonably request. Lender shall be
permitted to share all such information with the investment banking firms,
Rating Agencies, accounting firms, law firms and other third-party advisory
firms involved with the Loan and the Loan Documents or the applicable Secondary
Market Transaction. It is understood that the information provided by Guarantor
to Lender may ultimately be incorporated into the offering documents for the
Secondary Market Transaction and thus various investors and potential investors
may also see some or all of the information. Lender and all of the aforesaid
third-party advisors and professional firms shall be entitled to rely on the
information supplied by, or on behalf of, Guarantor in the form as provided by
Guarantor. Lender may publicize the existence of the Loan in connection with its
marketing for a Secondary Market Transaction or otherwise as part of its
business development.
5.15 REINSTATEMENT IN CERTAIN CIRCUMSTANCES. If at any time any payment
of the principal of or interest under the Note or any other amount payable by
the Borrower under the Loan Documents is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, the Guarantor's obligations hereunder with respect to such payment
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shall be reinstated as though such payment has been due but not made at such
time.
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EXECUTED as of the day and year first above written.
GUARANTOR:
CEDAR SHOPPING CENTERS
PARTNERSHIP, L.P., a Delaware
limited partnership
By: Cedar Shopping Centers, Inc., a Maryland
corporation, its general partner
By:
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Name: Brenda J. Walker
Title: Vice President
EXHIBIT 10.19
SUPPLEMENTAL GUARANTY
This SUPPLEMENTAL GUARANTY (this "GUARANTY") is executed as of
November 1, 2004 by CEDAR SHOPPING CENTERS PARTNERSHIP, L.P. ("GUARANTOR"), for
the benefit of EUROHYPO AG, NEW YORK BRANCH, the New York branch of a German
banking corporation ("LENDER").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Promissory Note, dated of
even date herewith, executed by CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited
liability company ("BORROWER"), and payable to the order of Lender in the
original principal amount of FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($43,500,000.00) (together with all renewals, modifications,
increases and extensions thereof, the "NOTE"), Borrower has become indebted to
Lender with respect to a loan (the "LOAN") which is made pursuant to that
certain Loan Agreement, dated of even date herewith, between Borrower and Lender
(the "LOAN AGREEMENT");
WHEREAS, Lender is not willing to make the Loan, or otherwise
extend credit, to Borrower unless Guarantor unconditionally guarantees payment
and performance to Lender of the Guaranteed Obligations (as herein defined); and
WHEREAS, Guarantor is the owner of a direct or indirect
interest in Borrower, and Guarantor will directly benefit from Lender's making
the Loan to Borrower.
NOW, THEREFORE, as an inducement to Lender to make the Loan to
Borrower and to extend such additional credit as Lender may from time to time
agree to extend under the Loan Documents, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1 GUARANTY OF OBLIGATION. Guarantor hereby irrevocably and
unconditionally guarantees to Lender and its successors and assigns the payment
and performance of the Guaranteed Obligations as and when the same shall be due
and payable, whether by lapse of time, by acceleration of maturity or otherwise.
Guarantor hereby irrevocably and unconditionally covenants and agrees that it is
liable for the Guaranteed Obligations as a primary obligor. This Guaranty shall
terminate and be of no further force and effect upon Borrower's performance in
full of its obligations under Section 4.1.23 of the Loan Agreement.
1.2 DEFINITION OF GUARANTEED OBLIGATIONS. As used herein, the
term "GUARANTEED OBLIGATIONS" means the obligations or liabilities of Borrower
to Lender for any loss, damage, cost, expense, liability, claim or other
obligation incurred by Lender (including attorneys' fees and costs reasonably
incurred) arising out of or in connection with any breach of Borrower's payment
and performance obligations pursuant to Section 4.1.23 of the Loan Agreement.
1.3 NATURE OF GUARANTY. This Guaranty is an irrevocable,
absolute, continuing guaranty of payment and performance and not a guaranty of
collection. This Guaranty may not be revoked by Guarantor and shall continue to
be effective with respect to any Guaranteed Obligations arising or created after
any attempted revocation by Guarantor and after (if Guarantor is a natural
person) Guarantor's death (in which event this Guaranty shall be binding upon
Guarantor's estate and Guarantor's legal representatives and heirs). The fact
that at any time or from time to time the Guaranteed Obligations may be
increased or reduced shall not release or discharge the obligation of Guarantor
to Lender with respect to the Guaranteed Obligations. This Guaranty may be
enforced by Lender and any subsequent holder of the Note and shall not be
discharged by the assignment or negotiation of all or part of the Note.
1.4 GUARANTEED OBLIGATIONS NOT REDUCED BY OFFSET. The
Guaranteed Obligations and the liabilities and obligations of Guarantor to
Lender hereunder shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense of Borrower or any
other party against Lender or against payment of the Guaranteed Obligations,
whether such offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.
1.5 PAYMENT BY GUARANTOR. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, Guarantor shall, immediately upon demand by Lender
and without presentment, protest, notice of protest, notice of non-payment,
notice of intention to accelerate the maturity, notice of acceleration of the
maturity or any other notice whatsoever, unless required by applicable law, pay
in lawful money of the United States of America, the amount due on the
Guaranteed Obligations to Lender at Lender's address as set forth herein. Such
demand(s) may be made at any time coincident with or after the time for payment
of all or part of the Guaranteed Obligations and may be made from time to time
with respect to the same or different items of Guaranteed Obligations. Such
demand shall be deemed made, given and received in accordance with the notice
provisions hereof.
1.6 NO DUTY TO PURSUE OTHERS. It shall not be necessary for
Lender (and Guarantor hereby waives any rights which Guarantor may have to
require Lender), in order to enforce the obligations of Guarantor hereunder,
first to (i) institute suit or exhaust its remedies against Borrower or others
liable on the Loan or the Guaranteed Obligations or any other person, (ii)
enforce Lender's rights against any collateral which shall ever have been given
to secure the Loan, (iii) enforce Lender's rights against any other guarantors
of the Guaranteed Obligations, (iv) join Borrower or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (v)
exhaust any remedies available to Lender against any collateral which shall ever
have been given to secure the Loan, or (vi) resort to any other means of
obtaining payment of the Guaranteed Obligations. Lender shall not be required to
mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.
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1.7 WAIVERS. Guarantor agrees to the provisions of the Loan
Documents and hereby waives notice, of and any rights of consent to (i) any
loans or advances made by Lender to Borrower, (ii) acceptance of this Guaranty,
(iii) any amendment or extension of the Note, the Mortgage, the Loan Agreement
or of any other Loan Documents, (iv) the execution and delivery by Borrower and
Lender of any other loan or credit agreement or of Borrower's execution and
delivery of any promissory notes or other documents arising under the Loan
Documents or in connection with the Property, (v) the occurrence of any breach
by Borrower or an Event of Default, (vi) Lender's transfer or disposition of the
Guaranteed Obligations, or any part thereof, (vii) sale or foreclosure (or
posting or advertising for sale or foreclosure) of any collateral for the
Guaranteed Obligations, (viii) protest, proof of non-payment or default by
Borrower, or (ix) any other action at any time taken or omitted by Lender and,
generally, all demands and notices of every kind in connection with this
Guaranty, the Loan Documents, any documents or agreements evidencing, securing
or relating to any of the Guaranteed Obligations and the obligations hereby
guaranteed.
1.8 PAYMENT OF EXPENSES. In the event that Guarantor should
breach or fail to timely perform any provisions of this Guaranty, Guarantor
shall, immediately upon demand by Lender, pay Lender all costs and expenses
(including court costs and attorneys' fees) incurred by Lender in the
enforcement hereof or the preservation of Lender's rights hereunder. The
covenant contained in this Section shall survive the payment and performance of
the Guaranteed Obligations.
1.9 EFFECT OF BANKRUPTCY. In the event that pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law
or any judgment, order or decision thereunder, Lender must rescind or restore
any payment or any part thereof received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lender shall be without effect
and this Guaranty shall remain in full force and effect. It is the intention of
Borrower and Guarantor that Guarantor's obligations hereunder shall not be
discharged except by Guarantor's performance of such obligations and then only
to the extent of such performance.
1.10 WAIVER OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.
Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and
all rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor to the rights
of Lender), to assert any claim against or seek contribution, indemnification or
any other form of reimbursement from Borrower or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by
Guarantor under or in connection with this Guaranty or otherwise.
1.11 BORROWER. The term "BORROWER" as used herein shall
include any new or successor corporation, association, partnership (general or
limited), limited liability company joint venture, trust or other individual or
organization including any of same formed as a result of any merger,
reorganization, sale, transfer, devise, gift or bequest of Borrower or any
interest in Borrower.
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1.12 RELEASE OF GUARANTOR. Upon the substitution of Guarantor
pursuant to Section 8.3 of the Loan Agreement, Guarantor shall be released from
any liability or other obligation under this Guaranty first arising after the
date of such substitution.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR'S OBLIGATIONS
Guarantor hereby consents and agrees to each of the following
and agrees that Guarantor's obligations under this Guaranty shall not be
released, diminished, impaired, reduced or adversely affected by any of the
following and waives any common law, equitable, statutory or other rights
(including without limitation rights to notice) which Guarantor might otherwise
have as a result of or in connection with any of the following:
2.1 MODIFICATIONS. Any renewal, extension, increase,
modification, alteration or rearrangement of all or any part of the Guaranteed
Obligations, the Note, the Mortgage, the Loan Agreement, the other Loan
Documents or any other document, instrument, contract or understanding between
Borrower and Lender or any other parties pertaining to the Guaranteed
Obligations or any failure of Lender to notify Guarantor of any such action.
2.2 ADJUSTMENT. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by Lender to Borrower or any
Guarantor.
2.3 CONDITION OF BORROWER OR GUARANTOR. The insolvency,
bankruptcy, arrangement, adjustment, composition, liquidation, disability,
dissolution or lack of power of Borrower, Guarantor or any other party at any
time liable for the payment of all or part of the Guaranteed Obligations; or any
dissolution of Borrower or Guarantor or any sale, lease or transfer of any or
all of the assets of Borrower or Guarantor or any changes in the shareholders,
partners or members of Borrower or Guarantor; or any reorganization of Borrower
or Guarantor.
2.4 INVALIDITY OF GUARANTEED OBLIGATIONS. The invalidity,
illegality or unenforceability of all or any part of the Guaranteed Obligations
or any document or agreement executed in connection with the Guaranteed
Obligations for any reason whatsoever, including without limitation the fact
that (i) the Guaranteed Obligations or any part thereof exceeds the amount
permitted by law, (ii) the act of creating the Guaranteed Obligations or any
part thereof is ultra vires, (iii) the officers or representatives executing the
Note, the Mortgage, the Loan Agreement or the other Loan Documents or otherwise
creating the Guaranteed Obligations acted in excess of their authority, (iv) the
Guaranteed Obligations violate applicable usury laws, (v) the Borrower has valid
defenses, claims or offsets (whether at law, in equity or by agreement) which
render the Guaranteed Obligations wholly or partially uncollectible from
Borrower, (vi) the creation, performance or repayment of the Guaranteed
Obligations (or the execution, delivery and performance of any document or
instrument representing part of the Guaranteed Obligations or executed in
connection with the Guaranteed Obligations or given to secure the repayment of
the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii)
the Note, the Mortgage, the Loan Agreement or any of the other Loan Documents
have been forged or otherwise are irregular or not genuine or authentic, it
being agreed that Guarantor shall remain liable hereon regardless of whether
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Borrower or any other person be found not liable on the Guaranteed Obligations
or any part thereof for any reason.
2.5 RELEASE OF OBLIGORS. Any full or partial release of the
liability of Borrower on the Guaranteed Obligations or any part thereof, or of
any co-guarantors, or any other Person now or hereafter liable, whether directly
or indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations, or any part
thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other parties to pay or perform the
Guaranteed Obligations.
2.6 OTHER COLLATERAL. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all or any
part of the Guaranteed Obligations.
2.7 RELEASE OF COLLATERAL. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations.
2.8 CARE AND DILIGENCE. The failure of Lender or any other
party to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of any
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (i) to take or prosecute any
action for the collection of any of the Guaranteed Obligations or (ii) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute to
completion any action to foreclose upon any security therefor, or (iii) to take
or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations.
2.9 UNENFORCEABILITY. The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations, or any part
thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.
2.10 OFFSET. The Note, the Guaranteed Obligations and the
liabilities and obligations of the Guarantor to Lender hereunder shall not be
reduced, discharged or released because of or by reason of any existing or
future right of offset, claim or defense of Borrower or Guarantor against
Lender, or any other party, or against payment of the Guaranteed Obligations,
whether such right of offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the Guaranteed Obligations)
or otherwise.
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2.11 MERGER. The reorganization, merger or consolidation of
Borrower into or with any other Person.
2.12 PREFERENCE. Any payment by Borrower to Lender is held to
constitute a preference under bankruptcy laws or for any reason Lender is
required to refund such payment or pay such amount to Borrower or someone else.
2.13 OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or
omitted to be taken with respect to the Loan Documents, the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices Guarantor or increases the likelihood that Guarantor will
be required to pay the Guaranteed Obligations pursuant to the terms hereof, it
is the unambiguous and unequivocal intention of Guarantor that Guarantor shall
be obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full
and final payment and satisfaction of the Guaranteed Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into the Loan Documents and extend
credit to Borrower, Guarantor represents and warrants to Lender as follows:
3.1 BENEFIT. Guarantor is an Affiliate of Borrower, is the
owner of a direct or indirect interest in Borrower, and has received, or will
receive, direct or indirect benefit from the making of this Guaranty with
respect to the Guaranteed Obligations.
3.2 FAMILIARITY AND RELIANCE. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of the Borrower and is familiar with the value of any and all collateral
intended to be created as security for the payment of the Note or Guaranteed
Obligations; however, Guarantor is not relying on such financial condition or
the collateral as an inducement to enter into this Guaranty.
3.3 NO REPRESENTATION BY LENDER. Neither Lender nor any other
party has made any representation, warranty or statement to Guarantor in order
to induce the Guarantor to execute this Guaranty.
3.4 GUARANTOR'S FINANCIAL CONDITION. As of the date hereof,
and after giving effect to this Guaranty and the contingent obligation evidenced
hereby, Guarantor is and will be solvent and has and will have assets which,
fairly valued, exceed its obligations, liabilities (including contingent
liabilities) and debts, and has and will have property and assets sufficient to
satisfy and repay its obligations and liabilities.
3.5 LEGALITY. The execution, delivery and performance by
Guarantor of this Guaranty and the consummation of the transactions contemplated
hereunder do not and will not contravene or conflict with any law, statute or
regulation whatsoever to which Guarantor is subject or constitute a default (or
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an event which with notice or lapse of time or both would constitute a default)
under, or result in the breach of, any indenture, mortgage, charge, lien, or any
contract, agreement or other instrument to which Guarantor is a party or which
may be applicable to Guarantor. This Guaranty is a legal and binding obligation
of Guarantor and is enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.
3.6 LIENS. Guarantor has not created nor is the beneficiary of
any Liens encumbering the Property or any interest therein.
3.7 SURVIVAL. All representations and warranties made by
Guarantor herein shall survive the execution hereof. ARTICLE IV
SUBORDINATION OF CERTAIN INDEBTEDNESS
4.1 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "GUARANTOR CLAIMS" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by Guarantor. The Guarantor Claims shall include without limitation
all rights and claims of Guarantor against Borrower (arising as a result of
subrogation or otherwise) as a result of Guarantor's payment of all or a portion
of the Guaranteed Obligations. After the occurrence and during the continuation
of an Event of Default, Guarantor shall not receive or collect, directly or
indirectly, from Borrower or any other party any amount upon the Guarantor
Claims.
4.2 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving Guarantor as debtor, Lender shall have the right to prove
its claim in any such proceeding so as to establish its rights hereunder and
receive directly from the receiver, trustee or other court custodian dividends
and payments which would otherwise be payable upon Guarantor Claims. Guarantor
hereby assigns such dividends and payments to Lender. Should Lender receive, for
application against the Guaranteed Obligations, any dividend or payment which is
otherwise payable to Guarantor and which, as between Borrower and Guarantor,
shall constitute a credit against the Guarantor Claims, then, upon payment to
Lender in full of the Guaranteed Obligations, Guarantor shall become subrogated
to the rights of Lender to the extent that such payments to Lender on the
Guarantor Claims have contributed toward the liquidation of the Guaranteed
Obligations, and such subrogation shall be with respect to that proportion of
the Guaranteed Obligations which would have been unpaid if Lender had not
received dividends or payments upon the Guarantor Claims.
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4.3 PAYMENTS HELD IN TRUST. In the event that, notwithstanding
anything to the contrary in this Guaranty, Guarantor should receive any funds,
payment, claim or distribution which is prohibited by this Guaranty, Guarantor
agrees to hold in trust for Lender an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions so received except to pay them promptly to Lender, and Guarantor
covenants promptly to pay the same to Lender.
4.4 LIENS SUBORDINATE. Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of the Guarantor Claims shall be and remain
inferior and subordinate to any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Obligations, regardless of whether such encumbrances in favor of
Guarantor or Lender presently exist or are hereafter created or attach. Without
the prior written consent of Lender, Guarantor shall not (i) create any Liens
encumbering the Property or any interest therein, (ii) exercise or enforce any
creditor's right it may have against Borrower, or (iii) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any liens, mortgage, deeds of trust, security
interests, collateral rights, judgments or other encumbrances on assets of
Borrower held by Guarantor.
ARTICLE V
MISCELLANEOUS
5.1 WAIVER. No failure to exercise, and no delay in
exercising, on the part of Lender, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of
Lender hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of this Guaranty, nor consent to
departure therefrom, shall be effective unless in writing and no such consent or
waiver shall extend beyond the particular case and purpose involved. No notice
or demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.
5.2 NOTICES. All notices, demands, requests, consents,
approvals or other communications (any of the foregoing, a "NOTICE") required,
permitted, or desired to be given hereunder shall be in writing sent by telefax
(with answer back acknowledged) or by registered or certified mail, postage
prepaid, return receipt requested, or delivered by hand or reputable overnight
courier addressed to the party to be so notified at its address hereinafter set
forth, or to such other address as such party may hereafter specify in
accordance with the provisions of this Section 5.2. Any Notice shall be deemed
to have been received: (a) three (3) days after the date such Notice is mailed,
(b) on the date of sending by facsimile transmission if sent during business
hours on a Business Day (as defined in the Loan Agreement, otherwise on the next
Business Day), (c) on the date of delivery by hand if delivered during business
hours on a Business Day (otherwise on the next Business Day), and (d) on the
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next Business Day if sent by an overnight commercial courier, in each case
addressed to the parties as follows:
If to Lender: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Facsimile No.: (212) 479-5800
with a copy to: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Facsimile No.: (212) 479-5800
with a copy to: Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
If to Guarantor: Cedar Shopping Center Partnership, L.P.
44 South Bayles Avenue
Suite 304
Port Washington, NY 11050
Attn: Brenda Walker
Stuart Widowski
Fax No.: (516) 767-6497
with a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attn: Steven P. Moskowitz
Fax No.: (212) 806-6006
5.3 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Guaranty
shall be governed by and construed in accordance with the laws of the State of
New York and the applicable laws of the United States of America. Any legal
suit, action or proceeding against Lender or Guarantor arising out of or
relating to this Guaranty may at Lender's option be instituted in any Federal or
State court in the City of New York, County of New York, pursuant to Section
5-1402 of the New York General Obligations Law and Guarantor waives any
objections which it may now or hereafter have based on venue and/or forum non
conveniens of any such suit, action or proceeding, and Guarantor hereby
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irrevocably submits to the jurisdiction of any such court in any suit, action or
proceeding. Guarantor does hereby designate and appoint:
Stuart H. Widowski
44 South Bayles Avenue
Port Washington, New York 11050
as its authorized agent to accept and acknowledge on its behalf service of any
and all process which may be served in any such suit, action or proceeding in
any Federal or State court in New York, New York, and agrees that service of
process upon said agent at said address and written notice of said service
mailed or delivered to Guarantor in the manner provided herein shall be deemed
in every respect effective service of process upon Guarantor in any such suit,
action or proceeding in the State of New York.
5.4 INVALID PROVISIONS. If any provision of this Guaranty is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Guaranty, such provision shall be fully
severable and this Guaranty shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this Guaranty,
and the remaining provisions of this Guaranty shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Guaranty, unless such continued
effectiveness of this Guaranty, as modified, would be contrary to the basic
understandings and intentions of the parties as expressed herein.
5.5 AMENDMENTS. This Guaranty may be amended only by an
instrument in writing executed by the party or an authorized representative of
the party against whom such amendment is sought to be enforced.
5.6 PARTIES BOUND; ASSIGNMENT; JOINT AND SEVERAL. This
Guaranty shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and legal representatives; provided,
however, that Guarantor may not, without the prior written consent of Lender,
assign any of its rights, powers, duties or obligations hereunder. If Guarantor
consists of more than one person or party, the obligations and liabilities of
each such person or party shall be joint and several.
5.7 HEADINGS. Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Guaranty.
5.8 RECITALS. The recital and introductory paragraphs hereof
are a part hereof, form a basis for this Guaranty and shall be considered prima
facie evidence of the facts and documents referred to therein.
5.9 COUNTERPARTS. To facilitate execution, this Guaranty may
be executed in as many counterparts as may be convenient or required. It shall
not be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single instrument. It shall not
be necessary in making proof of this Guaranty to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
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signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
5.10 RIGHTS AND REMEDIES. If Guarantor becomes liable for any
indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of Lender hereunder shall be cumulative of any
and all other rights that Lender may ever have against Guarantor. The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.
5.11 OTHER DEFINED TERMS. Any capitalized term utilized herein
shall have the meaning as specified in the Loan Agreement, unless such term is
otherwise specifically defined herein.
5.12 ENTIRETY. THIS GUARANTY EMBODIES THE FINAL, ENTIRE
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
5.13 WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR HEREBY AGREES
NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES
ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE MORTGAGE, THE LOAN
AGREEMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.
5.14 COOPERATION. Guarantor acknowledges that Lender and its
successors and assigns may (i) sell this Guaranty, the Note and other Loan
Documents to one or more investors as a whole loan, (ii) participate the Loan
secured by this Guaranty to one or more investors, (iii) deposit this Guaranty,
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the Note and other Loan Documents with a trust, which trust may sell
certificates to investors evidencing an ownership interest in the trust assets,
or (iv) otherwise sell the Loan or interest therein to investors (the
transactions referred to in clauses (i) through (iv) are hereinafter each
referred to as "SECONDARY MARKET TRANSACTION"). Guarantor shall cooperate with
Lender in effecting any such Secondary Market Transaction and shall cooperate to
implement all requirements imposed by any Rating Agency involved in any
Secondary Market Transaction. Guarantor shall provide such information and
documents relating to Guarantor, Borrower, the Property and any tenants of the
Improvements as Lender may reasonably request in connection with such Secondary
Market Transaction. In addition, Guarantor shall make available to Lender all
information concerning its business and operations that Lender may reasonably
request. Lender shall be permitted to share all such information with the
investment banking firms, Rating Agencies, accounting firms, law firms and other
third-party advisory firms involved with the Loan and the Loan Documents or the
applicable Secondary Market Transaction. It is understood that the information
provided by Guarantor to Lender may ultimately be incorporated into the offering
documents for the Secondary Market Transaction and thus various investors and
potential investors may also see some or all of the information. Lender and all
of the aforesaid third-party advisors and professional firms shall be entitled
to rely on the information supplied by, or on behalf of, Guarantor in the form
as provided by Guarantor. Lender may publicize the existence of the Loan in
connection with its marketing for a Secondary Market Transaction or otherwise as
part of its business development.
5.15 REINSTATEMENT IN CERTAIN CIRCUMSTANCES. If at any time
any payment of the principal of or interest under the Note or any other amount
payable by the Borrower under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, the Guarantor's obligations hereunder with respect
to such payment shall be reinstated as though such payment has been due but not
made at such time.
[NO FURTHER TEXT ON THIS PAGE]
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EXECUTED as of the day and year first above written.
GUARANTOR:
CEDAR SHOPPING CENTERS PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Cedar Shopping Centers, Inc., a Maryland
corporation, its general partner
By:
----------------------------------
Name: Brenda J. Walker
Title: Vice President
EXHIBIT 10.20
CASH MANAGEMENT AGREEMENT
Dated: as of November 1, 2004
AMONG
CEDAR-FRANKLIN VILLAGE LLC
as Borrower
AND
EUROHYPO AG, NEW YORK BRANCH
as Lender
AND
PNC BANK, NATIONAL ASSOCIATION
as Agent
AND
CALARESE PROPERTIES, INC.
as Manager
CASH MANAGEMENT AGREEMENT
CASH MANAGEMENT AGREEMENT (this "Agreement"), dated as of November 1,
2004, among CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited liability company
("Borrower"), PNC BANK, National Association, a national banking association
("Agent"), EUROHYPO AG, NEW YORK BRANCH, the New York branch of a German banking
corporation ("Lender") and CALARESE PROPERTIES, INC., a Massachusetts
corporation ("Manager").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a certain Loan Agreement (the "Loan Agreement")
dated the date hereof between Borrower and Lender, Lender has made a loan to
Borrower in the principal amount of $43,500,000.00;
WHEREAS, pursuant to the Mortgage and the Assignment of Leases,
Borrower has granted to Lender a security interest in all of Borrower's right,
title and interest in, to and under the Rents, and has assigned and conveyed to
Lender all of Borrower's right, title and interest in, to and under the Rents
due and to become due to Borrower or to which Borrower is now or may hereafter
become entitled, arising out of the Property or any part or parts thereof;
WHEREAS, Borrower and Manager have entered into a management agreement
with respect to the Property of even date herewith, pursuant to which Manager
has agreed to manage the Property; and
WHEREAS, pursuant to the Clearing Account Agreement, the Clearing
Account Bank shall receive and process all Rents and shall transfer by wire
transfer or via the ACH System to the Deposit Account all amounts constituting
available funds on deposit in the Clearing Account;
NOW, THEREFORE, in consideration of the covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
I. DEFINITIONS
Capitalized terms not otherwise defined herein shall have the meaning
set forth in the Loan Agreement. As used herein, the following terms shall have
the following definitions:
"Accounts" means, collectively, the Capital Expenditure Account, the
Debt Service Account, the Insurance Account, the Deposit Account, the Required
Repair Account, the Rollover Account and the Tax Account.
"ACH System" means the automated clearinghouse system.
"Agent" shall mean PNC Bank, National Association, as agent under this
Agreement, together with its successors and assigns.
"Agreement" this Cash Management Agreement dated as of October ___
2004, among Borrower, Manager, Agent and Lender, as amended, supplemented or
otherwise modified from time to time.
"Borrower" Cedar-Franklin Village LLC, together with its successors and
permitted assigns.
"Capital Expenditure Account" as defined in Section 2.1(f).
"Clearing Account" that certain collection account established by
Borrower with Clearing Account Bank into which Borrower and Manager shall cause
all Rents to be deposited in accordance with the terms and conditions of the
Clearing Account Agreement.
"Clearing Account Agreement" that certain Clearing Account Agreement
dated as of the date hereof, among Borrower, Lender and Clearing Account Bank.
"Clearing Account Bank" Northfork Bank, together with its successors
and assigns.
"Collateral" as defined in Section 5.1.
"Debt Service Account" as defined in Section 2.1(b).
"Deposit Account" as defined in Section 2.1 (a).
"Eligible Account" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (i) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (ii)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R.
ss.9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by Standard & Poor's Ratings Group, P-1 by Moody's Investors Service, Inc. and
F-1+ by Fitch, Inc. in the case of accounts in which funds are held for thirty
(30) days or less (or, in the case of accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least "AA" by Fitch and S&P and "Aa2" by Moody's).
"Insurance Account" as defined in Section 2.1(d).
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"Lender" shall mean Eurohypo AG, New York Branch, together with its
successors and assigns.
"Manager" shall mean Calarese Properties, Inc., together with its
successors and permitted assigns, and the Approved Property Manager (as defined
in the Loan Agreement).
"Monthly Capital Expenditure Amount" shall mean the monthly deposit for
Capital Expenditures required pursuant to Section 6.4 of the Loan Agreement.
"Monthly Insurance Amount" shall mean the monthly deposit for Insurance
Premiums required pursuant to Section 6.3 of the Loan Agreement.
"Monthly Payment Date" shall have the meaning ascribed to it in the
Loan Agreement.
"Monthly Rollover Amount" shall mean the monthly deposit for leasing
commissions and tenant improvement expenditures required pursuant to Section 6.5
of the Loan Agreement.
"Monthly Tax Amount" shall mean the monthly deposit for Taxes required
pursuant to Section 6.2 of the Loan Agreement.
"Obligations" as defined in Section 5.1.
"Permitted Investments" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by any Servicer, the trustee under any Securitization or
any of their respective Affiliates, payable on demand or having a maturity date
not later than the Business Day immediately prior to the first Monthly Payment
Date following the date of acquiring such investment and meeting one of the
appropriate standards set forth below:
(i) obligations of, or obligations fully guaranteed as to payment of
principal and interest by, the United States or any agency or instrumentality
thereof, provided such obligations are backed by the full faith and credit of
the United States of America including, without limitation, obligations of: the
U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home
Administration (certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S. Maritime Administration
(guaranteed Title XI financing), the Small Business Administration (guaranteed
participation certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority bonds) and the
Washington Metropolitan Area Transit Authority (guaranteed transit bonds);
provided, however, that the investments described in this clause (i) must (A)
have a predetermined fixed dollar amount of principal due at maturity that
cannot vary or change, (B) if rated by S&P, not have an "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest, have
an interest rate tied to a single interest rate index plus a fixed spread (if
any) and must move proportionately with that index, and (D) not be subject to
liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
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(iii) obligations of the following United States government sponsored
agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Student Loan Marketing Association (debt obligations), the
Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the investments described in this clause
(iii) must (A) have a predetermined fixed dollar amount of principal due at
maturity that cannot vary or change, (B) if rated by S&P, not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, have an interest rate tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that index, and
(D) not be subject to liquidation prior to their maturity;
(iv) federal funds, unsecured certificates of deposit, time deposits,
bankers' acceptances and repurchase agreements with maturities of not more than
365 days of any bank, the short term obligations of which at all times are rated
in the highest short term rating category by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency in the highest
short term rating category and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial or, if higher, then
current ratings assigned to the certificates); provided, however, that the
investments described in this clause (iv) must (A) have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change, (B) if
rated by S&P, not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, have an interest rate tied to a
single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) not be subject to liquidation prior to
their maturity;
(v) fully Federal Deposit Insurance Corporation-insured demand and time
deposits in, or certificates of deposit of, or bankers' acceptances issued by,
any bank or trust company, savings and loan association or savings bank, the
short term obligations of which at all times are rated in the highest short term
rating category by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency in the highest short term rating category
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial or, if higher, then current ratings
assigned to the certificates); provided, however, that the investments described
in this clause (v) must (A) have a predetermined fixed dollar of principal due
at maturity that cannot vary or change, (B) if rated by S&P, not have a "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, have an interest rate tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately with that index, and
(D) not be subject to liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365 days and at
all times rated by each Rating Agency (or, if not rated by all Rating Agencies,
rated by at least one Rating Agency and otherwise acceptable to each other
Rating Agency, as confirmed in writing that such investments would not, in and
of itself, result in a downgrade, qualification or withdrawal of the initial or,
if higher, then current ratings assigned to the certificates) in its highest
long-term unsecured debt rating category; provided, however, that the
investments described in this clause (vi) must (A) have a predetermined fixed
dollar amount of principal due at maturity that cannot vary or change, (B) if
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rated by S&P, not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, have an interest rate tied to a
single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) not be subject to liquidation prior to
their maturity;
(vii) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities
of not more than 365 days and that at all times is rated by each Rating Agency
(or, if not rated by all Rating Agencies, rated by at least one Rating Agency
and otherwise acceptable to each other Rating Agency, as confirmed in writing
that such investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial or, if higher, then current ratings
assigned to the certificates) in its highest short-term unsecured debt rating;
provided, however, that the investments described in this clause (vii) must (A)
have a predetermined fixed dollar amount of principal due at maturity that
cannot vary or change, (B) if rated by S&P, not have a "r" highlighter affixed
to their rating, (C) if such investments have a variable rate of interest, have
an interest rate tied to a single interest rate index plus a fixed spread (if
any) and must move proportionately with that index, and (D) not be subject to
liquidation prior to their maturity;
(viii) units of taxable money market funds, which funds are regulated
investment companies, seek to maintain a constant net asset value per share and
have the highest rating from each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each
other Rating Agency, as confirmed in writing that such investment would not, in
and of itself, result in a downgrade, qualification or withdrawal of the initial
or, if higher, then current ratings assigned to the certificates) for money
market funds; and
(ix) any other security, obligation or investment which has been
approved as a Permitted Investment in writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written confirmation that the designation of such
security, obligation or investment as a Permitted Investment will not, in and of
itself, result in a downgrade, qualification or withdrawal of the initial or, if
higher, then current ratings assigned to the certificates by such Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and no obligation or security shall be a Permitted Investment
if (A) such obligation or security evidences a right to receive only interest
payments or (B) the right to receive principal and interest payments on such
obligation or security are derived from an underlying investment that provides a
yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
"Required Repair Account" as defined in Section 2.1(g).
"Rollover Account" as defined in Section 2.1(e).
"Tax Account" as defined in Section 2.1(c).
"Tenant Direction Letter" as defined in Section 2.2(a).
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"UCC" as defined in Section 5.1(a)(iv).
II. THE ACCOUNTS
Section 2.1 ESTABLISHMENT OF ACCOUNTS. Borrower acknowledges and
confirms that Borrower has established the following Accounts with Agent:
(a) An account into which the Clearing Account Bank shall transfer by
wire transfer or via the ACH System all amounts constituting available funds on
deposit in the Clearing Account (the "Deposit Account");
(b) An account into which Borrower shall deposit, or cause to be
deposited, the amounts required for the payment of Debt Service under the Loan
(the "Debt Service Account");
(c) An account into which Borrower shall deposit, or cause to be
deposited, the sums required to be deposited pursuant to the Loan Agreement for
the payment of Taxes (the "Tax Account");
(d) An account into which Borrower shall deposit, or cause to be
deposited, the sums required to be deposited pursuant to the Loan Agreement for
the payment of Insurance Premiums (the "Insurance Account");
(e) An account into which Borrower shall deposit, or cause to be
deposited, the sums required to be deposited pursuant to the Loan Agreement for
the payment of leasing commissions and tenant improvement expenditures (the
"Rollover Account").
(f) An account into which Borrower shall deposit, or cause to be
deposited, the sums required to be deposited pursuant to the Loan Agreement for
the payment of Capital Expenditures (the "Capital Expenditure Account"); and
(g) An account into which Borrower shall deposit, or cause to be
deposited, the sums required to be deposited pursuant to the Loan Agreement for
the payment of the Required Repairs (the "Required Repair Account").
Section 2.2 DEPOSITS INTO DEPOSIT ACCOUNT. Borrower and Manager
represent, warrant and covenant that:
(a) Borrower and Manager shall cause all Rents to be deposited directly
into the Clearing Account. Without limitation of the foregoing, Borrower shall
notify, advise and irrevocably direct each Tenant under each Lease (whether such
Lease is presently effective or executed after the date hereof) to send directly
to the Clearing Account all payments of Rent pursuant to an instruction letter
in the form of Exhibit A attached hereto (a "Tenant Direction Letter").
(b) Commencing with the first billing statement delivered after the
date hereof and for each subsequent statement delivered, Borrower and Manager
shall instruct all Persons that maintain open accounts with Borrower or Manager
or with whom Borrower or Manager does business on an "accounts receivable" basis
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with respect to the Property to deliver all payments due under such accounts to
the Clearing Account. Neither Borrower nor Manager shall direct any such Person
to make payments due under such accounts in any other manner. (c) intentionally
omitted (d) If, notwithstanding the provisions of this Section 2.2, Borrower or
Manager receives any Rents or other income from the Property, then (i) such
amounts shall be deemed to be Collateral and shall be held in trust for the
benefit, and as the property, of Lender, (ii) such amounts shall not be
commingled with any other funds or property of Borrower or Manager, and (iii)
Borrower or Manager shall deposit such amounts in the Clearing Account within
two (2) Business Days of receipt. (e) Without the prior written consent of
Lender, neither Borrower nor Manager shall (i) terminate, amend, revoke or
modify any Tenant Direction Letter in any manner whatsoever, (ii) direct or
cause any Tenant to pay any amount in any manner other than as provided in the
related Tenant Direction Letter. (f) There are no other accounts maintained by
Borrower, Manager or any other Person into which revenues from the ownership and
operation of the Property are deposited other than with respect to revenues
Borrower is entitled to receive pursuant to the terms of the Loan Documents. So
long as the Note shall be outstanding, neither Borrower, Manager nor any other
Person shall open any other such account for the deposit of Rent or revenues
from the Property.
Section 2.3 ACCOUNT NAME. The Accounts shall each be exclusively in the
name of Lender; provided, however, that in the event Lender transfers or assigns
the Loan, Agent, at Lender's request, shall change the name of each Account to
the name of the transferee or assignee. In the event Lender retains a Servicer
to service the Loan, Agent, at Lender's request, shall comply with the
instructions of Servicer, as agent for Lender.
Section 2.4 ELIGIBLE ACCOUNTS/CHARACTERIZATION OF ACCOUNTS. Borrower
and Agent shall maintain each Account as an Eligible Account. Each Account is
and shall be treated either as a "securities account" as such term is defined in
Section 8-501(a) of the UCC or a "deposit account" as defined in Section
9-102(a)(29) of the UCC. Agent acknowledges and agrees that the Deposit Account
is intended to be a deposit accounts and the Capital Expenditure Account, the
Debt Service Account, the Insurance Account, the Required Repair Account, the
Rollover Account and the Tax Account are intended to be securities accounts.
Agent hereby agrees that each item of property (whether investment property,
financial asset, securities, instrument, cash or other property) credited to
each Account shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC. Agent shall, subject to the terms of this
Agreement, treat Lender as entitled to exercise the rights that comprise any
financial asset credited to each Account. All securities or other property
underlying any financial assets credited to each Account shall be registered in
the name of Agent, endorsed to Agent or in blank or credited to another
securities account maintained in the name of Agent and in no case will any
financial asset credited to any Account be registered in the name of Borrower,
payable to the order of Borrower or specially indorsed to Borrower.
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Section 2.5 PERMITTED INVESTMENTS. Sums on deposit in the Accounts
shall not be invested except in Permitted Investments. Except during the
existence of any Event of Default, Borrower shall have the right to direct Agent
to invest sums on deposit in the Accounts in Permitted Investments no more than
one time per month; provided, however, in no event shall Borrower direct Agent
to make a Permitted Investment if the maturity date of that Permitted Investment
is later than the date on which the invested sums are required for payment of an
obligation for which the Account was created. Borrower hereby irrevocably
authorizes and directs Agent to apply any income earned from Permitted
Investments to the respective Accounts. The amount of actual losses sustained on
a liquidation of a Permitted Investment shall be deposited into the Deposit
Account by Borrower no later than two (2) Business Days following such
liquidation. All income earned on the funds in the Accounts shall belong to
Borrower and shall be credited to such Accounts. Borrower shall be responsible
for payment of any federal, state or local income or other tax applicable to
income earned from Permitted Investments. The Accounts shall be assigned the
federal tax identification number of Borrower, which number is 20-1414039.
III. DEPOSITS
Section 3.1 INITIAL DEPOSITS.
(a) Borrower shall deposit in the Tax Account on the date hereof the
amount of $29,845.90.
(b) Borrower shall deposit in the Insurance Account on the date hereof
the amount of $5,730.00.
(c) Borrower shall deposit in the Rollover Account on the date hereof
the amount of $32,000.00.
(d) Borrower shall deposit in the Capital Expenditure Account on the
date hereof the amount of $2,514.16.
(e) Borrower shall deposit in the Required Repairs Account on the date
hereof the amount of $57,438.00
Section 3.2 ADDITIONAL DEPOSITS. Borrower shall make such additional
deposits into the Accounts as may be required by the Loan Agreement.
Section 3.3 DISBURSEMENTS FROM THE DEPOSIT ACCOUNT.
(a) Agent shall withdraw all available funds on deposit in the Deposit
Account on every Business Day of each calendar month and disburse such funds in
the following amounts in the following order of priority:
(i) First, funds sufficient to pay the Monthly Tax Amount for
the next calendar month shall be deposited in the Tax Account;
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(ii) Then, funds sufficient to pay the Monthly Insurance
Amount for the next calendar month shall be deposited in the Insurance
Account;
(iii) Then, funds sufficient to pay the Monthly Debt Service
Payment Amount for the next calendar month shall be deposited in the
Debt Service Account;
(iv) Then, funds sufficient to pay the Monthly Capital
Expenditure Amount for the next calendar month shall be deposited in
the Capital Expenditure Account;
(v) Then, funds sufficient to pay the Monthly Rollover Amount
for the next calendar month shall be deposited into the Rollover
Account;
(vi) Then, funds sufficient to pay any interest accruing at
the Default Rate and late payment charges, if any, shall be deposited
in the Debt Service Account;
(vii) Finally, provided no Event of Default has occurred and
remains uncured, all amounts remaining in the Deposit Account after
deposits for items (i) through (vi) shall be paid to Borrower.
IV. WITHDRAWALS
Section 4.1 WITHDRAWALS FROM TAX, INSURANCE PREMIUM AND DEBT SERVICE
ACCOUNTS. Pursuant to Section 6.2.2 of the Loan Agreement, Lender shall have the
right to withdraw amounts on deposit in the Tax Account to pay Taxes on or
before the date Taxes are due and payable. Lender shall have the right to
withdraw amounts from the Insurance Account to pay Insurance Premiums on or
before the date Insurance Premiums are due and payable. Lender shall have the
right to withdraw amounts from the Debt Service Account to pay default interest
and late charges, if any, and to pay the Monthly Debt Service Payment Amount on
the date the Monthly Debt Service Payment Amount is due and payable.
Section 4.2 REQUESTS FOR WITHDRAWALS FROM THE ROLLOVER, CAPITAL
EXPENDITURES, AND REQUIRED REPAIR ACCOUNTS. Pursuant to Sections 6.4.2 and 6.5.2
of the Loan Agreement, Agent shall disburse funds on deposit in the Rollover
Account, Capital Expenditure Account, and the Required Repair Account in
accordance with the written request of Borrower. Lender shall so approve
provided all the procedures and requirements set forth in the Loan Agreement for
such withdrawal have been complied with.
Section 4.3 INTENTIONALLY OMITTED.
Section 4.4 SOLE DOMINION AND CONTROL. Borrower and Manager acknowledge
and agree that the Accounts are subject to the sole dominion, control and
discretion of Lender, its authorized agents or designees, including Agent,
subject to the terms hereof. Neither Borrower nor Manager shall have the right
of withdrawal with respect to any Account except with the prior written consent
of Lender. Agent shall have the right and agrees to comply with instructions
originated by Lender with respect to the disposition of funds in the Accounts
without the further consent of Borrower or Manager or any other Person. Agent
shall comply with all "entitlement orders" (as defined in Section 8-102(a)(8) of
the UCC) and instructions originated by Lender directing transfer or redemptions
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of any financial asset relating to any Account without further consent by
Borrower or any other Person.
V. PLEDGE OF ACCOUNTS
Section 5.1 SECURITY FOR OBLIGATIONS. (a) To secure the full and
punctual payment and performance of all obligations of Borrower now or hereafter
existing with respect to the Loan, whether for principal, interest, fees,
expenses or otherwise, and all obligations of Borrower now or hereafter existing
under the Loan Agreement, the Note, the Mortgage, this Agreement and all other
Loan Documents (all such obligations, collectively, the "Obligations"), Borrower
hereby grants to Lender a first priority continuing security interest in and to
the following property of Borrower, whether now owned or existing or hereafter
acquired or arising and regardless of where located (all of the same,
collectively, the "Collateral"):
(i) the Accounts and all cash, checks, drafts, certificates
and instruments, if any, from time to time deposited or held in the
Accounts, including, without limitation, all deposits or wire transfers
made to the Accounts;
(ii) any and all Permitted Investments;
(iii) all interest, dividends, cash, instruments, investment
property and other property from time to time received, receivable or
otherwise payable in respect of, or in exchange for, any or all of the
foregoing; and
(iv) to the extent not covered by clauses (i), (ii) or (iii)
above, all "proceeds" (as defined under the Uniform Commercial Code as
in effect in the State of New York (the "UCC")) of any or all of the
foregoing.
(b) Lender and Agent, as agent for Lender, shall have with respect to
the Collateral, in addition to the rights and remedies herein set forth, all of
the rights and remedies available to a secured party under the UCC, as if such
rights and remedies were fully set forth herein.
(c) All Statements and reports prepared by Agent with respect to the
Accounts shall to be sent to Borrower and Lender no less frequently than
monthly.
Section 5.2 RIGHTS ON DEFAULT. Upon the occurrence of an Event of
Default, and without any duty on the Agent to determine or ascertain if a cure
of such Event of Default shall have occurred and, without notice from Agent or
Lender, (a) Borrower shall have no further right in respect of (including,
without limitation, the right to instruct Lender or Agent to transfer excess
funds from) the Accounts, (b) Lender may direct Agent to liquidate and transfer
any amounts then invested in Permitted Investments to the Accounts or reinvest
such amounts in other Permitted Investments as Lender may reasonably determine
is necessary to perfect or protect any security interest granted or purported to
be granted hereby or to enable Agent, as agent for Lender, or Lender to exercise
and enforce Lender's rights and remedies hereunder with respect to any
Collateral, and (c) Lender may apply any Collateral to any Obligations in such
order of priority as Lender may determine.
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Section 5.3 FINANCING STATEMENT; FURTHER ASSURANCES. Simultaneously
herewith, Borrower shall deliver to Lender for filing a financing statement or
statements in connection with the Collateral in the form required by Lender to
properly perfect Lender's security interest therein. Borrower agrees that at any
time and from time to time, at the expense of Borrower, Borrower will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be reasonably necessary or practical, or that Agent or Lender
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby (including, without limitation, any
security interest in and to any Permitted Investments) or to enable Agent or
Lender to exercise and enforce its rights and remedies hereunder with respect to
any Collateral.
Section 5.4 TERMINATION OF AGREEMENT. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until payment in full of the Obligations. Upon payment and
performance in full of the Obligations, this Agreement shall terminate and
Borrower shall be entitled to the return, upon its request and at its expense,
of such of the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof, and Agent and/or Lender shall execute such
instruments and documents as may be reasonably requested by Borrower to evidence
such termination and the release of the lien hereof.
VI. RIGHTS AND DUTIES OF LENDER AND AGENT
Section 6.1 REASONABLE CARE. Beyond the exercise of reasonable care in
the custody thereof or as otherwise expressly provided herein, neither Agent nor
Lender shall have any duty as to any Collateral in its possession or control as
agent therefor or bailee thereof or any income thereon or the preservation of
rights against any Person or otherwise with respect thereto. Agent and Lender
each shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which Agent or Lender accords its own
property, it being understood that Lender shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in value
thereof, by reason of the act or omission of Agent or Lender, its Affiliates,
agents, employees or bailees, except to the extent that such loss or damage
results from Agent's or Lender's gross negligence, bad faith or willful
misconduct, provided that nothing in this Article VI shall be deemed to relieve
Agent from the duties and standard of care which, as a commercial bank, it
generally owes to depositors. Neither Lender nor Agent shall have any liability
for any loss or the amount of income resulting from the investment of funds in
Permitted Investments in accordance with the terms and conditions of this
Agreement. In no event shall Agent be liable for any lost profits or for any
indirect, special, consequential or punitive damages even if advised of the
possibility or likelihood of such damages. This Section shall survive
termination of the Agreement.
Section 6.2 INDEMNITY. Agent, in its capacity as agent hereunder, shall
be responsible for the performance only of such duties as are specifically set
forth herein, and no duty shall be implied from any provision hereof. Agent
shall not be under any obligation or duty to perform any act which would involve
it in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies. Borrower shall indemnify and hold Agent and
Lender, their respective employees and officers harmless from and against any
loss, cost or actual damage (including, without limitation, reasonable
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attorneys' fees and disbursements) actually incurred by Agent or Lender in
connection with the transactions contemplated hereby, except to the extent that
such loss or damage results from Agent's or Lender's gross negligence, bad
faith, or willful misconduct. This Section shall survive termination of the
Agreement.
Section 6.3 RELIANCE. Agent shall be protected in acting upon any
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other paper, document or signature believed by it, in the exercise of
reasonable judgment and good faith, to be genuine, and it may be assumed that
any person purporting to act on behalf of any Person giving any of the foregoing
in connection with the provisions hereof has been duly authorized to do so.
Agent may consult with counsel, and the opinion of such counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered by it hereunder and in good faith in accordance therewith. Agent shall
not be liable for any act or omission done or omitted to be done by Agent in
reliance upon any instruction, direction or certification received by Agent and
without gross negligence, bad faith or willful or reckless misconduct.
Section 6.4 RESIGNATION OF AGENT. (a) Agent shall have the right to
resign as Agent hereunder upon thirty (30) days' prior written notice to
Borrower and Lender, and in the event of such resignation, Borrower shall
appoint a successor Agent which must be an Eligible Institution. No such
resignation by Agent shall become effective until a successor Agent shall have
accepted such appointment and executed an instrument by which it shall have
assumed all of the rights and obligations of Agent hereunder. If no such
successor Agent is appointed within sixty (60) days after receipt of the
resigning Agent's notice of resignation, the resigning Agent may petition a
court for the appointment of a successor Agent. Notwithstanding the foregoing,
Agent may resign from this Agreement immediately upon written notice to the
other parties in the event of suspected fraud or other illegal activity in
connection with the Accounts or this Agreement.
(b) In connection with any resignation by Agent, (i) the resigning
Agent shall, at the sole cost of Borrower, (A) duly assign, transfer and deliver
to the successor Agent this Agreement and all cash and Permitted Investments
held by it hereunder, (B) execute and/or authorize such financing statements and
other instruments as may be necessary to assign to the successor Agent the
security interest in the Collateral existing in favor of the retiring Agent
hereunder and to otherwise give effect to such succession and (C) take such
other actions as may be reasonably required by Lender or the successor Agent in
connection with the foregoing, (ii) the successor Agent shall establish in its
name, as secured party, cash collateral accounts, which shall become the
Accounts for purposes of this Agreement upon the succession of such Agent and
(iii) Borrower shall cooperate with Lender to issue new joint instructions to
Tenants with respect to the payment of Rents to such successor Agent and to the
Closing Account Bank with respect to the transfer of funds to such successor
Agent.
(c) Lender at its sole discretion shall have the right, upon thirty
(30) days notice to Agent, to substitute Agent with a successor Agent that
satisfies the requirements of an Eligible Institution or to have one or more of
the Accounts held by another Eligible Institution, provided that such successor
Agent shall perform the duties of Agent pursuant to the terms of this Agreement.
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Section 6.5 LENDER APPOINTED ATTORNEY-IN-FACT. Upon the occurrence and
during the continuation of an Event of Default, Borrower hereby irrevocably
constitutes and appoints Lender as Borrower's true and lawful attorney-in-fact,
with full power of substitution, to execute, acknowledge and deliver any
instruments and to exercise and enforce every right, power, remedy, option and
privilege of Borrower with respect to the Collateral, and do in the name, place
and stead of Borrower, all such acts, things and deeds for and on behalf of and
in the name of Borrower, which Borrower could or might do or which Agent or
Lender may deem necessary or desirable to more fully vest in Lender the rights
and remedies provided for herein and to accomplish the purposes of this
Agreement. The foregoing powers of attorney are irrevocable and coupled with an
interest. If Borrower fails to perform any agreement herein contained and such
failure shall continue for five (5) Business Days after notice of such failure
is given to Borrower, Lender may perform or cause performance of any such
agreement, and any reasonable expenses of Lender and Agent in connection
therewith shall be paid by Borrower.
Section 6.6 ACKNOWLEDGMENT OF LIEN/OFFSET RIGHTS. Agent hereby
acknowledges and agrees that (a) the Accounts shall be held by Agent in the name
of Lender, (b) all funds held in the Accounts shall be held for the benefit of
Lender, (c) Borrower has granted to Lender a first priority security interest in
the Collateral, (d) Agent shall not disburse any funds from the Accounts except
as provided herein, and (e) Agent shall invest and reinvest any balance of the
Accounts in Permitted Investments as Borrower shall so direct as provided
herein. Agent hereby waives any right of offset, banker's lien or similar rights
against, or any assignment of, or security interest or other interest in, the
Collateral, except that Agent may charge or set off against the Accounts for
fees and expenses payable hereunder, for returned deposit items and for
adjustments and corrections in respect of transactions in the Accounts,
including, without limitation, returned checks and other deposits with respect
to which Agent fails to receive final payment or settlement, and obligations and
liabilities arising out of any cash management services provided by Agent,
including, but not limited to, Automated Clearing House transactions. If there
are insufficient collected funds in the Accounts to cover the amount of any
returned check or other adjustment or correction to be debited thereto, Borrower
shall repay Agent the amount of such debit immediately upon demand. If Borrower
fails to so repay Agent, then Lender shall repay Agent for such debit
immediately upon demand to the extent that Lender received the proceeds of the
check or other deposit or credit to which the debit relates.
VII. REMEDIES
Section 7.1 REMEDIES. Upon the occurrence and during the continuation
of an Event of Default, Lender or Agent, as agent for Lender, may:
(a) without notice to Borrower, except as required by law, and at any
time or from time to time, charge, set-off and otherwise apply all or any part
of the Collateral against the Obligations or any part thereof;
(b) in its sole discretion, at any time and from time to time, exercise
any and all rights and remedies available to it under this Agreement, and/or as
a secured party under the UCC and/or under any other applicable law; and
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(c) demand, collect, take possession of, receive, settle, compromise,
adjust, sue for, foreclose or realize upon the Collateral (or any portion
thereof) as Lender may determine in its sole discretion.
Section 7.2 WAIVER. Borrower hereby expressly waives, to the fullest
extent permitted by law, presentment, demand, protest or any notice of any kind
in connection with this Agreement or the Collateral. Borrower acknowledges and
agrees that ten (10) days' prior written notice of the time and place of any
public sale of the Collateral or any other intended disposition thereof shall be
reasonable and sufficient notice to Borrower within the meaning of the UCC.
VIII. MISCELLANEOUS
Section 8.1 TRANSFERS AND OTHER LIENS. Borrower agrees that it will not
(i) sell or otherwise dispose of any of the Collateral or (ii) create or permit
to exist any Lien upon or with respect to all or any of the Collateral, except
for the Lien granted under this Agreement.
Section 8.2 LENDER'S RIGHT TO PERFORM BORROWER'S OBLIGATIONS; NO
LIABILITY OF LENDER. If Borrower fails to perform any of the covenants or
obligations contained herein, and such failure shall continue for a period five
(5) Business Days after Borrower's receipt of written notice thereof from
Lender, Lender may itself perform, or cause performance of, such covenants or
obligations, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Borrower to Lender. Notwithstanding Lender's right
to perform certain obligations of Borrower, it is acknowledged and agreed that
Borrower retains control of the Property and operation thereof and
notwithstanding anything contained herein or Agent's or Lender's exercise of any
of its rights or remedies hereunder, under the Loan Documents or otherwise at
law or in equity, neither Agent nor Lender shall be deemed to be a
mortgagee-in-possession nor shall Agent or Lender be subject to any liability
with respect to the Property or otherwise based upon any claim of lender
liability.
Section 8.3 NO WAIVER. The rights and remedies provided in this
Agreement and the other Loan Documents are cumulative and may be exercised
independently or concurrently, and are not exclusive of any other right or
remedy provided at law or in equity. No failure to exercise or delay by Agent or
Lender in exercising any right or remedy hereunder or under the Loan Documents
shall impair or prohibit the exercise of any such rights or remedies in the
future or be deemed to constitute a waiver or limitation of any such right or
remedy or acquiescence therein. Every right and remedy granted to Agent and/or
Lender hereunder or by law may be exercised by Agent and/or Lender at any time
and from time to time, and as often as Agent and/or Lender may deem it
expedient. Any and all of Agent's and/or Lender's rights with respect to the
lien and security interest granted hereunder shall continue unimpaired, and
Borrower shall be and remain obligated in accordance with the terms hereof,
notwithstanding (a) any proceeding of Borrower under the Federal Bankruptcy Code
or any bankruptcy, insolvency or reorganization laws or statutes of any state,
(b) the release or substitution of Collateral at any time, or of any rights or
interests therein or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Agent and/or Lender in the event of any default,
with respect to the Collateral or otherwise hereunder. No delay or extension of
time by Agent and/or Lender in exercising any power of sale, option or other
right or remedy hereunder, and no notice or demand which may be given to or made
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upon Borrower by Agent and/or Lender, shall constitute a waiver thereof, or
limit, impair or prejudice Agent's and/or Lender's right, without notice or
demand, to take any action against Borrower or to exercise any other power of
sale, option or any other right or remedy.
Section 8.4 EXPENSES. Borrower shall pay to Agent and Lender and/or
Agent's and Lender's counsel on demand, from time to time, all standard and
customary costs and expenses (including, but not limited to, reasonable
attorneys' fees and disbursements, and transfer, recording and filing fees,
taxes and other charges) of, or incidental to, the creation or perfection of any
lien or security interest granted or intended to be granted hereby, the custody,
care, sale, transfer, administration, collection of or realization on the
Collateral, or in any way relating to the enforcement, protection or
preservation of the rights or remedies of Agent and/or Lender under this
Agreement, the Loan Agreement, the Note, the Mortgage, or the other Loan
Documents. Standard and customary fees and charges associated with the Accounts
shall be included on a monthly consolidated account analysis statement which
Agent shall submit to Borrower for Borrower's payment. This statement shall set
forth the fees and charges payable for such month, including, but not limited to
reasonable fees and reasonable expenses incurred in connection with this
Agreement and be accompanied by reasonably detailed supporting documentation.
Agent shall be entitled to charge the Accounts for such fees and expenses as
indicated by the analysis statement.
Section 8.5 ENTIRE AGREEMENT. This Agreement constitutes the entire and
final agreement between the parties with respect to the subject matter hereof
and may not be changed, terminated or otherwise varied, except by a writing duly
executed by the parties.
Section 8.6 NO WAIVER. No waiver of any term or condition of this
Agreement, whether by delay, omission or otherwise, shall be effective unless in
writing and signed by the party sought to be charged, and then such waiver shall
be effective only in the specific instance and for the purpose for which given.
Section 8.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, their respective successors
and permitted assigns.
Section 8.8 NOTICES. All notices, demands, requests, consents,
approvals and other communications (any of the foregoing, a "Notice") required,
permitted, or desired to be given hereunder shall be in writing sent by telefax
or by registered or certified mail, postage prepaid, return receipt requested or
delivered by hand or reputable overnight courier addressed to the party to be so
notified at its address hereinafter set forth, or to such other address as such
party may hereafter specify in accordance with the provisions of this Section
8.8. Any such Notice shall be deemed to have been received three (3) days after
the date such Notice is mailed or on the date of sending by telefax (if the
sender thereof shall have confirmation thereof and a hard copy is also sent by
mail to the recipient) or delivery by hand or the next day if sent by an
overnight commercial courier addressed to the parties as follows:
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If to Lender: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Facsimile No.: (212) 479-5800
With a copy to: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Facsimile No.: (212) 479-5800
With a copy to: Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
If to Borrower: Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Suite 304
Port Washington, NY 11050
Attn: Brenda Walker
Stuart Widowski
Fax No.: (516) 767-6497
With a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Attn: Steven P Moskowitz
Fax No.: (212) 806-6006
If to Manager: Calarese Properties, Inc.
1000 Franklin Village Drive
Franklin, Massachusetts 02038
Attn: Richard Calarese
Fax No.: (508)528-0053
With a copy to: Michael Myerow, Esq.
365 Boston Post Road #114
Boston, Massachusetts 01776
Attn: Michael Myerow, Esq.
Fax No.: (978) 443-0566
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If to Agent: PNC Bank, National Association
Treasury Management
Two PNC Plaza, 31st Floor
620 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attn: Ron Rockovich
Fax No.: (412) 762-6264
With a copy to: PNC Bank, National Association
Treasury Management
Two PNC Plaza, 31st Floor
620 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attn: Risk Manager
Fax No.: (412) 762-6264
Section 8.9 CAPTIONS. All captions in this Agreement are included
herein for convenience of reference only and shall not constitute part of this
Agreement for any other purpose.
Section 8.10 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in all respects in accordance with the laws of the State
of New York without regard to conflicts of law principles of such State.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be Agent's jurisdiction (within the meaning of Sections
8-110 and 9-304 of the UCC).
Section 8.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts.
Section 8.12 RIGHT TO PLACE HOLD; INTERPLEADER. If at any time: (a)
Agent, in good faith, is in doubt as to the action it should take under this
Agreement, or (b) the Borrower becomes subject to a voluntary or involuntary
bankruptcy, reorganization, receivership or similar proceeding, or (c) Agent is
served with legal process which it in good faith believes prohibits the
disbursement of the funds deposited in the Accounts, then Agent shall have the
right (i) to place a hold on the funds in all such Accounts until such time as
it receives an appropriate court order or other assurance satisfactory to it as
to the disposition of the funds in the Accounts, or (ii) to commence, at
Borrower's expense, an interpleader action in any competent Federal or State
Court located in the Commonwealth of Pennsylvania, and otherwise to take no
further action except in accordance with joint written instructions from
Borrower and Lender or in accordance with the final order of a competent court,
served on Agent.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Brenda J. Walker
Title: Vice President
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the New York branch of a
German banking corporation
By: ____________________________________________________
Name:
Title:
By: ____________________________________________________
Name:
Title:
AGENT:
PNC Bank, National Association, a national banking
association
By: __________________________________________________
Name:
Title:
MANAGER:
CALARESE PROPERTIES, INC., a
Massachusetts corporation
By: __________________________
Name:
Title:
EXHIBIT A
Form of Tenant Direction Letter
[BORROWER LETTERHEAD]
____________ ___, 200__
[TENANTS UNDER LEASES]
Re:______Lease dated ________ between _______________,
as Landlord, and _______________, as Tenant,
concerning premises known as
______________________________________________________________
Gentlemen:
This letter shall constitute notice to you that the
undersigned has granted a security interest in the captioned lease and all
rents, additional rent and all other monetary obligations to landlord thereunder
(collectively, "RENT") in favor of Bank as lender ("LENDER"), to secure certain
of the undersigned's obligations to Lender. The undersigned hereby irrevocably
instructs and authorizes you to disregard any and all previous notices sent to
you in connection with Rent and hereafter to deliver all Rent to the following
address:
NORTHFORK BANK
P.O. Box 9019
Hicksville, New York 11802
Account No. ______________
Attention: _________________
ABA# ____________________
The instructions set forth herein are irrevocable and are not
subject to modification in any manner, except that Lender, or any successor
lender so identified by Lender, may by written notice to you rescind the
instructions contained herein.
Sincerely,
[BORROWER]
ACKNOWLEDGMENT AND AGREEMENT
The undersigned acknowledges notice of the security interest of Lender and
hereby confirms that the undersigned has received no notice of any other pledge
or assignment of the Rent and will honor the above instructions.
[TENANT]
By: _______________________________________
Name:
Its:
Dated as of: __________ ___, 200__
Exhibit 10.21
CLEARING ACCOUNT AGREEMENT
This CLEARING ACCOUNT AGREEMENT (the "Agreement") is entered into this
1st day of November, 2004, by and among NORTH FORK BANK, having an address at
275 Broadhollow Road, Melville, New York 11747 (the "Clearing Bank"),
CEDAR-FRANKLIN VILLAGE LLC, a Delaware limited liability company, having an
address at c/o Cedar Shopping Centers Partnership, L.P., 44 South Bayles Avenue,
Suite 304, Port Washington, NY 11050 (the "Borrower"), and EUROHYPO AG, NEW YORK
BRANCH, the New York branch of a German banking corporation, having an address
at 1114 Avenue of the Americas, Twenty-Ninth Floor, New York, New York 10036
(together with its successors and assigns, the "Lender").
RECITALS
A. Lender has made a mortgage loan in the amount of $43,500,000.00 (the
"Loan") to Borrower pursuant to that certain Loan Agreement of even date
herewith between Borrower and Lender (the "Loan Agreement"). Capitalized terms
used in this Agreement, unless defined in this Agreement, shall have the meaning
ascribed to such term in the Loan Agreement.
B. Borrower and Lender have agreed that all Rents be deposited with a
financial institution acceptable to Lender directly into an account designated
by and established for the benefit of Lender, and Borrower and Lender desire to
retain Clearing Bank to provide the services described herein.
NOW, THEREFORE, in consideration of the mutual premises contained
herein and for other good and valuable consideration the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Defined Terms. In addition to capitalized terms defined elsewhere in
this Agreement, the following capitalized terms shall have the respective
meanings set forth below:
"Available Funds" shall mean funds on deposit in the Clearing Account
reasonably determined by the Clearing Bank to constitute collected and available
funds, by reference to Clearing Bank's then current availability schedule and
Regulation CC of the Board of Governors of the Federal Reserve System, as
amended and interpreted from time to time.
"Business Day" shall mean any day other than a Saturday, Sunday or any
day on which commercial banks in New York, New York are authorized or required
to close.
"Cash Management Agreement" shall mean that certain Cash Management
Agreement of even date herewith by and among Borrower, Manager, Lender and Cash
Management Bank.
"Cash Management Bank" shall mean PNC Bank, National Association.
"Clearing Account Address" shall mean the following address to which
Tenants shall pay directly all sums due under such Tenant's lease pursuant to
this Agreement and the Cash Management Agreement:
P.O. Box 9019
Hicksville, New York
11802-9019
"Clearing Account" shall have the meaning specified in Paragraph 2(c)
below.
"Designee" shall mean the Servicer or other agent of Lender designated
by, and acting for the benefit of, Lender. Lender shall provide written notice
of such designation to Borrower and Clearing Bank.
"Eligible Account" shall mean a separate and identifiable account from
all other funds held by the holding institution that is either (i) an account or
accounts maintained with a federal or state-chartered depository institution or
trust company which complies with the definition of Eligible Institution or (ii)
a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company, is subject to regulations substantially similar to 12 C.F.R. ss.
9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority. An Eligible Account will not be evidenced by a certificate of
deposit, passbook or other instrument.
"Eligible Institution" shall mean a depository institution or trust
company insured by the Federal Deposit Insurance Corporation the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by Standard & Poor's Ratings Group, P-1 by Moody's Investors Service, Inc. and
F-1+ by Fitch, Inc. in the case of accounts in which funds are held for thirty
(30) days or less (or, in the case of accounts in which funds are held for more
than thirty (30) days, the long term unsecured debt obligations of which are
rated at least "AA" by Fitch and S&P and "Aa2" by Moody's). Notwithstanding the
foregoing, North Fork Bank shall be deemed an Eligible Institution for the
purposes of this Agreement so long as it maintains its ratings in effect as of
the date hereof and so long as it is not placed "On Watch for Downgrade" by any
Rating Agency.
"Obligations" shall mean any and all debts, liabilities and obligations
of Borrower to Lender pursuant to or in connection with the Loan, including
without limitation, the indebtedness evidenced by the Note and any and all debt,
liabilities and obligations of Borrower under the Loan Documents.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, estate, trust, unincorporated association, any
other entity, any federal, state, county or municipal government or any bureau,
department or agency thereof and any fiduciary acting in such capacity on behalf
of any of the foregoing.
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2. Duties of the Clearing Bank.
(a) Clearing Bank shall receive and process any deposits presented or
wire transfer made by Borrower, Manager or any of their respective agents for
deposit into the Clearing Account pursuant to the Cash Management Agreement
(such receipts being collectively referred to herein as "Over-the-Counter
Receipts").
(b) Clearing Bank shall receive and process all wire transfers and all
mail sent to the Clearing Account Address and open such mail daily in order to
examine, remove instruments of payment of money contained therein and deposit
such wire transfers and instruments in the Clearing Account. Checks, money
orders or other instruments for the payment of money which may be handled as
cash items by Federal Reserve Banks (such receipts being collectively referred
to herein as the "Receivables Receipts," and, together with the Over-the-Counter
Receipts, the "Receipts"), if found by Clearing Bank in its discretion to be in
proper order, shall be endorsed by Clearing Bank and deposited daily in the
Clearing Account. Borrower hereby designates Clearing Bank as its attorney in
fact to endorse Borrower's name on such Receivables Receipts for deposit into
the Clearing Account and Borrower shall be liable to Clearing Bank as a general
endorser thereon. Mail received by Clearing Bank that contains cash will be
processed by creating a deposit ticket listing the cash received, which cash
will be deposited into the Clearing Account. Any other items received by
Clearing Bank, including items not denominated in U.S. dollars, instruments
which are not made payable to the name of the Property, Borrower or Manager or a
reasonable abbreviation thereof, or which are otherwise not in proper order or
should receive Manager's special attention, shall be forwarded by Clearing Bank
to Manager immediately without processing.
(c) In order to further secure the performance by Borrower of the
Obligations and as a material inducement for Lender to make the Loan, (i)
Borrower has established and will maintain a collection account with Clearing
Bank (the "Clearing Account," Account Number 3124062559), into which Clearing
Bank shall deposit all Receipts received by it with respect to the Property,
(ii) the Clearing Account shall be entitled "Cedar-Franklin Village LLC Clearing
Account, as Mortgagor, for the benefit of Mortgagee," and (iii) Clearing Bank
shall hold amounts deposited in the Clearing Account for the benefit of Lender
and shall designate such amounts on its books as being held for the benefit of
Lender. The Clearing Account shall be assigned the federal tax identification
number of Borrower.
(d) Clearing Bank shall send a daily credit advice to Borrower or, at
Borrower's direction, Manager, which credit advice shall specify the amount of
each Receipt deposited into the Clearing Account on such date. The Clearing Bank
shall send a monthly statement to Borrower, Manager and Lender, which monthly
statement shall specify the credits and charges to the Clearing Account for the
previous calendar month. Clearing Bank shall establish Lender and Designee as
users of Clearing Bank's e-Cash Management Connection web product in accordance
with Clearing Bank's standard procedures. Upon written request of Lender or
Designee, (i) Clearing Bank shall send to Lender or Designee, as applicable,
either (x) copies of the daily credit advices and any other advices or
statements furnished by Clearing Bank to Borrower and Manager hereunder or (y)
information on Clearing Account balances, the aggregate amount of withdrawals or
transfers from the Clearing Account and other similar information via the
electronic data transfer system on a daily basis, and (ii) Clearing Bank shall
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advise Lender or Designee, as applicable, of the amount of Available Funds and
shall deliver to Lender or Designee, as applicable, copies of all statements and
other information concerning the Clearing Account as Lender or Designee shall
reasonably request.
(e) Clearing Bank shall create a record of Receipts (other than those
Receipts comprised of cash) by photocopying or imaging each check, money order
or other instrument processed and any accompanying invoices or other
documentation (if enclosed). Furthermore, Clearing Bank shall maintain a
microfilm or other record of each Receipt which is processed by Clearing Bank in
accordance with Clearing Bank's customary procedures. Clearing Bank shall also
forward to Borrower or, at Borrower's direction, Manager on a daily basis copies
of the supporting adding machine tapes or similar balancing reports,
photocopies, envelopes and unprocessed remittances.
(f) Items deposited with Clearing Bank which are returned for
insufficient or uncollected funds shall be re-deposited by Clearing Bank a
second time. Items returned unpaid the second time for whatever reason shall be
processed in accordance with Clearing Bank's customary procedures and the
provisions this Agreement.
(g) Without limitation on Lender's other rights hereunder, Clearing
Bank agrees to comply with written instructions originated by Lender directing
disposition of funds in the Clearing Account, without further consent by
Borrower, Manager or any other Person.
3. Transfer of Funds in Clearing Account.
(a) Unless and until the Closing Bank receives written instructions
from Lender to the contrary, Clearing Bank shall transfer all Available Funds on
deposit in the Clearing Account as follows:
(i) On each Business Day, Clearing Bank shall transfer, by
wire transfer or via the ACH System, all Available Funds to the account
established pursuant to the terms of the Cash Management Agreement at
the Cash Management Bank (the "Lockbox Account") as described in
Exhibit A attached hereto.
(ii) Simultaneously with any transfer to the Cash Management
Bank, Clearing Bank shall send (or make available via electronic
information reporting system) to the Cash Management Bank, Manager,
Lender, Designee and Borrower, via telecopy, a wire transfer or ACH
System advice setting forth the amount transferred.
4. Fees.
(a) Clearing Bank shall first charge other accounts maintained at
Clearing Bank by Borrower for the amount of any exchange, collection,
processing, transfer, wire, postage, returned items, chargebacks for uncollected
checks deposited in the Clearing Account, services charges, returned checks
fees, other charges to which Clearing Bank may be entitled for servicing and
maintaining the Cash Management Address and Clearing Account or other
out-of-pocket expenses incurred by Clearing Bank, as determined by Clearing Bank
from time to time (collectively, "Charges"). In the event that there are not
sufficient collected funds in such other accounts to pay the Charges then
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Clearing Bank may charge the Clearing Account for such Charges. In the event
that there are insufficient collected funds on deposit in the Clearing Account,
Borrower agrees upon demand to pay to Clearing Bank the amount of such Charges.
(b) Clearing Bank shall debit the Clearing Account by the amount of its
Charges on a monthly basis or shall include its fees in an account analysis
statement.
5. Termination.
(a) Clearing Bank may resign from its obligations under this Agreement
at any time after thirty (30) days' prior written notice to the other parties
hereto. Upon such resignation, Borrower shall designate a successor to Clearing
Bank promptly after receipt of notice of resignation by Clearing Bank, which
successor shall be subject to the approval of Lender, and cause such designated
successor promptly to assume the obligations of Clearing Bank hereunder. It
shall be an Event of Default if a successor to Clearing Bank acceptable to
Lender has not been designated or has not assumed the obligations of Clearing
Bank prior to the effective date of Clearing Bank's resignation.
(b) Borrower may not unilaterally terminate this Agreement or close any
of the accounts established hereunder. Clearing Bank shall not cause or permit
any of such accounts to be closed by Borrower unless it has received prior
written notice from Lender.
6. Warranties and Liabilities of the Clearing Bank.
(a) The parties hereto agree that Clearing Bank's sole responsibility
to Lender, Borrower or any third party for errors made by Clearing Bank in
processing any Receipt shall be to process a correcting entry in the next
regularly scheduled processing of the work after receipt of notification from
Lender, Borrower, Manager or any third party of such error. Clearing Bank shall
not be liable to Lender, Borrower, Manager or any third party if Lender,
Borrower, Manager or any third party fails to give timely advice to Clearing
Bank of any error alleged to have been made by Clearing Bank in the processing
of a Receipt. The foregoing shall not relieve Clearing Bank of any liability
arising out of any failure to perform its duties in accordance herewith.
(b) Clearing Bank shall make every reasonable effort to deliver the
amounts and items referred to in Paragraph 3 above by the mutually agreed upon
time but does not guarantee a specific delivery time. Accordingly, Clearing
Bank's sole responsibility to Lender or any third party with respect to the time
of delivery of such amounts and items shall be to deliver such amounts and items
as close to the mutually agreed upon time as may be reasonably practicable.
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7. Liens, Set-off. Clearing Bank and Borrower each acknowledges and
agrees that the Clearing Account is subject to the sole dominion, control and
discretion of Lender and Designee and neither Borrower nor Manager shall have
any right to close such account or right of withdrawal or transfer with respect
to such account except with the prior written consent of Lender. Borrower shall
be entitled to request and receive any information about the Clearing Account
that it shall reasonably request from time to time. Clearing Bank waives any
lien, security interest or right to offset any claim against Borrower which it
might have against any account maintained hereunder unless and until Borrower's
obligations to Lender are satisfied in full with written confirmation of same by
Lender; provided, however, that Clearing Bank retains the right to (a) charge
the Clearing Account for any of Clearing Bank's Charges, fees and expenses
provided for herein for which Borrower is responsible as provided in Paragraph 4
hereof and (b) charge the Clearing Account for all items deposited in and
credited to the Clearing Account and subsequently returned unpaid or with
respect to which Clearing Bank fails to receive final settlement. Nothing
contained in this Agreement shall be deemed to prohibit Clearing Bank from
complying with applicable law in the event it is served with any legal process
with respect to the Clearing Account.
8. Matters Concerning Borrower and Manager.
(a) Borrower hereby pledges, transfers and assigns, and grants to
Lender, as additional security for the payment and performance of the Note and
the Obligations of Borrower, a first priority security interest in and to, and a
general first lien upon, subject to Clearing Bank's right to set-off with
respect to the Clearing Bank's fees and expenses as described in Paragraph 7
above, (i) the Clearing Account and all of Borrower's right, title and interest
in and to all cash, property, instruments or rights transferred to or deposited
in the Clearing Account from time to time by Borrower or on behalf of Borrower
in accordance with the provisions of this Agreement and (ii) any and all
proceeds of the foregoing. This Agreement and the pledge, assignment and grant
of security interest made hereby shall secure payment of all amounts payable by
Borrower to Lender under the Note and the other Obligations of Borrower.
Borrower acknowledges and agrees that Clearing Bank is acting at the direction
of, and as the agent of, Lender in connection with the subject matter of this
Agreement. Borrower further agrees to execute, acknowledge, deliver, file or do
at its sole cost and expense, all other acts, assignments, notices, agreements
or other instruments as Lender may reasonably require in order to effectuate,
assure, convey, secure, assign, transfer and convey unto Lender any of the
rights granted by this section.
(b) Borrower shall provide Manager with a copy of this Agreement, as
the same may be amended from time to time, and shall cause Manager to abide by
all of the terms and provisions hereof applicable to Borrower and/or Manager.
9. Successors and Assigns; Assignments. This Agreement shall bind and
inure to the benefit of and be enforceable by Clearing Bank, Borrower and Lender
and their respective successors and permitted assigns. Lender shall have the
right to assign or transfer its rights under this Agreement in connection with
any assignment of the Loan and the Loan Documents. Any assignee or transferee of
Lender shall be entitled to all the benefits afforded to Lender under this
Agreement provided that such assignee or transferee thereof agrees in writing to
be bound by the terms of this Agreement. Borrower shall not have the right to
assign or transfer its rights or obligations under this Agreement without the
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prior written consent of Lender, and any attempted assignment without such
consent shall be null and void. Clearing Bank shall have the right to assign or
transfer its rights and obligations hereunder in connection with a merger,
consolidation or sale of all or substantially all of the assets of Clearing Bank
provided that the transferee thereof agrees in writing to be bound by the terms
of this Agreement.
10. Amendment. This Agreement may be amended from time to time only by
a written agreement executed by all of the parties hereto.
11. Notices. All notices, demands, requests, consents, approvals or
other communications (any of the foregoing, a "Notice") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such
other address as such party may hereafter specify in accordance with the
provisions of this Paragraph 11. Any Notice shall be deemed to have been
received three (3) days after the date such Notice is mailed or on the date of
sending by telefax (if sender shall have confirmation thereof and a hard copy is
also sent by mail) or delivery by hand if sent or delivered during business
hours on a Business Day (otherwise on the next Business Day) or the next
Business Day if sent by an overnight commercial courier addressed to the parties
as follows:
If to Lender: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Head of Portfolio Operations
Fax No.: (212) 479-5800
With a copy to: Eurohypo AG, New York Branch
1114 Avenue of the Americas
Twenty-Ninth Floor
New York, New York 10036
Attention: Legal Director
Fax No.: (212) 479-5800
With a copy to: Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, New York 100038
Attention: Michael G. Kavourias, Esq.
Facsimile No.: (212) 504-6666
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If to Borrower: Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Suite 304
Port Washington, NY 11050
Attention:
Facsimile No.
With a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Attn: Steven P. Moskowitz
Fax No.: (212) 806 6006
If to Clearing Bank: North Fork Bank
275 Broadhollow Road Melville, New York
Attention: Mario Caracappa
Facsimile No. (631) 844-9730
With a copy to: North Fork Bank
175 West 72nd Street
New York, New York
Attn: Paul Patella
Facsimile No. (212) 712-9565
12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CONFLICTS OF LAWS PRINCIPLES. ANY ACTION ARISING OUT OF OR CONCERNING THIS
AGREEMENT SHALL BE HEARD BY A JUDGE SITTING WITHOUT A JURY AND SHALL BE HEARD
EXCLUSIVELY IN STATE COURT OF THE STATE OF NEW YORK. THE PARTIES HERETO SUBMIT
TO THE EXCLUSIVE JURISDICTION OF THE STATE COURT OF THE STATE OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING UNDER OR CONCERNING THIS AGREEMENT.
REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR PURPOSES OF THE UCC (AS
DEFINED IN THE LOAN AGREEMENT), CLEARING BANK AGREES THAT NEW YORK SHALL BE
DEEMED TO BE CLEARING BANK'S JURISDICTION (WITHIN THE MEANING OF SECTION 9-304
OF THE UCC).
13. Certain Matters Affecting Clearing Bank.
(a) Clearing Bank may rely and shall be protected in acting or
refraining from acting upon any written notice (including but not limited to
electronically confirmed facsimiles of such notice) reasonably believed by it
acting in good faith and in the exercise of reasonable judgment to be genuine
and to have been signed or presented by the proper party or parties in the
normal course of business.
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(b) The duties and obligations of Clearing Bank hereunder shall be
determined solely by the express provisions of this Agreement. Clearing Bank
shall not be liable except for the performance of its duties and obligations as
are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against Clearing Bank.
(c) Borrower and Lender agree that Clearing Bank shall not be liable
for any damage or loss to them for any delay or failure of performance arising
out of the acts or omissions of any third parties, including, but not limited
to, various communication services, courier services, the Federal Reserve
System, any other bank or any third party who may be affected by funds
transactions, fire, mechanical, computer or electrical failures or other
unforeseen contingencies, strikes or any similar or dissimilar cause beyond the
reasonable control of Clearing Bank. In no event shall Clearing Bank be liable
for lost profits or consequential, special, indirect, direct, or punitive
damages even if Clearing Bank has been advised of the possibility of the
foregoing.
(d) Borrower and its respective successors, assigns and legal
representatives shall forever indemnify Clearing Bank and hold it entirely
harmless from and against any and all claims, demands, losses, charges,
expenses, legal fees, costs and liabilities of whatever kind or description, and
lawsuits or legal proceedings, including, without limitation, fees and
disbursements of legal counsel incurred by Clearing Bank in any action or
proceeding between Borrower or Lender and Clearing Bank or between Clearing Bank
and any third party or otherwise, without regard to the merit or lack of merit
thereof, arising out of or related in any way to the matters set forth in, or
the services to be provided pursuant to the terms of this Agreement.
(e) Notwithstanding anything to the contrary contained herein, Clearing
Bank shall not be liable for any action taken or omitted by it in good faith
except for Clearing Bank's willful misconduct or gross negligence. Clearing Bank
may execute any of its powers and perform any of its duties hereunder directly
or through agents or attorneys and may consult with counsel, accountants and
other skilled persons to be selected and retained by it at the cost of Borrower.
Clearing Bank shall not be liable for any act or omission done or omitted to be
done by Clearing Bank in reliance upon any instruction, direction or
certification from Lender or its Servicer received by Clearing Bank and without
gross negligence, bad faith or willful or reckless misconduct of Clearing Bank.
In the event that Clearing Bank shall be uncertain as to its duties or rights
hereunder or shall receive instructions, claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this Agreement, it
shall be entitled to refrain from taking any action and its sole obligation
shall be to either (i) keep safely all property held in escrow or (ii) deposit
same with Lender.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Clearing Account Agreement in several counterparts (each of which shall be
deemed an original) as from the date first above written.
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By:
------------------------------------------
Name: Brenda J. Walker
Title: Vice President
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the New York branch
of a German banking corporation
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
CLEARING BANK:
NORTH FORK BANK
By:
-----------------------------------------------
Name:
Title:
EXHIBIT A
Cash Management Bank And Lockbox Account
Cash Management Bank: PNC Bank National Association
Lockbox Account: ABA #: 021407912
Attn.: (____) ________________________
Fax: (____) ________________________
Account of: Cedar-Franklin Village LLC, as mortgagor,
for the benefit of Eurohypo AG, New York
Branch, as mortgagee
Account #: [_____]
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form
S-3 for the registration of an aggregate maximum offering price of $200,000,000
of common stock, preferred stock, shares of preferred stock represented by
depositary shares, warrants, stock purchase contracts and units, No. 333-114710
and Form S-8 pertaining to the 1998 Stock Option Plan and the 2004 Stock
Incentive Plan) of Cedar Shopping Centers, Inc. and in the related Prospectus of
our report dated October 21, 2004 with respect to the Statement of Revenues and
Certain Expenses of Franklin Village Plaza included in this Current Report Form
8-K.
/s/ Ernst & Young LLP
November 4, 2004
EXHIBIT 99.1
CEDAR SHOPPING CENTERS, INC.
44 SOUTH BAYLES AVENUE
PORT WASHINGTON, NEW YORK 11050
CONTACT: LEO S. ULLMAN
PRESIDENT
(516) 767-6492
FOR IMMEDIATE RELEASE:
CEDAR SHOPPING CENTERS, INC. - ANNOUNCES EXTENSION AND
MODIFIED TERMS FOR ITS SECURED CREDIT FACILITY
Port Washington, New York - November 3, 2004 - Cedar Shopping Centers, Inc.,
(NYSE: "CDR") (the "Company"), today announced that it had reached agreement
with Bank of America, lead arranger for an existing credit facility to the in
the amount of $100 million, to amend the terms of that facility to include the
following:
o The interest rate margin will be reduced by 75 basis points, from a range
of 225 to 275 basis points, to a range of 150 to 205 basis points above
LIBOR, depending on the Company's leverage ratio.
o The credit facility has also been amended to introduce an accordion
feature pursuant to which the credit facility may be increased to $200
million.
o Certain covenants of the credit facility have been amended to accommodate
the Company's development properties and to provide additional
flexibility.
o The maturity date of the credit facility is January 2007, subject to a
one-year extension option.
The Company has borrowed approximately $60.6 million from the credit facility as
of the date hereof.
In addition to Bank of America as lead arranger, other members of the banking
group for the syndicated facility include Fleet National Bank, Commerzbank AG
New York, PB Capital Corporation, Manufacturers and Traders Trust Company,
Sovereign Bank, Raymond James Bank, FSB and Citizens Bank.
Tom O'Keeffe, the Company's Chief Financial Officer, in a statement released
today stated "Our recent preferred stock offering, which provided nearly $60
million of new equity, permitted us to approach our lenders for more favorable
terms."
Leo Ullman, CEO of the Company, stated "Based on our recent additional equity
raise, and the restructured credit facility, we now have substantial capital
available to complete our redevelopment plan and to continue to seek attractive
and accretive acquisitions."
Cedar Shopping Centers, Inc. is a self-managed real estate investment trust
which owns and operates 29 primarily supermarket-anchored shopping centers with
approximately 4.5 million square feet of gross leasable area located in
Pennsylvania, New Jersey, Maryland, Massachusetts and Connecticut.
Forward-Looking Statements
Certain statements contained in this Press Release constitute forward-looking
statements within the meaning of the securities laws. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general and specific economic and business
conditions, which will, among other things, affect demand for rental space, the
availability and creditworthiness of prospective tenants, lease rents and the
availability of financing; adverse changes in the Company's real estate markets,
including, among other things, competition with other companies; risks of real
estate development and acquisition; risks of adverse operating results and
creditworthiness of current tenants; governmental actions and initiatives; and
environmental/safety requirements. Such forward-looking statements speak only as
of the date hereof. The Company does not intend, and disclaims any duty or
obligation, to update or revise any forward-looking statements set forth in this
release to reflect any change in expectations, change in information, new
information, future events or circumstances on which such information was based.