PROMISSORY NOTE
Date of Note: As of November 22, 2002
Note Amount: $20,000,000.00
Maturity Date: November 22, 2007
FOR VALUE RECEIVED, the undersigned ("Maker") does hereby covenant and
promise to pay to the order of WASHINGTON MUTUAL BANK, FA or its successors or
assigns (hereinafter collectively "Payee"), on the Maturity Date, in immediately
available funds, at EAB Plaza - 13th Floor, Uniondale, New York 11556, or at
such other place as Payee may designate to Maker in writing from time to time
(it being understood that all or any portions of the indebtedness evidenced
hereby, whether principal or interest, at Payee's election, may be payable at,
or for the account of, Payee's lending offices at other locations), in legal
tender of the United States, the Note Amount or so much thereof as shall be
advanced by Payee pursuant to the Loan Agreement and remain unpaid, together
with interest at the higher of: (a) the "LIBOR Based Rate", which shall be the
rate per annum (expressed as a percentage) determined by Payee to be equal to
the sum of (i) the LIBOR Rate (as hereinafter defined), plus (ii) one hundred
seventy (170) basis points, or (b) 3.30% per annum, to be computed on the basis
of a three hundred sixty (360) day year on so much of the Note Amount as is from
time to time outstanding (the "Principal Amount"), all as hereinafter provided,
and with a late payment premium of 4% of any principal or interest payment made
more than ten (10) days after the due date thereof which shall be due with any
such late payment.
The following additional terms, as used in this Note, shall have the
meanings indicated opposite them:
"Additional Costs" -- Any costs, losses or expenses incurred by Payee
which it determines are attributable to its making or maintaining the
Loan, or its obligation to make any Loan advances, or any reduction in
any amount receivable by Payee under the Loan or this Note.
"Euro-Dollar Business Day" -- Any day on which commercial banks are
open for domestic and international business (including dealings in
U.S. Dollar deposits) in London and New York City.
"Federal Funds Rate" -- For any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions
as published by the Federal Reserve Bank of New York for such day or,
for any day that is not a banking day in New York City, for the
immediately preceding banking day.
"Interest Period" - The monthly period commencing with and including
the first day of a calendar month to and including the last day of the
calendar month in which such period terminates, and during which
interest at the LIBOR Based Rate, determined as provided in this Note,
shall be applicable to the Principal Amount in question, provided,
however, that the first Interest Period shall commence on the date
hereof, and in no event shall any Interest Period extend beyond the
Maturity Date, as the same may have been extended pursuant to an
exercise of Maker's right, if any, to extend the same as may be
provided herein or in the Loan Agreement.
"LIBOR Rate" -- For any day, the rate per annum (rounded upwards to the
nearest 1/16 of 1%) determined by Payee in accordance with Payee's
customary general practice, at which deposits in United States Dollars
in amounts approximately equal to the outstanding principal balance of
this Note and with maturities having the same period of time as the
Interest Period are offered in immediately available funds in the
London interbank market by leading banks in the Euro-Dollar market as
of 11:00 a.m. (London time) two (2) Euro-Dollar Business Days prior to
the first day of the applicable Interest Period as published by
Telerate News Service on Telerate Page 3750, or, if such rate is not
available for any reason, then the rate per annum (rounded upwards to
the nearest 1/16 of 1%) appearing on Reuters Screen LIBO Page as the
London Interbank Offered Rate for deposits in United States Dollars at
approximately 11:00 a.m. (London time), on such day; provided, however,
if more than one rate is specified on Reuters Screen LIBO Page, then
the applicable rate shall be the arithmetic mean of all such rates. If
any such day on which such rate is to be determined is not a
Euro-Dollar Business Day, then the applicable rate for such day shall
be the LIBOR Rate for the immediately-preceding Euro-Dollar Business
Day.
"Loan" -- The loan in the amount of up to $20,000,000.00 to be made to
Maker by Payee pursuant to the Loan Agreement and evidenced hereby.
"Loan Agreement" -- The Revolving Loan Agreement of even date herewith
between Payee and Maker, pursuant to which the Loan is being made.
"Maturity Date" -- November 22, 2007, as same may be extended pursuant
to the terms and conditions hereunder.
"Regulation D" - Regulation D of the Board of Governors of the Federal
Reserve System, as from time to time amended or supplemented.
"Regulatory Change" -- With respect to the charging and collecting of
interest at the LIBOR Based Rate, any change after the date hereof in
United States federal, state or foreign laws or regulations (including
Regulation D), or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks
including Payee under any United States federal, state or foreign laws
or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof, excluding any change the effect of which is
reflected in a change in the LIBOR Based Rate.
2
Interest on the Principal Amount shall bear interest from the date
hereof at the LIBOR Based Rate, except as otherwise provided in this Note. Each
determination of the LIBOR Rate by Payee pursuant to this Note shall be made by
Payee in good faith and shall be conclusive and binding on Maker in the absence
of manifest error.
Interest on the Principal Amount (whether computed at the LIBOR Based
Rate or the Prime Based Rate) shall be payable monthly on the first day of the
first calendar month ("First Payment Date") following the initial advance of
Loan proceeds under the Loan Agreement which are evidenced hereby and on the
first day of each month thereafter until this Note is repaid in full, as long as
there is any Principal Amount outstanding. If Maker shall exercise the Extension
Option (as hereinafter defined), then during the Extension Term (as hereinafter
defined), Maker shall make monthly payments to be applied toward the reduction
of the Principal Amount based on a 25-year amortization schedule. On the
Maturity Date (as the same may be extended pursuant to the terms and conditions
hereof), the unpaid Principal Amount, together with all accrued and unpaid
interest, fees and charges hereunder, shall be due and payable.
Maker shall pay to Payee, promptly upon demand, such amounts as are
necessary to compensate Payee for Additional Costs resulting from any Regulatory
Change which (i) subjects Payee to any tax, duty or other charge with respect to
the Loan or this Note, or changes the basis of taxation of any amounts payable
to Payee under the Loan or this Note (other than taxes imposed on the overall
net income of Payee or of its applicable lending office by the jurisdiction in
which Payee's principal office or such applicable lending office is located),
(ii) imposes, modifies or deems applicable any reserve, special deposit or
similar requirements relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, Payee, (iii) imposes on Payee or on
the London interbank market any other condition affecting the Loan or this Note,
or any of such extensions of credit or liabilities or (iv) imposes any capital
adequacy requirements on Payee by virtue of the Loan or this Note. Payee will
notify Maker of any event occurring after the date hereof which would entitle it
to compensation pursuant to this paragraph as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation, and will
designate a different lending office for those portions of the Loan affected by
such event if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in Payee's sole opinion, be disadvantageous to
it, provided that Payee shall have no obligation to so designate a lending
office located in the United States.
3
Without limiting the effect of the immediately preceding paragraph, in
the event that, by reason of any Regulatory Change, (i) Payee incurs Additional
Costs based on or measured by the excess above a specified level of the amount
of (1) a category of deposits or other liabilities of Payee which includes
deposits by reference to which the LIBOR Rate is determined as provided in this
Note and/or (2) a category of extensions of credit or other assets of Payee
which includes loans the interest on which is determined on the basis of rates
referred to in the definition of "LIBOR Rate" set forth above, (ii) Payee
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold or (iii) it shall be unlawful or impossible for
Payee to make or maintain the Loan (or any portion thereof) at the LIBOR Based
Rate, then Payee's obligation to make or maintain the Loan (or portions thereof)
at the LIBOR Based Rate shall be suspended and Payee shall give notice thereof
to Maker and, upon the giving of such notice, interest payable hereunder shall
be converted to the Prime Based Rate. "Prime Based Rate" shall mean the rate per
annum (expressed as a percentage determined by Payee to be equal to the sum of
(a) the greater of (i) the Federal Funds Rate plus 1/2 of 1% or (ii) the
commercial lending rate announced from time to time by Payee as its "prime
rate", each change in said rates to be effective as of the date of such change,
plus (b) one hundred (100) basis points. If subsequently Payee determines that
such Regulatory Change has ceased to be in effect, Payee will so advise Maker
and the rate of interest payable hereunder will become the LIBOR Based Rate from
the date determined by Payee and advised to Maker.
Determinations by Payee of the existence or effect of any Regulatory
Change on its costs of making or maintaining the Loan, or portions thereof, at
the LIBOR Based Rate, or on amounts receivable by it in respect thereof, and of
the additional amounts required to compensate Payee in respect of Additional
Costs, shall be conclusive, provided that such determinations are made on a
reasonable basis.
Anything herein to the contrary notwithstanding, if, at the time of or
prior to the determination of the LIBOR Based Rate, Payee determines, in its
sole and absolute discretion (which determination shall be conclusive) that (i)
by reason of circumstances affecting the London interbank market generally,
adequate and fair means do not or will not exist for determining the LIBOR Based
Rate applicable to any Interest Period or (ii) the LIBOR Rate, as determined by
Payee, will not accurately reflect the cost to Payee of making or maintaining
the Loan (or any portion thereof) at the LIBOR Based Rate, then Payee shall give
Maker prompt notice thereof, and the Principal Amount shall bear interest at the
Prime Based Rate. If at any time subsequent to the giving of such notice, Payee
determines that because of a change in circumstances the LIBOR Based Rate is
again available to Maker hereunder, Payee shall so advise Maker and the rate of
interest payable hereunder shall convert from the Prime Based Rate to the LIBOR
Based Rate on the date determined by Payee and advised to Maker.
Maker shall pay to Payee, immediately upon request and notwithstanding
any contrary provisions contained in the Mortgage (as hereinafter defined) or
other Loan Documents, such amounts as shall, in the conclusive judgment of
Payee, compensate Payee for any loss, cost or expense (including, without
limitation, the costs of breaking any "LIBOR" contract, if applicable, or
funding losses determined on the basis of Payee's reinvestment rate and the
interest rate herein) incurred by it as a result of (i) any payment or
prepayment (under any circumstances whatsoever, whether voluntary or
involuntary) of any portion of the Principal Amount bearing interest at the
LIBOR Based Rate on a date other than the last day of an applicable Interest
Period, (ii) the conversion (for any reason whatsoever, whether voluntary or
involuntary) of the rate of interest payable hereunder from the LIBOR Based Rate
to the Prime Based Rate with respect to any portion of the Principal Amount then
4
bearing interest at the LIBOR Based Rate on a date other than the last day of an
applicable Interest Period, or (iii) the failure of all or a portion of the
advance of Loan proceeds which was to have borne interest at the LIBOR Based
Rate to be made, which amounts shall include, without limitation, an amount
equal to the excess, if any, of (x) the amount of interest that would have
accrued at the LIBOR Based Rate on the amount so prepaid, converted or not
advanced, as the case may be, for the period from the date of occurrence to the
last day of the applicable Interest Period over (y) the amount of interest (as
determined in good faith by Payee) that Payee would have paid to Maker (and
other customers) on a Euro-Dollar deposit placed by Payee with leading banks in
the London interbank market for an amount comparable to the amount so prepaid,
converted or not advanced, as the case may be, for the period from the date of
occurrence to the last day of the Interest Period. Notwithstanding anything in
this paragraph or elsewhere in this Note to the contrary, Maker shall not be
liable to Payee for any loss, cost or expense incurred by Payee as a result of
the payment or prepayment of any portion of the Principal Amount arising from
the application of insurance proceeds or condemnation awards.
Any amount payable by Maker, under the immediately preceding paragraph
shall be paid to Payee within five (5) business days of receipt by Maker of a
certificate signed by an officer of Payee setting forth the amount due and the
basis for the determination of such amount, which statement shall be conclusive
and binding upon Maker, absent manifest error. Failure on the part of Payee to
demand payment from Maker for any such amount attributable to any particular
period shall not constitute a waiver of Payee's right to demand payment of such
amount for any subsequent or prior period. Payee shall use reasonable efforts to
deliver to Maker prompt notice of any event described in the immediately
preceding paragraph and of the amount to be paid hereunder as a result thereof;
provided, however, any failure by Payee to so notify Maker shall not affect
Maker's obligation to make the payments to be made hereunder as a result
thereof. All amounts which may be come due and payable by Maker in accordance
with the provisions hereof shall constitute additional interest hereunder and
shall be secured by the Mortgage and the other Loan Documents.
Maker shall have the right to prepay this Note, in whole or in part,
upon (a) two (2) business days prior written notice thereof given to Payee, and
(b) the payment to Lender of (i) all accrued interest on the amount prepaid (and
all late charges and other sums that may be payable hereunder or under the other
Loan Documents) to the date so fixed and (c) if any prepayment occurs during the
Extension Term, a prepayment charge in an amount equal to all losses, costs and
expenses (including without limitation the costs of breaking any "LIBOR"
contract, if applicable, or funding losses determined on the basis of Payee's
reinvestment rate and the interest rate herein) incurred by payee as a result of
any such prepayment. Payee shall provide to Maker a statement explaining the
amount of any such loss, cost or expense, which statement shall be conclusive
and binding upon Maker absent manifest error.
5
Any portion of the Principal Amount to which the LIBOR Based Rate is
not or cannot, pursuant to the terms hereof, be applicable shall bear interest
at the Prime Based Rate.
This Note is secured by, among other things, a Mortgage, Assignment of
Leases and Rents and Security agreement of even date herewith made by Maker for
the benefit of Payee (the "Mortgage") of premises situated as indicated below,
which Mortgage specifies various defaults upon the happening of which all sums
owing on this Note may be declared immediately due and payable.
If a default shall occur hereunder or under the Mortgage and such
default shall continue after the expiration of any applicable grace period,
interest on the Principal Amount shall, at the option of Payee, immediately be
converted to the Prime Based Rate. The foregoing provision shall not be
construed as a waiver by Payee of its right to pursue any other remedies
available to it under the Mortgage or any other instrument evidencing or
securing the Loan, nor shall it be construed to limit in any way the application
of the "Default Rate" as provided in the Mortgage.
As a material inducement to Payee to fund the Loan to Maker, Maker
agrees that if at any time during the term of the Loan the LIBOR Rate shall
equal at least 6.55%, Maker shall purchase, at its sole cost and expense, an
"interest rate cap" (the "Rate Cap") from Fleet Bank, Payee or other lender and
shall enter into an agreement (the "Rate Cap Agreement") in form and substance
acceptable to Payee, in its sole discretion, which shall provide, inter alia,
for a rate cap of eight and one quarter percent (8.25%) per annum on the LIBOR
Based Rate applicable to a one (1) month Interest Period and a notional amount
of principal indebtedness for the Mortgaged Property equal to fifty percent
(50%) of the Principal Amount and shall have a term expiring on the Maturity
Date (as the same may be extended pursuant to the terms hereof); provided,
however, the foregoing requirement shall be waived if at the time the LIBOR Rate
reached at least 6.55%, forty percent (40%) of the aggregate loan outstandings
at Payee is fixed pursuant to existing interest rate cap or swaps agreements.
Maker hereby collaterally assigns to Payee all of Maker's right, title and
interest in, to and under the Rate Cap and the Rate Cap Agreement as additional
security for the Loan, and shall provide Payee with any additional documentation
reasonably requested by Payee in order to confirm or perfect such security
interest during the term of the Loan, at Maker's sole cost and expense.
Any indebtedness incurred pursuant to the Rate Cap Agreement shall
constitute additional interest evidenced by this Note and secured by the
Mortgage and the other Loan Documents to the same extent and effect as if the
terms and provisions of the Rate Cap Agreement were set forth herein.
Neither the provisions of the preceding three paragraphs nor the
purchase of the Rate Cap Agreement by Maker shall be or be deemed to be a waiver
or cure of any default or Event of Default hereunder or under any of the other
Loan Documents, or constitute any agreement or impose any obligation to extend
the Maturity Date or the time for performance of any obligations of Maker
hereunder or under the other Loan Documents.
6
Maker shall have one (1) option (the "Extension Option") to extend the
Maturity Date for an additional eighteen (18) months to May 22, 2009 (the
"Extended Maturity Date"; such additional 18-month period being sometimes
referred to herein as the "Extension Term"), subject to the following terms and
conditions:
(A) Maker shall notify Payee in writing of its exercise of the
Extension Option not more than one hundred twenty (120) days and not
less than (30) days prior to the Maturity Date;
(B) There shall be no Event of Default (as defined in the
Mortgage) existing hereunder, under the Mortgage or under any of the
other Loan Documents either on the date Maker exercises the Extension
Option or on the Maturity Date;
(C) Maker shall pay to Payee, within ten (10) days after the
date of exercise of the Extension Option, a nonrefundable extension fee
equal to fifteen one-hundredths percent (0.15%) of the outstanding
principal balance of the Loan at the time Maker exercises the Extension
Option hereunder;
(D) The financial condition of Maker and/or any Guarantor (as
defined in the Mortgage) shall not have suffered any material adverse
changes subsequent to the date hereof as determined by Payee in its
sole discretion;
(E) The condition of the Mortgaged Property shall not have
suffered any material adverse changes subsequent to the date hereof as
determined by Payee in its sole discretion;
(G) Maker shall execute and deliver to Payee any and all
documents, consistent with the terms hereof and the Loan Documents,
deemed necessary by Payee and its counsel in connection with the
extension of the Maturity Date at Maker's sole cost and expense,
including, without limitation, any amendments and/or restatements to
this Note and any of the other Loan Documents;
(H) Maker shall have delivered to Payee, at Maker's sole cost
and expense, a new appraisal of the Mortgaged Property satisfactory to
Payee in its sole discretion verifying that the Loan to Value Ratio (as
hereinafter defined) with respect to the Mortgaged Property does not
exceed sixty-five percent (65%), as determined by Payee in its sole
discretion. As used herein the term "Loan to Value Ratio" shall mean a
fraction (1) the numerator of which shall be an amount equal to the
then outstanding Principal Amount, and (2) the denominator of which
shall be the then appraised value of the Mortgaged Property, as shown
on the appraisal delivered to Payee pursuant to this clause (H) above;
7
(I) Maker shall have delivered to Payee proof acceptable to
Payee in its sole discretion verifying that the Mortgaged Property has
achieved and will be able to sustain a Debt Service Coverage (as
hereinafter defined), as determined by Payee in its sole discretion,
equal to or greater than 1.40:1. As used herein the term "Debt Service
Coverage" shall mean the ratio of the Net Annual Income (as hereinafter
defined) to the annual payments of interest and principal required to
be made by Maker under this Note, based upon the then projected
outstanding principal amount of this Note on the Maturity Date and an
interest rate equal to the greater of six and one-half percent (6.50%)
or the interest rate that would be in effect on the first day of the
Extension Term. "Net Annual Income" shall mean the gross rentals
actually collected, during the twelve month period ending on the last
day of the last month of the full calendar quarter that is immediately
prior to the date of the extension notice, by Maker or its agents from
the tenants leasing space in the improvements located on the Mortgaged
Property pursuant to written leases entered into on an arms-length
basis, less all expenses incurred by Maker or its agents during such
twelve-month period in operating and maintaining the Mortgaged
Property, including, without limitation, real estate taxes, water and
sewer charges, insurance premiums, management fees, utility costs, and
professional fees, but excluding brokerage commissions and the costs of
making tenant improvements, and without deduction for depreciation and
other non-cash items. Maker shall furnish to Payee statements of
revenues and expenses for the Mortgaged Property, which statements
shall (x) be in reasonable detail, (y) include a calculation of Net
Annual Income and (z) be satisfactory to Payee in all respects;
(J) Maker shall have paid to Payee all costs and expenses
incurred by Payee or any of its agents (including, without limitation,
reasonable attorney's fees) in connection with the extension of the
Maturity Date; and
(L) During the Extension Period, Maker shall pay interest as
provided herein except that the interest rate shall be the higher of
(a) the LIBOR Based Rate or (b) 3.30% per annum, and as well as
principal as provided herein based on a 25-year amortization schedule;
and all the terms and conditions set forth in this Note shall remain
the same except as otherwise expressly provided in this clause (L) or
elsewhere in this Note, and except that Maker shall have no further
option to extend the Maturity Date.
This Note may not be changed orally but only by an agreement in
writing, signed by an authorized person of the party against whom enforcement of
any waiver, change, modification or discharge is sought. All parties to this
Note, whether Maker, principal, surety, guarantor or endorser, hereby waive
demand, notice and protest. Written notices required to be given hereunder shall
be given as provided in the Mortgage.
Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity, or in bankruptcy, receivership or any other court
proceeding (whether at the trial or appellate level), or should this Note be
placed in the hands of attorneys for collection upon default, Maker agrees to
pay, in addition to the principal, interest and other sums due and payable
hereon, all costs of collecting or attempting to collect this Note, including
reasonable attorneys' fees and expenses, actually incurred by Payee.
8
Anything herein to the contrary notwithstanding, the obligations of
Maker under this Note shall be subject to the limitation that payments of
interest shall not be required to the extent that receipt of any such payment by
Payee would be contrary to provisions of law applicable to Payee limiting the
maximum rate of interest which may be charged or collected by Payee.
MAKER HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES, IN CONNECTION WITH
ANY SUIT, ACTION OR PROCEEDING (INCLUDING ANY CLAIMS AND COUNTERCLAIMS RELATED
THERETO) BROUGHT BY PAYEE ON THIS NOTE, ANY AND EVERY RIGHT IT MAY HAVE TO A
TRIAL BY JURY. NOTHING HEREIN CONTAINED SHALL PREVENT OR PROHIBIT MAKER FROM
INSTITUTING OR MAINTAINING A SEPARATE ACTION AGAINST PAYEE WITH RESPECT TO ANY
ASSERTED CLAIM.
This Note and the rights and obligations of the parties hereunder shall
in all respects be governed by, and construed and enforced in accordance with,
the laws of the State of New York (without giving effect to the State of New
York's principles of conflicts of law). Maker hereby irrevocably submits to the
non-exclusive jurisdiction of any New York State court or Federal court sitting
in New York County, New York over any suit, action or proceeding arising out of
or relating to this Note, and Maker hereby agrees and consents that, in addition
to any methods of service of process provided for under applicable law, all
service of process in any such suit, action or proceeding in any New York State
court or Federal court sitting in New York County, New York may be made by
certified or registered mail, return receipt requested, directed to Maker at the
address indicated below, and service so made shall be complete five (5) days
after the same shall have been so mailed.
Neither Maker nor any Principal of Maker (as defined in the Mortgage)
shall be personally liable for payment of the principal of this Note or interest
thereon, and in the event of failure by Maker to pay any portion of such
principal or interest, Payee will look, with respect to the then outstanding
balance of such principal and interest, solely to the Mortgaged Property and
such other collateral as has been, or hereafter shall be, given to secure
payment of this Note. The foregoing limitation on liability shall not impair or
otherwise affect the validity or enforceability of (a) the debt evidenced by
this Note or of any other obligations evidenced by the Loan Documents or (b) the
liens, security interests, rights and remedies (including, without limitation,
the remedies of foreclosure and/or sale) in favor of, or available to, Payee
with respect to the Mortgaged Property or any other property, security,
collateral and/or assets (including the proceeds thereof) encumbered, pledged or
assigned by the Mortgage or any other security for the Loan. In addition, the
foregoing limitation on liability shall not limit the obligations of Maker or
any Principal of Maker, or be applicable with respect to: (i) liability under
any guaranty(ies) or indemnity(ies) delivered or afforded to Payee; (ii) any
fraud, material misrepresentation or breach of trust; (iii) taxes of any kind
(whether characterized as transfer, gains or other taxes) payable in connection
with the foreclosure sale of the Mortgaged Property, irrespective of who pays
such taxes; (iv) application of any proceeds of the Loan to any purpose other
than as provided in the Loan Documents; (v) the application of any insurance or
9
condemnation proceeds or other funds or payments other than strictly in
accordance with the Loan Documents; (vi) the misapplication of any security
deposits; (vii) rents, sales proceeds, or other sums received after default
under the Loan Documents which are not applied to expenses of operating the
Mortgaged Property or paid to Payee or a duly appointed receiver of the
Mortgaged Property; (viii) any failure to deliver to Payee, after demand
therefor, any agreements relating to the operation, management, leasing, use,
occupancy or construction of the Mortgaged Property; (ix) any intentional
physical waste in respect of the Mortgaged Property; (x) any failure to pay or
discharge any real estate tax, other tax, assessment, fine, penalty or lien
against the Mortgaged Property to the extent revenue from leases of the
Mortgaged Property was available to pay same; (xi) liability to Payee for the
reimbursement to Payee, together with interest as provided in the Loan
Documents, of all sums advanced or expended by Payee after or in respect of any
default under the Loan Documents; (xii) liability as landlord under any lease(s)
relating to the Mortgaged Property which Payee is or becomes obligated for by
virtue of Payee's succeeding to the interests of Maker; (xiii) liability under
any agreement relating to the operation or maintenance of the Mortgaged Property
which Payee is or becomes obligated for by virtue of Payee succeeding to the
interests of Maker; (xiv) liability to pay for the premiums on and keep in full
force and effect insurance in respect of the Mortgaged Property in accordance
with the Loan Documents to the extent revenue from leases of the Mortgaged
Property was available to pay same; or (xv) liability for Hazardous Substances
(as defined in the Mortgage) that may exist upon or be discharged from the
Mortgaged Property. Maker and any Principal of Maker shall in any event be and
shall remain personally liable for each of the matters to which reference is
made in the preceding sentence and Payee may seek, obtain and enforce one or
more money judgments in any appropriate proceeding(s) with respect thereto. The
limitation on personal liability contained in this paragraph shall become
automatically null and void and shall be of no further force or effect, and
Maker and each Principal of Maker shall be and remain personally liable for
payment of the principal of this Note and interest thereon, in the event that
Maker, or anyone acting on behalf of Maker, shall (A) file a petition or answer
seeking any relief of any kind under the bankruptcy laws of the United States or
if an Insolvency Event (as defined in the Mortgage) shall otherwise occur; (B)
assert in writing or in any legal proceedings of any kind that any provisions of
any of the Loan Documents are in whole or in part unenforceable, invalid or not
legally binding; or (C) fail fully to cooperate with Payee or a receiver in
Payee's or such receiver's efforts to collect Rents (as defined in the Mortgage)
directly from tenants after a default under the Loan Documents.
[Remainder of page intentionally
10
IN WITNESS WHEREOF, Maker has executed and delivered this Note on the
day and year first above written.
MAKER:
RD ELMWOOD ASSOCIATES, L.P., a Delaware
limited partnership (as Borrower)
By: Acadia Property Holdings, LLC, its general
partner
By: Acadia Realty Limited Partnership, its sole
member
By: Acadia Realty Trust, a Maryland
real estate investment trust, its
general partner
By
-----------------------------------
Robert Masters
Senior Vice President
Location of Premises: Elmwood Park Shopping Center
58, 80 and 100 Broadway
Elmwood Park, New Jersey
Address of Maker: c/o Acadia Realty Trust
20 Soundview Marketplace
Port Washington, New York 11050
11
ACKNOWLEDGMENTS
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
November, 2002 by ____________________, an authorized signatory of Acadia Realty
Trust, a Maryland real estate investment trust, the general partner of Acadia
Realty Limited Partnership, the sole member of Acadia Property Holdings, LLC
which is the general partner of RD Elmwood Associates, L.P., a Delaware limited
partnership, on behalf of said entities.
________________________________
Notary Public
My commission expires _____________________
12