MORTGAGE NOTE
$42,087,513 New York, New York
November 4, 1996
FOR VALUE RECEIVED, CALI HARBORSIDE PLAZA I (FEE) ASSOCIATES L.P., a
New Jersey limited partnership, having an address of ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Maker"), promises to pay to U S
WEST PENSION TRUST, INVESTMENT MANAGEMENT COMPANY, together with any future
holder of this Note and their successors and assigns (hereinafter called
"Payee"), or order, at BOSTON SAFE DEPOSIT AND TRUST COMPANY, as Trustee of the
U S WEST PENSION TRUST, INVESTMENT MANAGEMENT COMPANY, Attn: ▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other place as may be designated, from time to time, in writing by ▇▇▇▇▇, the
principal sum of Forty-Two Million Eighty-Seven Thousand Five Hundred Thirteen
Dollars ($42,087,513) in lawful money of the United States of America, together
with interest on the principal balance outstanding from time to time, as
hereinafter provided.
1. Defined Terms. The following terms as used in this Note shall have
the following meanings:
(a) The term "Guaranty" shall mean those certain Guaranty
Agreements of even date herewith from Cali Realty Corporation, a Maryland
corporation, and Cali Realty, L.P., a Delaware limited partnership
(collectively, the "Guarantors"), for the benefit of Payee guaranteeing the full
and prompt payment of this Note and performance of all of Maker's obligations
with respect to this Note. Maker and Guarantors are jointly and severally liable
hereunder.
(b) The term "Loan Documents" shall mean the Mortgage and the
Other Security Documents.
(c) The term "Mortgage" shall mean that certain Mortgage,
Assignment of Rents, Security Agreement and Financing Statement of even date
herewith given by Maker to Payee as security for this Note encumbering certain
property located in ▇▇▇▇▇▇ County, New Jersey, as more particularly described
therein (the "Mortgaged Property"), as the same may hereafter be spread,
released, extended, modified or amended from time to time.
(d) The term "Other Security Documents" shall mean all and any
of the documents other than this Note or the Mortgage, now or hereafter executed
by Maker or others, and by or in favor of Payee, which wholly or partially
secure or guarantee payment of this Note.
(e) The term "Principal Balance" shall mean the outstanding
principal balance of this Note from time to time outstanding.
2. Initial Interest Rate. The initial interest rate on this Note shall
be six and 99/100 percent (6.99%) per annum ("Initial Interest Rate"). The
Initial Interest Rate was calculated by adding 90 basis points to the Current
Index, as hereinafter defined.
3. Calculation of Interest. Interest on this Note shall be computed on
the basis of a 360-day year composed of twelve (12) 30-day months from the date
of the advance until the Maturity Date (as hereinafter defined) and the actual
number of days elapsed in the period for which interest is payable.
4. Interest Rate Adjustments and Payment Adjustments. The interest rate
and payments under this Note shall be adjusted as follows:
(a) Change Dates. The interest rate charged under this Note
shall be reset on November 4, 1999 ("First Change Date") (effective for monthly
payments beginning on November 4, 1999 through November 3, 2002), and on
November 4, 2002 ("Second Change Date") (effective for monthly payments
beginning on November 4, 2002 through the Maturity Date of this Note). The First
Change Date and the Second Change Date are hereinafter referred to collectively
as the "Change Dates."
(b) The Index. On each Change Date, the interest rate will be
based on an Index. The "Index" is the weekly average yield on United States
Treasury Securities adjusted to a constant maturity of three (3) years as made
available by the Federal Reserve Board. (The Index is currently made available
in Statistical Release H-15). The most recent Index figure available as of the
Change Date is called the "Current Index." If the Index is no longer available,
the Payee will choose a new Index which is based on comparable information.
The Payee will give Maker written notice of such choice.
(c) Calculation of Interest Rate. On the First Change Date,
▇▇▇▇▇ will calculate the new interest rate by adding one hundred ten (110) basis
points to the Current Index. On the Second Change Date, ▇▇▇▇▇ will calculate the
new interest rate by adding one hundred thirty (130) basis points to the Current
Index. The Initial Interest Rate and the interest rate as calculated on each
Change Date shall be the "Current Interest Rate."
(d) Effective Date of Change. The Current Interest Rate will
become effective on each Change Date. Maker will pay the amount of the new
monthly payment beginning on the first payment date after each Change Date.
(e) Notice of Changes. Payee will deliver or mail to Maker a
notice of any change in the interest rate and the amount of the new monthly
payment within ten (10) calendar days after each Change Date.
5. Monthly Payments. Interest only on the outstanding Principal Balance
shall be payable monthly in arrears beginning on the first day of the first
calendar month after the first advance of principal under this Note and
continuing on the first day of each subsequent month until January 1, 2006
(hereinafter referred to as the "Maturity Date"), on which date the entire
unpaid Principal Balance and interest shall be due and payable in full.
Notwithstanding the foregoing to the contrary, so long as Maker is not in
default under this Note or under the Loan Documents, and as long as Maker does
not give Payee notice of its intent to make an interest payment as hereinafter
provided, any interest due and payable under this Note shall be added to the
principal balance of this Note and, thereafter, bear interest at the Current
Interest Rate then in effect; provided, however, that the amount of such accrued
and unpaid interest for any monthly interest payment period during the term of
this Note shall not exceed the amount set forth under the column entitled
"Accreted Principal" on Exhibit A attached hereto and incorporated herein by
this reference for each such interest payment period. In the event that Maker
elects to pay any interest due with respect to any monthly interest payment,
Maker shall provide Payee with written notice not less than three (3) days
before any interest payment date of its election to pay any interest due and
payable on such date.
6. Application of Payments. In the absence of any default or Event of
Default under this Note or any of the other Loan Documents, all payments shall
be applied first to the payment of interest, then to costs and expenses of
collection incurred as a result of any default or Event of Default under this
Note or any of the other Loan Documents, if any, then to late charges, if any,
and then to the reduction of principal, so long as any default or Event of
Default exists, payments may be applied in such manner as Payee may elect in
Payee's sole discretion.
7. Right of Prepayment. The Principal Balance may be prepaid, in whole
or in part, without penalty, upon Maker's giving Payee at least ten (10) days
prior written notice, provided that any partial payments of principal shall be
made in the amount of One Hundred Thousand Dollars ($100,000.00), or any
integral multiples thereof, and any partial prepayments shall be applied to
installments in the inverse order of maturity. Any prepayments of the Principal
Balance in full shall be accompanied by the amount of accrued and unpaid
interest computed at the Current Interest Rate on the amount prepaid, together
with all of the amounts then due and payable under any of the Loan Documents.
8. Defaults. The occurrence of any of the following events shall
constitute an Event of Default hereunder:
(a) if any portion of the Note is not paid on the date the
same shall become due and payable, and such failure continues for five (5) days
after delivery of written notice thereof to Maker;
(b) if Maker shall fail to pay or cause to be paid within
twenty (20) days of notice and demand by Payee, any instalment of any assessment
against the Mortgaged Property for local improvements heretofore or hereafter
laid, which assessment is or may become payable in annual or periodic
installments and is or may become a lien on the Mortgaged Property,
notwithstanding the fact that such instalment may not be due and payable at the
time of such notice and demand;
(c) if any Federal tax lien is filed against Maker or the
Mortgaged Property and the same is not discharged of record within thirty (30)
days; provided, however, Maker shall have the right to contest, at its own
expense, by appropriate legal proceeding promptly initiated and conducted in
good faith and with due diligence, the amount or validity of such tax lien,
provided neither the Mortgaged Property nor any part thereof or interest therein
will in the opinion of Payee be in danger of being sold, forfeited, terminated,
lost or cancelled and, provided further, Maker shall have either set aside
adequate reserves or shall have furnished such security as may be required in
the proceeding, or as may be reasonably required by ▇▇▇▇▇;
(d) if without the consent of Payee any part of the Mortgaged
Property or any interest therein is in any manner further encumbered, sold,
transferred or conveyed in violation of the terms and provisions of Section 12
of the Mortgage, or if any Improvement or the Equipment (as defined in the
Mortgage) (except for normal replacement of the Equipment or the renovation and
construction of the Improvements) is removed, demolished or materially altered;
(e) if without the consent of Payee any of the Leases (as
defined in the Mortgage) are made, cancelled or modified in violation of the
terms and provisions of Section 8 of the Mortgage or if any portion of the Rents
(as defined in the Mortgage) are paid for a period of more than one (1) month in
advance or if any of the Rents are further assigned;
(f) if any representation or warranty of Maker, or of any
Guarantor guaranteeing payment of the Note or any portion thereof or performance
by Maker of any of the terms of this Note made herein or in any such guaranty,
or in any certificate, report, financial statement or other instrument furnished
in connection with the making of this Note, the Mortgage, or any such guaranty,
shall prove false or misleading in any material respect;
(g) if Maker or any Guarantor shall make an assignment for the
benefit of creditors;
(h) if a court of competent jurisdiction enters a decree or
order for relief with respect to Maker or any Guarantor under Title 11 of the
United States Code as now constituted or hereafter amended or under any other
applicable Federal or state bankruptcy law or other similar law, or if such
court enters a decree or order appointing a receiver, liquidator, assignee,
trustee, sequestrator (or similar official) of Maker or any Guarantor, or of any
substantial part of their respective properties, or if such court decrees or
orders the winding up or liquidation of the affairs of Maker or any Guarantor
and such order or decree is not vacated within sixty (60) days of entry;
(i) if Maker or any Guarantor files a petition or answer or
consent seeking relief under Title 11 of the United States Code as now
constituted or hereafter amended, or under any other applicable Federal or state
bankruptcy law or other similar law, or if Maker or any Guarantor consents to
the institution of proceedings thereunder or to the filing of any such petition
or to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of Maker
or any Guarantor, or of any substantial part of their respective properties, or
if Maker or any Guarantor fails generally to pay their respective debts as such
debts become due, or if Maker or any Guarantor takes any action in furtherance
of any action described in this subparagraph;
(j) if Maker or any other person shall be in default beyond
any applicable grace or cure periods under the Note or under any other mortgage,
instrument or document evidencing, securing or guaranteeing payment of the Note,
in whole or in part, or otherwise executed and delivered in connection with this
Note, the Mortgage or the loan evidenced and secured thereby;
(k) if Maker shall be in default beyond applicable grace or
cure periods under any mortgage covering any part of the Mortgaged Property
whether superior or inferior in lien to the Mortgage;
(l) if the Mortgaged Property shall become subject (i) to any
tax lien, other than a lien for local real estate taxes and assessments not due
and payable, or (ii) to any mechanic's, materialman's or other lien and such
lien shall remain undischarged or unbonded for thirty (30) days after actual or
constructive notice of such lien is received by Maker;
(m) if any claim of priority to the lien of the Mortgage,
whether by title, lien or otherwise, is consented to by Maker or upheld by a
court of competent jurisdiction;
(n) if Maker shall continue to be in default under any of the
other terms, covenants or conditions of this Note or any of the other Loan
Documents for five (5) days after notice from Payee 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 Payee in the case of any other default, provided that if such
default cannot reasonably be cured within such thirty (30) day period and Maker
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 so long as it shall require Maker in the
exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred eighty (180) days
(unless a condition exists which is beyond Maker's control, in which case such
period shall be extended for a period beyond such 180-day period as long as the
Mortgaged Property and the value thereof is in no way jeopardized or threatened
by such further extension); or
(o) If Maker shall fail to comply with the Environmental
Requirements set forth in Section 44 of the Mortgage.
9. Security. This Note is secured by the Mortgage and the Other
Security Documents. Any Event of Default under this Note shall constitute a
Default or an Event of Default under the Loan Documents, and any Event of
Default under any of the Loan Documents shall constitute an Event of Default
under this Note. Upon the occurrence of any such Event of Default, the entire
unpaid Principal Balance, accrued interest and other sums owing under this Note
shall, at the option of Payee and subject to any grace period provided for in
the Mortgage, become at once due and payable in full, without notice or demand,
and Payee shall have the option to foreclose or to require the foreclosure of
any or all liens surviving the payment thereof and/or to exercise any other
rights and remedies available to Payee hereunder or under any of the other Loan
Documents, at law or in equity. The Principal Balance, interest and other sums
due upon the maturity of this Note, by acceleration or otherwise, shall bear
interest until paid in full at a rate per annum equal to the greater on a daily
basis of (i) 20%; or (ii) 5% plus the Current Interest Rate, as defined in this
Note; provided, however, that such interest rate shall in no event exceed the
maximum interest rate which Maker may by law pay, for the period after notice
from Payee that such costs or expenses were incurred to the date of payment to
Payee ("Default Rate"). All such costs and expenses incurred by Payee pursuant
to the terms of this Note, with interest, shall be secured by this Note.
10. Acceleration. Immediately upon or any time after the occurrence of
an Event of Default hereunder or under any of the other Loan Documents, Payee,
in its sole discretion may, without notice and demand, declare the Note to be
immediately due and payable in full.
11. Waiver. Maker and all parties now or hereafter liable for payment
of this Note, primarily or secondarily, directly or indirectly, and whether as
endorser, guarantor, surety or otherwise, hereby severally (i) waive presentment
for payment, demand, protest, notice of protest, notice of dishonor and all
other notices and demands whatsoever, other than any notice which may be
required pursuant to this Note and the Mortgage, (ii) consent to impairment or
release of collateral, extensions of time for payment, and acceptance of late or
partial payments before, at or after maturity, (iii) agree that Payee's
acceptance of one or more partial payments after acceleration of the maturity of
this Note will not constitute a waiver of such acceleration, regardless of any
contrary notice or statement of condition which may accompany any such partial
payment, (iv) waive any right to require Payee to proceed against any security
for this Note before proceeding hereunder, (v) agree to pay on demand a late
charge of five (5%) of any payment which is not paid within ten (10) days after
the date due, and (vi) agree to pay all costs and expenses, including reasonable
attorney fees, which may be incurred by ▇▇▇▇▇ in collecting this Note or in
enforcing and realizing upon any security for this Note.
12. Remedies Cumulative; Waiver. The remedies of Payee provided herein
or in any of the other Loan Documents shall be cumulative and concurrent, may be
pursued singularly, successively or together, at the sole discretion of Payee,
and may be exercised as often as occasion therefor shall arise. No act of
omission or commission of Payee, including specifically any failure to exercise
any right, remedy or recourse, shall be deemed to be a waiver or release of the
same, such waiver or release to be effected only through a written document
executed by ▇▇▇▇▇ and then only to the extent specifically recited therein. A
waiver or release with reference to any one event shall not be construed as
continuing, as a bar to, or as a waiver or release of any subsequent right,
remedy or recourse as to a subsequent event. Acceptance by Payee of any payment
after the due date thereof shall not be deemed to be a waiver of any default
with respect to such payment or an extension of the due date of any such payment
or the due date of any other payment. Furthermore, acceptance by Payee of any
payment in any amount less than the amount then due hereunder or under the other
Loan Documents shall be an acceptance on account only and shall not in any way
affect the existence of a default hereunder or under the other Loan Documents.
13. Usury. This Note is subject to the express condition that at no
time shall Maker be obligated or required to pay interest on the Principal
Balance at a rate which could subject Payee to either civil or criminal
liability as a result of being in excess of the maximum rate which Maker is
permitted by law to contract or agree to pay. If by the terms of this Note Maker
is at any time required or obligated to pay interest on the Principal Balance at
a rate in excess of such maximum rate, the rate of interest under this Note
shall be deemed to be immediately reduced to such maximum rate and interest
payable hereunder shall be computed at such maximum rate and the portion of all
prior interest payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the Principal Balance.
If Maker consists of more that one person or party, the obligations and
liabilities of each such person or party hereunder shall be joint and several.
14. Applicable Law. The terms of this Note shall be governed and
construed under the laws of the State of New Jersey.
15. Amendment. This Note may not be changed or terminated orally, but
only by an agreement in writing signed by the party against whom enforcement of
such change or termination is sought.
16. Validity of Obligations. Maker (and the undersigned representative
of Maker, if any) represents that Maker has full power, authority and legal
right to execute and deliver this Note and that the debt hereunder constitutes a
valid and binding obligation of Maker.
17. Headings and General Application. The section entitlements hereof
are for convenience of reference only and shall in no way affect, modify, or
define, or be used in construing the text of such section. Whenever used, the
singular number shall include the plural, the plural the singular, and the words
"Payee," "Guarantors," and "Maker" shall include their respective successors and
assigns.
18. Counting of Days. The term "days" when used herein shall mean
calendar days. If any time period ends on a Saturday, Sunday or holiday
officially recognized within which the Mortgaged Property is located, the period
shall be deemed to end on the next succeeding business day.
19. Jurisdiction. Maker hereby consents to the personal jurisdiction of
the state and federal courts of the States of New Jersey and New York.
20. Right of Offset. In the event that Plaza One Exchange Place Limited
Partnership, Harborside Exchange Place Limited Partnership, Plaza II Urban
Renewal Associates L.P., and Plaza III Urban Renewal Associates L.P.
(collectively, the "Seller") as Seller of the Mortgaged Property, fails to pay
the leasing and brokerage commissions as required by Section 4.2.8(iii) of the
Agreement of Purchase and Sale dated September 11, 1996 between Seller and
Maker, Payee hereby agrees that Maker shall be entitled to offset the amount of
the payment stipulated in Maker's notice on a dollar-to-dollar basis against the
next due payment of interest or principal due under this Note.
IN WITNESS WHEREOF, ▇▇▇▇▇ has duly executed this Note as of the day and
year first above written.
CALI HARBORSIDE PLAZA I (FEE) ASSOCIATES L.P.,
a New Jersey limited partnership
ATTEST: By: CALI SUB X, INC., a Delaware corporation,
general partner
________________________________ By:______________________________________
Name: __________________________ Its:_____________________________________
Title: [Asst.] Secretary
[S E A L]
EXHIBIT A
(Accreted Principal)