EXHIBIT 10.20
CASH MANAGEMENT AGREEMENT
Dated: as of November 1, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLC
as Borrower
AND
EUROHYPO AG, NEW YORK BRANCH
as Lender
AND
PNC BANK, NATIONAL ASSOCIATION
as Agent
AND
▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇▇ PROPERTIES, INC., a Massachusetts
corporation ("Manager").
W I T N E S S E T H:
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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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇▇▇▇ 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 ▇▇-▇▇▇▇▇▇▇.
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, ▇▇▇ 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
▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Head of Portfolio Operations
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Eurohypo AG, New York Branch
1114 Avenue of the Americas
▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Legal Director
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Cedar-Franklin Village LLC
c/o Cedar Shopping Centers Partnership, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Stroock & Stroock & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Manager: ▇▇▇▇▇▇▇▇ Properties, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Agent: PNC Bank, National Association
Treasury Management
Two PNC Plaza, 31st Floor
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: PNC Bank, National Association
Treasury Management
Two PNC Plaza, 31st Floor
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Risk Manager
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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:
▇▇▇▇▇▇▇▇ 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
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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__