Exhibit 10.
LINE OF CREDIT NOTE
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June 20 , 2002
$14,000,000.00
On July 1, 2004, (the "Maturity Date"), for value received, FIRST REAL ESTATE
INVESTMENT TRUST OF NEW JERSEY, a business trust organized in the State of New
Jersey, (the "Borrower") promises to pay to the order of THE PROVIDENT BANK (the
"Bank") at the office of the Bank located at 830 Bergen Avenue, Jersey City, New
Jersey, or at such other place as the holder hereof may from time to time
appoint in writing, in lawful money of the United States of America in
immediately available funds, the principal sum of Fourteen Million and 00/100
($14,000,000.00) Dollars or such lesser amount as may then be the aggregate
unpaid principal balance of all loans made by the Bank to the Borrower hereunder
(each, a "Loan" and collectively, the "Loans") as shown on the schedule attached
to and made a part of this Note or as maintained on the records of the Bank.
The Borrower promises to pay interest at said office in like money on the unpaid
principal amount of each Loan from time to time outstanding at a rate per annum,
to be elected by the Borrower at the time each Loan is made, equal to either (i)
a fixed rate of one hundred seventy-five basis points above LIBOR for an
Interest Period of one (1), two (2), or three (3) months (a Loan bearing
interest at this rate is sometimes hereinafter called a "LIBOR Loan"), or (ii)
the Prime Rate (a Loan bearing interest at this rate is sometimes hereinafter
called a "Prime Rate Loan"); provided, however, that no Interest Period with
respect to a LIBOR Loan shall extend beyond the Maturity Date; and provided,
further, that if prior to the end of any such Interest Period the Borrower and
the Bank fail to agree upon a new interest Period therefor so as to maintain
such Loan as a LIBOR Loan within the pertinent time set forth in Section 1
hereof, such LIBOR Loan shall automatically be converted into a Prime Rate Loan
at the end of such Interest Period and shall be maintained as such until a new
fixed rate and a new Interest Period therefor are agreed upon. All computations
of interest shall be made on the basis of a 360 day year for the actual number
of days elapsed.
Interest on each Loan shall be payable monthly on the first day of each month
commencing on the first such day to occur after a Loan is made hereunder and,
together with principal, on the Maturity Date hereof. If any payment of
principal or interest becomes due on a day on which the banks in the State of
New Jersey are required or permitted by law to remain closed, such payment may
be made on the next succeeding day on which such banks are open, and such
extensions shall be included in computing interest in connection with such
payment.
All payments shall be made by Borrower to Bank at 830 Bergen Avenue, Jersey
City, New Jersey or such other place as Bank may from time to time specify in
writing in lawful currency of the United States of America in immediately
available funds, without counterclaim or setoff and free and clear of, and
without any deduction or withholding for, any taxes or other payments.
All payments shall be applied first to the payment of all fees, expenses
and other amounts due to the Bank (excluding principal and interest), then to
accrued interest, and the balance on account of outstanding principal; provided,
however, that: after maturity of this Note or upon the occurrence of an Event of
Default payments will be applied to the obligations of Borrower to Bank as Bank
determines in its sole discretion.
Upon the occurrence of an Event of Default or after the Maturity Date,
Borrower's right to select interest rate options shall cease and the unpaid
principal of all Loans shall, at the option of the Bank, bear interest at a rate
which is four (4) percentage points per annum greater than the Prime Rate (the
Default Rate). In no event shall interest payable hereunder be in excess of the
maximum rate of interest permitted under applicable law.
If the entire amount of any required installment of principal and/or
interest is not paid in full within ten (10) days after the same is due, the
Borrower shall pay a late fee equal to five percent (5%) of the required
payment.
The Borrower hereby expressly authorizes the Bank to record in its records
or on the attached schedule the amount and date of each Loan, the rate of
interest thereon, Interest Period thereof and the date and amount of each
payment of principal. All such notations shall be presumptive as to the
correctness thereof; provided, however, the failure of the Bank to make any such
notation shall not limit or otherwise affect the obligations of the Borrower
under this Note.
In consideration of the granting of the Loans evidenced by this Note, the
Borrower hereby agrees as follows:
i. Loan Requests. Requests for LIBOR Loans, and for Interest Periods
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subsequent to the initial interest Period applicable thereto, shall be made not
less than three (3) Business Days prior to the first day of each Interest Period
for each such Loan. Requests for Prime Rate Loans may be made up until 1 p.m. on
the date the Loan is to be made. Any request for a Loan may be written or oral,
but if oral, written confirmation thereof must be received by the bank within
three (3) Business Days thereafter,
2. Prepayment; Yield Maintenance Fee.
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The Borrower may prepay each Loan at any time, in whole or in part, without
premium or penalty upon at least three (3) Business Days prior written notice to
Bank.
3. Alternate Rate of Interest. In the event, and on each occasion, that on
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the day two Business Days prior to the commencement of any Interest Period for a
LIBOR Loan, the Bank shall have determined that reasonable means do not exist
for ascertaining the LIBOR Rate, the Bank shall, as soon as practicable
thereafter, give notice of such determination to the Borrower. In the event of
any such determination, until the circumstances giving rise to such notice no
longer exist, the Bank shall use the applicable thirty, sixty or ninety day U.S.
Treasury Rate plus one-hundred seventy-five basis points for purposes of
calculating the interest rate on a LIBOR Loan (a loan bearing interest at this
rate is sometimes hereinafter called a "US Treasury Rate Loans"). Each
determination by the Bank hereunder shall be conclusive absent manifest error.
Thus, for any such interest rate period that the Bank shall have determined that
reasonable means do not exist for ascertaining the LIBOR Rate, Borrower may
elect between the Prime Rate option or the applicable US Treasury Rate option.
4. Change in Legality.
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(a) Notwithstanding anything to the contrary herein contained, if any change in
any law or regulation or in the interpretation thereof by any governmental
authority charged with the administration or interpretations thereof shall make
it unlawful for the Bank to make or maintain any LIBOR Loan, then, by written
notice to the Borrower, the Bank may:
(i) declare that LIBOR Loans will not thereafter be made by the Bank
hereunder, whereupon the Borrower shall be prohibited from requesting LIBOR
Loans from the Bank hereunder unless such declaration is subsequently withdrawn;
and
(ii) require that all outstanding LIBOR Loans made by it be converted at
Borrower's option to either Prime Rate Loans or US Treasury Rate Loans, in which
event (x) all such LIBOR Loans shall be automatically converted to Prime Rate
Loans or US Treasury Rate Loans as of the effective date of such notice as
provided in paragraph (b) below and (y) a11 payments and prepayments of
principal which would otherwise have been applied to repay the converted LIBOR
Loans shall instead be applied to repay the Prime Rate Loans or US Treasury Rate
Loans resulting from the conversion of such LIBOR Loans.
(b) For purposes of this Section 4, a notice to the Borrower by the Bank
pursuant to sub-paragraph (a) above shall be effective, if Lawful, on the last
day of the then current Interest Period.
5. Security For The Note.
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This Note is secured by the following (all of which are hereinafter
collectively referred to as the "Collateral"):
(i) first mortgage lien encumbering certain real property located at 830 and 864
Franklin Avenue (Lot 2 in Block 1513, Lot 1 in Block 1410 and Lot 1.01 in Block
1400)
Franklin Lakes, N.J., 208 Rock Road (Lot 19 Block 115), Glen Rock, N.J., 160
Terrace Avenue (Lot 22 Block 175), Hasbrouck Heights, N.J., 205-231 8th Street
(Lot 9, 3 and 4 Block 114), Lakewood, N.J. and 340 Grand Avenue (Lots 11, 12 and
12.01 Block 203) Palisades Park, N.J. (collectively the "Mortgaged Premises"),
pursuant to the terms, covenants and conditions of those certain Commercial
Mortgages, Security Agreements and Fixture Filings of even date herewith
executed and delivered by Borrower to the Bank (collectively the "Mortgage";
(ii) an assignment of any and all present and future leases of the Mortgaged
Premises or any part thereof pursuant to the terms, covenants and conditions of
those certain Assignments of Leases of even date herewith executed and delivered
by Borrower to the Bank (the "Assignment");
(iii) a first priority security interest in all furniture, fixtures and
equipment owned by Borrower and now or hereafter installed in the Mortgaged
Premises pursuant to the terms, covenants and conditions of the Mortgage;
(iv) An Environmental Indemnity Agreement dated as of even date herewith from
Borrower in favor of Bank.
This Note, the Mortgage, the Assignment, the Environmental Indemnity
Agreement and any and all other documents and instruments executed by Borrower
in connection with this Note and the loans evidenced hereby are hereinafter
collectively referred to as the "Loan Documents".
In addition to the above Collateral, the Borrower hereby grants to the Bank
a continuing security interest in all property of the Borrower, now or hereafter
in the possession of the Bank or any of its affiliates in any capacity
whatsoever, including, but not limited to, any balance or share of any deposit
excluding trust or rent security account, as security for the payment of this
Note and other liabilities of the Borrower to the Bank, which security interest
shall be enforceable and subject to all the provisions of this Note, as if such
property were specifically pledged hereunder and after the occurrence of an
uncured Event of Default, the proceeds of such property may be applied at any
time and without notice to any of the Borrower's liabilities to the Bank under
this Note.
6. Warranties and Representations. The Borrower represents and warrants that:
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(a) it is a business trust duly organized, validly existing under the laws of
the State of New Jersey; (b) the execution, issuance and delivery of this Note
by the Borrower are within its trust powers and have been duly authorized, and
the Note is valid, binding and enforceable in accordance with its terms, and is
not in violation of law or of the terms of the Borrower's Declaration of Trust
and does not result in the breach of or constitute a default under any
indenture, agreement or undertaking to which the Borrower is a party or by which
it or its property may be bound or affected; (c) no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of this Note; (d) it has delivered or caused to be delivered its
most recent balance sheet, income statement and statement of cash flows to the
Bank which are complete and correct and fairly represent the financial condition
of the Borrower and its subsidiaries as of the dates thereof and for the periods
covered thereby, which financial condition has not materially, adversely,
changed since the date of the most recently dated balance sheet heretofore
furnished to the Bank; (e) no Event of Default (as hereinafter defined) has
occurred and no event has occurred which with the giving of notice or the lapse
of time or both would constitute an Event of Default; (f) the Borrower shall not
use any part of the proceeds of any Loan to purchase or carry any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or to extend credit to others for the purpose of purchasing or
carrying any margin stock; (g) there is no pending or, to the knowledge of the
Borrower, threatened action or proceeding affecting the Borrower before any
court, governmental agency or arbitrator which, if determined adversely to the
Borrower would have a materially adverse effect on the financial condition or
operations of the Borrower except as described in the financial statements of
the Borrower heretofore furnished to the Bank; and (h) on the occasion of the
granting of each Loan all representations and warranties contained herein shall
be true and correct and with the same force and effect as though such
representations and warranties had been made on and as of the date of the making
of each such Loan.
7. Future Loans And Advances.
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The Bank may make additional loans in the future to the Borrower, and may
advance sums in the future on behalf of the Borrower or to protect and preserve
the Collateral, at any time before the satisfaction of this Note, and all such
sums shall be evidenced and secured by this Note and the Collateral.
8. Default; Default Rate Of Interest.
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Upon the occurrence of any of the following specified events of default (each an
Event of Default): (a) any payment hereunder shall not be made when due, or (b)
if the Borrower defaults in the performance of any of the other terms or
provisions of this Note, the Mortgage, the Assignment, or any other Loan
Documents, or; (c) if Borrower defaults in the performance of any obligation of
Borrower to Bank pursuant to any other present or future agreement between
Borrower and Bank, related to the Loans evidenced by this Note; and following
(i) notice and a ten (10) day right to cure in the event of a monetary default;
or (ii) notice and a thirty (30) day right to cure in the event of a
nonmonetary, non-bankruptcy default, then this Note shall be in default and the
entire principal sum or so much of the principal remaining unpaid with all
interest accrued thereon, together with any other sums due the Bank under the
Loan Documents, shall, at the option of the Bank and without notice, become due
and payable immediately, and interest on the principal sum shall thereafter be
computed at the Default Rate. Payment of the foregoing may be enforced and
recovered at any time by one or more of the remedies provided to the Bank in
this Note, the Mortgage, the Assignment or any other Loan Documents, it being
specifically understood and agreed that the default provisions set forth in the
Mortgage shall govern in the event of any conflict in such provisions in the
aforesaid instruments.
9. No Waiver By Bank.
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Any failure by the Bank to insist upon strict performance by the Borrower
of any of the terms and provisions of this Note, the Mortgage, the Assignment or
any other Loan Documents shall not be deemed to be a waiver of any of the terms
or provisions thereof, and the Bank shall have the right thereafter to insist
upon strict performance by the Borrower of any and all of them.
10. Definitions. As used herein:
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(a) "Business Day" means any day other than a Saturday, Sunday or day
which shall be in the State of New Jersey a legal Holiday or day on
which banking institutions are required or authorized to close.
(b) The term "LIBOR" or "LIBOR Rate" shall mean, as applicable to any LIBOR
Loan, the rate per annum as determined on the basis of the offered rates
for deposits in U.S. Dollars, for a period of time comparable to such LIBOR
Loan which is reported in the Wall Street Journal Money Rates section as
the London. interbank Offered Rate on the day that is two (2) London
Banking Days preceding the first day of such LIBOR Loan; provided,
however,if the rate described above does not appear in the Wall Street
Journal on any applicable interest determination date, the LIBOR rate shall
be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in U.S. dollars for a period of time comparable
to such LIBOR Loan which are offered by any major banks in the London
Interbank market at approximately 11:00 a.m. London time, on the day that
is two (2) London Banking Days preceding the first day of such LIBOR Loan
as selected by Bank.
(c) "Interest Period" means that period selected by the Borrower, within the
limitations of the second paragraph of this Note, during which a LIBOR Loan
may bear interest at the applicable fixed rate.
(d) "Prime Rate" means the variable per annum rate of interest so designated
from time to time as the prime rate publishedin the Wall Street Journal as
its prime rate The determination and publication of such Prime Rate shall
not in any way preclude or limit Bank from lending to certain borrowers
from time to time at a rate of interest less than such Prime Rate.
(e) "U.S. Treasury Rate" means the applicable thirty, sixty or ninetyday United
States Treasury Note rate as published in the Wall Street Journal.
11.Payment of Fees and Expenses. Borrower shall pay on demand all reasonable
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expenses of Bank in connection with the preparation, administration,
default, collection, waiver or amendment of Loan terms, or in connection
with Bank's exercise, preservation or enforcement of any of its rights,
remedies or options hereunder, including, without limitation, reasonable
fees of outside legal counsel or the allocated costs of in-house legal
counsel, accounting, consulting, brokerage or other similar professional
fees or expenses, and any fees or expenses relating to any appraisals or
examinations conducted in connection with any Loan or any collateral
therefor (required to be made by applicable laws or regulations), and the
amount of all such expenses shall, until paid, bear interest at the Prime
Rate applicable to principal hereunder (including any default rate) and be
an obligation secured by any collateral.
12, Waiver Of Notice By Borrower.
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Presentment, demand of payment, notice of dishonor or nonpayment, protest,
notice of protest on this Note, and the giving of notice of default or other
notice to any party liable on this Note are hereby waived, jointly and
severally, by the Borrower and by any and all such other parties, including
without limitation any guarantors who at any time may be liable hereon in any
capacity. It is expressly agreed by the Borrower and all such other parties,
that the maturity of this Note, any payment hereunder, or any term or condition
hereof, may be extended, modified, waived or renewed from time to time without
in any way affecting the liability of the Borrower. The Borrower and all such
other parties consent to the release of any collateral, with or without
substitution, and to the release or addition, without notice and without
affecting their liability hereunder of any makers, endorsers, guarantors or
sureties.
13. Change Of Interest Rate After Maturity.
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After the Maturity Date, any unpaid balance of this Note (including
principal and interest) shall bear interest at the Default Rate.
14. No Usurious Amounts.
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Anything herein contained to the contrary notwithstanding, the Borrower
does not agree and shall not be obligated to pay interest hereunder at a rate
which is in excess of the maximum rate permitted by law. If by the terms of this
Note, the Borrower is at any time required to pay interest 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 the portion of all prior interest
payments in excess of such maximum rate shall be applied to and shall be deemed
to have been payments in reduction of the outstanding principal balance.
15. Partial Invalidity.
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The unenforceability or invalidity of any one or more provisions shall not
render any other provisions herein contained unenforceable or invalid.
16. Binding Effect.
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The covenants, conditions and agreements contained in this Note shall bind
and the benefits thereof shall inure to, the respective parties hereto and their
respective heirs, executors, administrators, successors and assigns; provided
that this Note cannot be assigned by the Borrower without the prior express
written consent of the Bank.
17. No Oral Modifications.
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This Note may not be changed or terminated orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
18. Disclosure Of Financial Information.
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The Bank is hereby authorized to disclose any financial or other
information about the Borrower to any regulatory body or agency having
jurisdiction over the Bank or to any present, future or prospective participant
or successor in interest in any Loan or other financial accommodation made by
the Bank to the Borrower.
19. Completion Of The Note.
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The Bank is authorized by the Borrower, without notice, to date this Note
as of the day when the first disbursement of the Loan evidenced hereby is made
and to fill in any blank spaces to conform to the terms upon which the Loan is
made.
20. Remedies Of Bank.
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The remedies of the Bank, as provided herein, shall be cumulative and
concurrent and may be pursued singly, successively or together, at the sole
discretion of the Bank, and may be exercised as often as occasion therefor shall
occur, and the failure to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof. The Bank shall have the right to take
any action it deems appropriate without the necessity of resorting to any
Collateral securing this Note.
21. Right Of Setoff By The Bank.
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For so long as the Bank is the holder of this Note, upon the occurrence of
any Event of Default hereunder, in addition to any other remedy provided by law,
the Bank shall have the right immediately and without notice or other acts to
setoff against any of the Borrower's obligations under this Note any sum owed by
the Bank or any of its affiliates in any capacity to the Borrower whether due or
not, or any property of the undersigned in the possession of the Bank or any of
its affiliates, and the Bank shall be deemed to have exercised such right of
setoff and to have made a charge against any such sum or property immediately
upon the occurrence of an Event of Default, even though the actual book entries
may be made at some time subsequent.
22. Captions
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The captions preceding the text of the sections of this Note are used
solely for the convenience of reference and shall not affect the meaning or
construction of this Note.
23. New Jersey Law Governs.
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This Note shall be governed and construed in accordance with the laws of
the State of New Jersey.
24. Singular; Plural; Gender.
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The words "Borrower" and "Bank" include singular and plural, individual or
corporation, and the respective heirs, executors, administrators, successors and
assigns of the Borrower or the Bank, as the case may be. The use of any gender
applies to all genders. If more than one party is named as the Borrower, the
obligation hereunder of each such party is joint and several.
25. Waiver Of Jury Trial.
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IN ANY LITIGATION BASED ON, OR ARISING OUT OF OR RELATING TO OR IN
CONNECTION WITH ANY OF THE MATTERS CONTAINED IN THIS NOTE IN WHIG-i THE BORROWER
OR ANY PARTY LIABLE HEREON AND THE BANK ARE ADVERSE PARTIES, THE BORROWER, ANY
AND ALL SUCH OTHER PARTIES AND THE BANK EACH VOLUNTARILY AND INTENTIONALLY WAIVE
TRIAL BY JURY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO MAKE THE
LOAN TO BORROWER.
IN WITNESS WHEREOF, the Borrower has executed this instrument the day and
year first above mentioned.
BORROWER:
Attest: FIRST REAL ESTATE INVESTMENT TRUST
OF NEW JERSEY, a business trust
Organized in the State of New Jersey
/s/Christopher W. McGarry By: /S/ Robert S. Hekemian
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Executive Secretary Chairman of the Board