April 1, 2002
Via United Parcel Service
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The Point Associates, L.P.
c/o Ekstein Rothenberg Corp.
Attn: Milton Ciplet
708 Third Avenue
New York, New York 10017
Project: The Point Shopping Center
Harrisburg, Dauphin County, Pennsylvania
Gentlemen:
Protective Life Insurance Company is pleased to advise you of its
approval of a loan subject to your compliance with the enclosed Permanent Loan
Commitment.
Enclosed are two counterparts of Protective Life Insurance Company's
Permanent Loan Commitment dated April 1, 2002 on the above-referenced project.
The Borrower should execute and return one counterpart to us, unmarked, along
with any unpaid required fee. Any revisions or modifications should be requested
in writing for consideration.
Also, please find enclosed the Form W-9, which must be filled out for
the borrowing entity indicating the taxpayer identification number and returned
with the Commitment.
The enclosed Commitment requires an appraisal, a Phase I environmental
site assessment and, unless the improvements are newly constructed, a property
condition survey. We must pre-approve the firms and/or individuals preparing
these reports. To facilitate the approval process, please have the appropriate
firms fill out and return the enclosed forms (all questions must be answered)
and attach supporting documentation (brochures, insurance accords, resumes).
Once completed and returned, we will advise if approved or not.
Sincerely,
J. Craig Cecil
Second Vice President
Investment Department
JCC/dn
PERMANENT LOAN COMMITMENT
April 1, 2002
Project: The Point Shopping Center
I-83 and Union Deposit Road
Harrisburg, Dauphin County, Pennsylvania
Protective Life Insurance Company ("Lender") agrees to provide secured
first lien financing ("Loan") for the above-referenced Project to the Borrower
(defined below) on the terms and conditions set forth below:
PART I - THE LOAN
1.1. BASIC LOAN TERMS AND DEFINITIONS:
---------------------------------
The following are the basic terms of the loan. Capitalized terms are
definitions for the purposes of this agreement. Such basic terms are
subject to the other conditions of this Commitment and definitive loan
documents.
Borrower: The Point Associates, L.P. having as its general partner The Point Shopping Center, LLC
having as its sole member Cedar Income Fund Partnership, L.P.
Principal(s): Cedar Income Fund, Ltd.
Loan Amount: $21,000,000 ("Ceiling Loan") Interest Rate: 7.625% per annum
$20,000,000 ("Floor Loan")
Amortization: 25 years Monthly Payment: See Section 1.4
(Principal and Interest)
Call Date: 10 years
Maturity Date: 25 years Liability: Nonrecourse (described below)
Project Acreage: 24+/-acres Building Size: 260,867 square feet
Required Parking: 1,210 spaces Minimum Appraised Value: $28,000,000
- ----------------------------------------------------------------------------------------------------------------------
FEES/EXPIRATION DATE
Commitment Fee: $420,000
Site Inspection/Application Fee: $1,500
Acceptance Date: April 11, 2002
Expiration Date Floor Loan: May 30, 2002
Expiration Date Ceiling Loan: May 30, 2004
-1-
1.2. NONRECOURSE LIABILITY:
---------------------
Borrower (if Borrower is a partnership, then also each general partner)
shall have no personal liability for the payment of the principal,
interest, prepayment fee or Premium, if any, provided for in the Loan,
except as herein provided in the following paragraph.
Borrower (and any general partner) and the Principal(s) listed in
Section 1.1 above shall, jointly and severally, absolutely and
unconditionally covenant and agree to pay, indemnify and hold Lender
harmless against any and all damage, loss, liability, costs and
expenses which Lender may suffer or to which Lender may become subject,
plus interest thereon at the After-Maturity Rate, which arise out of or
are based upon:
(a) failure by Borrower or the Principal(s) to perform the
obligations contained in the Loan Documents to prevent waste,
keep the Property free of any hazardous waste as required by
any applicable governmental authority, maintain insurance
coverage, pay over insurance and condemnation proceeds, and
pay ad valorem taxes and assessments with respect to the
Property;
(b) fraud or misrepresentation by Borrower, any general partner or
the Principal(s) to the Lender prior to or during the term of
the Loan;
(c) misappropriation or conversion of any security for this Loan;
(d) collection of rents, issues or profits from the Property in
contravention of the terms and provisions of the Loan
Documents unless the same are applied to the Loan;
(e) the obligation of Borrower or any indemnitor to indemnify
Lender under any environmental indemnification agreement
executed in favor of Lender; and
(f) an act or omission of the Borrower or any Principal resulting
in a termination of or offset/reduction of rent under an
anchor tenant lease without Lender's approval.
1.3. CALL OPTION:
-----------
Notwithstanding the Amortization Term, Lender shall have the continuing
option of accelerating the Loan as of any time after the Call Date. The
Loan shall be due and payable in full 90 days after Lender notifies
Borrower of the exercise of the call option.
1.4. MONTHLY PAYMENT:
---------------
For the funding of the Floor Loan, monthly installments of principal
and interest will be calculated on the basis of a twenty-five (25) year
amortization term and shall be due and payable on the first day of each
month of the loan term. Upon each funding of the Loan, the monthly
payments of principal and interest shall be calculated based upon the
remaining twenty-five (25) year amortization term at the outstanding
principal balance of the Loan.
1.5. LOAN AMOUNT & INTEREST RATE:
---------------------------
The principal amount of the Loan shall be $21,000,000 ("Ceiling Loan").
The Loan shall be funded in two increments with the first funding of
$20,000,000 ("Floor Loan") based upon the leases listed on Exhibit B.
The difference between the Floor Loan and the Ceiling Loan (the
"Holdback Amount") shall be funded no later than twenty-four (24)
months after the funding of the Floor Loan, but only upon the full
satisfaction of the following conditions: (a) credit acceptable to
Lender shall be in occupancy, open for business and paying full rent
without concessions or setoff, as described in Exhibit B-1, (b) the
tenant shall have executed Lender's form Estoppel Certificate of
Landlord and Tenant and form Subordination, Attornment and
Non-Disturbance Agreement as required by Section 2.7, (c) an acceptable
update to the Property Condition Survey, (d) receipt and approval by
Lender of the appraisal update required by Section 2.3 of this
Commitment.
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The Interest Rate on the Floor Loan shall be 7.625%. The Interest Rate
on the Holdback Amount shall be the Lender's market rate for loans of
similar term and maturity at the time of funding of the Holdback
Amount.
If the foregoing conditions are not satisfied and the Holdback Amount
has not been funded within twenty-four (24) months after the funding of
the Floor Loan, the Loan shall be deemed fully funded and any right to
the Holdback Amount shall terminate.
1.6. CONDITIONS TO INCREMENTAL FUNDINGS:
----------------------------------
As a condition to funding the Holdback Amount, Lender requires the
following: (i) there shall be no default under the existing loan
documents; (ii) the requirements listed in Section 1.5, 2nd paragraph,
shall be completely satisfied; (iii) an updated appraisal as required
in Section 2.3; (iv) an as-built survey as required in Section 2.8
showing the reconfigured space; (v) an insurance policy reflecting
increased values on the property; (vi) an updated property condition
survey; and (vii) proof of completion of all regulatory compliance, as
Lender may require.
1.7. PREPAYMENT/DEFAULT PREMIUM:
--------------------------
(a) Voluntary prepayment. The Loan may be prepaid in full (but never in
part) at any time during the Loan term, upon 90 days prior written
notice to Lender and payment of a prepayment premium equal to the
greater of (i) one percent (1%) of the then unpaid principal balance of
the loan; or (ii) a Yield Maintenance Premium based on the formula
described below.
(b) Default. The promissory note shall provide, in addition to other
remedies, that if the Loan is accelerated due to Borrower's default,
including attempted voluntary prepayment during a closed period, if
any, Borrower must pay in addition to all other amounts due, a premium
equal to the greater of (i) one percent (1)% of the then unpaid
principal balance of the Loan; or (ii) a Yield Maintenance Premium
based on the formula described below.
The Yield Maintenance Premium is an amount calculated as follows:
(i) subtract from the Interest Rate then in effect under the
Loan, the annualized yield on a United States Treasury Bill,
Note or Bond with a maturity date which occurs closest to the
Call Date of the Loan, as such yield ("Treasury Rate") is
reported in The Wall Street Journal five (5) business days
preceding the date of prepayment or default ("Rate
Differential");
(ii) multiply the Rate Differential by the principal balance
of the Loan as of the date of prepayment or default, as
applicable, and divide the product thereof by 12 ("Monthly
Interest Differential");
(iii) using one-twelfth of the Treasury Rate, discount to
present value the right to receive the Monthly Interest
Differential each month between the date of prepayment or
default, as applicable, and the Call Date of the Loan to
determine the Yield Maintenance Premium.
If such prepayment or default occurs on or after the Call Date of the
Loan, there shall be no premium under this paragraph.
1.8. LATE CHARGE:
-----------
The note will contain a provision for an additional 4% after maturity
interest rate and a 4% late charge for payments received after the 10th
of the month in which due (unless state law requires a longer period
prior to imposing a late charge).
-3-
1.9. DUE ON SALE/TRANSFER/ENCUMBRANCE:
--------------------------------
The first lien security instrument ("mortgage") which secures the Loan
shall contain a due-on-sale/transfer/encumbrance provision which
prohibits the Borrower and its Principals from selling all or any
interest in the Project or encumbering the Project with any secondary
liens without Lender's prior written consent. This restriction shall
also apply to a transfer of beneficial interest in a corporate,
partnership or joint venture Borrower.
However, the Loan documents will contain exceptions to the
due-on-sale/transfer/encumbrance provision in language acceptable to
Lender for the following matters, to be applicable provided the Loan is
not then in default and no event has occurred which, with the passage
of time, could lead to a default:
(a) Transfers by sale, gift, inter vivos transfer in trust or
devise of limited partnership or membership interests in the
Borrower or up to 75% interest of the entire Project by
Borrower, so long as the Principal(s) retain control of the
Borrower or its corporate general partner and there is no
material negative change in the financial condition of the
Principal(s).
Any transfer permitted by this paragraph shall not relieve the Borrower
or the Principals from their obligations under the Loan documents and
any guaranty or environmental indemnity.
(b) A sale of the Project by the Borrower and assumption of the
Loan by the purchaser, so long as:
(1) At least 30 days prior to the proposed transfer, Borrower
must provide Lender with notice of and detailed explanation of
the proposed transaction and such financial information and
other documentation regarding the prospective purchaser as
Lender shall request;
(2) Lender, in its sole discretion, shall have approved the
prospective purchaser to assume the Loan;
(3) Borrower shall have provided Lender with documentation
acceptable to Lender that the Project is producing and will
continue to produce annual net operating income equal to at
least 125% of the total annual debt service on the Loan;
(4) Lender shall have approved the management agreement to be
executed by the proposed purchaser;
(5) Lender is paid an assumption fee of one percent (1%) of
the loan amount (hereinafter, the "Assumption Fee") at the
time such assumption is approved or closed, at Lender's
option.
(6) The purchaser executes Lender's assumption documents by
which the purchaser assumes the obligations of the Loan
documents. Further, the purchaser will execute an
environmental indemnity agreement and such other documents as
Lender shall require to accomplish the assumption of the Loan.
Nothing herein or in any assumption document shall be construed to
require Lender to approve any proposed purchaser or to release Borrower
from any obligations under the Loan documents.
1.10. ESCROW:
------
The mortgage shall also contain an escrow provision which requires the
Borrower to pay deposits with each installment of principal and
interest to pay the annual real estate taxes and insurance premiums
when due plus up to two (2) months' additional deposits.
-4-
PART 2 - THE SECURITY
2.1. LAND/IMPROVEMENTS/PARKING:
-------------------------
The Loan will be secured by a first mortgage lien on the Project,
outlined in red on Exhibit A attached hereto, consisting of the Project
Acreage and Building Size of the buildings located on the property. The
Property shall have such easements, rights-of-way and other privileges
as Lender considers necessary or desirable and must contain the
Required Parking listed in Section 1.1 above or the number of parking
spaces required by the applicable zoning code or anchor lease(s), if
greater.
2.2. CROSS EASEMENT AGREEMENT:
------------------------
If the land and improvements that will secure this loan are part of a
larger commercial development, the Project must be covered by a
declaration of easements containing terms and provisions acceptable to
Lender, including without limitation easements for ingress, egress,
parking, utilities and storm water drainage and restricting the use of
adjacent properties as required by the anchor tenants listed on Exhibit
B.
2.3. APPRAISAL:
---------
As a condition to funding the Loan, the Lender must be furnished a
Complete, Self-Contained Appraisal Report which includes the following
supplemental requirements of Lender.
a.) Three Approaches to Value
1.) Income Approach with supporting market income and
expense data with analyses and adjustments and
existing lease analyses;
2.) Sales Comparison Approach with the supporting
comparable sales data with analyses and adjustments;
3.) Cost Approach with Land Value and Building
Replacement Costs
b.) Photographs of the Following
1.) Subject Property
2.) Adjoining Properties
3.) Street Views
c.) Neighborhood Analyses, Site Plans, and a copy of Survey
The effective date of the value conclusion shall not be later than the
date of loan closing. If the value of the Project as completed and
leased is a future value, that is, predicated on certain conditions
which shall occur in the future, (for example, completion of
construction, lease-up, stabilization or economic considerations), then
when such conditions are met and prior to any funding, Borrower must
furnish to Lender either a new Complete, Self-Contained Report
supplemented as required above, or a Limited or Restricted Use
Appraisal Report which updates the original appraisal. The update or
the new appraisal report must reflect whether or not: a) the conditions
upon which the value was predicated have been fulfilled; b) there have
been no significant changes in the market and c) the appraiser's value
conclusions for each of the three approaches to value have changed. Any
Limited or Restricted Appraisal Report must rely on the analyses
contained in the original report and must reflect any deviations of the
final project configuration, market or relevant information from the
assumptions in the original appraisal together with any resulting
effect on the value conclusion.
The appraisal must be acceptable to Lender in form and content in all
respects. The value shall not be less than the Minimum Appraised Value
listed in Section 1.1. If the appraised value is less than the Minimum
Appraised Value or the conclusions or methodology of the appraisal are
otherwise unacceptable to Lender, then Lender reserves the right to
either terminate the Commitment or adjust the Loan Amount or other loan
terms to a level acceptable to Lender.
The appraiser must have an MAI designation and must be approved by
Lender in advance. All appraisals must either be addressed to Lender
and one of its officers or be accompanied by a letter from the
appraiser authorizing the Lender to rely on the appraisal and its value
conclusions.
-5-
2.4. PROJECT INSPECTION:
------------------
As a condition to this Commitment becoming a binding contract, Lender
shall have the right to inspect and approve the Project location and
construction quality.
2.5. LEASES:
------
As a condition to funding, the leases listed on Exhibit B shall be in
full force and effect with the tenants in occupancy, open for business
and paying full rent without concession or setoff. The terms and
provisions of all leases shall be acceptable to Lender and shall
include, without limitation, the lease term, square footage, minimum
annual rent and expense payments listed on Exhibit B. The originals or
certified copies by the Borrower of all leases and a certified rent
roll must be furnished to Lender.
Borrower and any guarantor represent that each lease is bona-fide and
arms-length and that neither Borrower or guarantor has any ownership
interest (beneficial or otherwise) in any tenant nor control over any
tenant ("control" meaning no contracted right to influence the business
operations of tenant other than as specified in the leases presented to
Lender) nor any lending or other relationship with any tenant except as
specified in the leases presented to Lender.
Any space which is unoccupied on the date of funding must be completed
in all respects, except for floor and wall coverings. The vacant space
of 22,600 square feet, referred to as the `expanded Eckerd's space'
need not be finished for the funding of the Floor Loan.
2.6. NO COTENANCY CLAUSES IN LEASES:
-------------------------------
No leases listed on Exhibit B-Attachment shall contain any cotenancy
clause permitting the tenant to terminate the lease, reduce rent or
otherwise abate any payments on account of any change in the occupancy
of any other tenant, whether on or off the mortgaged premises. In the
event any tenant ceases doing business for any reason, all leases on
Exhibit B-Attachment shall remain in full force and effect with the
tenants paying full rent and the tenants' pro rata share of taxes,
insurance and common area maintenance costs for the full term of the
leases.
2.7. ASSIGNMENT/ESTOPPEL/SUBORDINATION:
---------------------------------
All leases must be assigned to Lender as additional security for the
Loan. Each tenant must execute Lender's form Estoppel Certificate of
Landlord and Tenant and form Subordination, Attornment and
Non-Disturbance Agreement.
2.8. AS-BUILT SURVEY:
---------------
As a condition to funding, Lender shall be furnished an acceptable
"as-built" survey of the Project in accordance with the Survey
Specifications attached as Exhibit C.
2.9. UTILITIES:
Prior to funding, Lender shall be furnished satisfactory evidence of
the availability of all utilities required for full use of the Project.
2.10. REGULATORY COMPLIANCE:
---------------------
As a condition to funding, Lender must be furnished satisfactory
evidence that the Project complies with all applicable laws,
ordinances, rules and regulations pertaining to zoning, building codes,
safety, health and environmental matters and has been approved by all
governmental agencies having jurisdiction over the Project and its
compliance.
2.11. PLANS/SPECIFICATIONS/SOIL TEST:
------------------------------
As a condition to funding, Lender must be furnished for review and
approval a set of the final Project plans and specifications under seal
and the pre-construction soil test report.
-6-
2.12. PROPERTY, LIABILITY, RENT AND FLOOD INSURANCE:
---------------------------------------------
As a condition to funding, Borrower must furnish an all-risk or special
risk property insurance policy with a replacement cost endorsement or
replacement cost valuation basis section with no more than a $10,000.00
deductible and a comprehensive general liability policy in amounts and
with terms acceptable to Lender. The property policy must provide a
property limit equal to: (a) the cost approach to valuation as provided
by the appraisal as defined in Part II of this Commitment less land and
approved soft costs, or (b) the outstanding balance of the note,
whichever is less. If the property policy provides a limit equal to
item (b) above, the policy must provide an agreed amount endorsement.
The proceeds of all property insurance policies must be payable to
Lender under a standard mortgagee clause.
If the property is located in a flood hazard Zone "A" or in any other
location in which Lender requires flood coverage, flood insurance in an
amount acceptable to Lender must also be provided subject to Lender's
right to approve the survey. If the property is located in earthquake
zones "3" or "4" as depicted by the Seismic Zone Map of the United
States, Earthquake Insurance in an amount acceptable to Lender must be
provided. Loss of Rents Insurance providing one years coverage must
also be provided. The Lender will also be named as a Loss payee on the
rents coverage and as an additional insured on the comprehensive
general liability policy.
The casualty insurance company must meet the following basic
requirements:
1. Have a minimum rating of "A+" according to Best's Insurance
Reports - Property/Casualty Edition;
2. Have a claims paying rating of at least single "A" by two
approved rating agencies;
3. Must be a stock company or a non-assessable mutual company
located in a country acceptable to Lender; and
4. Must be licensed in the state where the property is located.
In addition, Lender will not allow any carrier or self-insurer to
provide a policy limit in excess of 10% of its policyholders surplus on
any one risk. A tenant will be allowed to self-insure through a wholly
owned subsidiary as long as the tenant's tangible net worth exceeds
$100,000,000.00.
The policy and carrier requirements outlined in this section must be
met on any policy submitted prior to closing and any renewal thereof.
2.13. PROPERTY CONDITION SURVEY:
-------------------------
As a condition to funding, Lender must be furnished a Property
Condition Survey ("PCS") conducted by a licensed engineer. The PCS must
cover the following areas: building code, safety and ADA compliance;
evaluation of structural, roof, HVAC, mechanical, electrical and
plumbing systems; site improvements; sewer and drainage systems. The
PCS must contain the (a) engineer's estimate of the cost of curing any
immediate code or safety violations or immediate repairs necessary for
the integrity and operation of the Project and (b) a grid containing
the estimated remaining useful life of major components of the Project
and the cost of replacing/repairing same.
The PCS report shall be subject to Lender's review and approval.
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2.14. ENVIRONMENTAL SITE ASSESSMENT:
-----------------------------
As a condition to funding, Lender must be furnished an acceptable Phase
1 environmental site assessment report performed by an environmental
engineering firm approved by Lender. This report should be addressed to
Lender and updated to within 30 days prior to closing. Borrower shall
also provide a reliance letter from the environmental firm addressed to
Lender which acknowledges that Lender will rely on any prior reports
cited in the final Phase 1 report. The Phase I report must state
whether or not an asbestos survey of the Project is recommended based
on the applicable ASTM standard. If recommended or otherwise required
by Lender, an acceptable asbestos survey report addressed to Lender
must be furnished as a condition to closing. The Lender must be
furnished complete copies of any existing Phase 2 or Phase 3 reports
concerning the property.
2.15. ENVIRONMENTAL INDEMNITY:
-----------------------
As a condition to funding, Borrower and each Principal shall execute
Lender's standard form Environmental Indemnity Agreement.
PART 3 - EXPIRATION/ACCEPTANCE AND COMMITMENT FEES
3.1. COMMITMENT FEE AND ACCEPTANCE OF COMMITMENT:
-------------------------------------------
The Commitment Fee listed in Section 1.1 and an executed copy of the
Commitment, without modification, must be received by Lender on or
before the Acceptance Date listed in Section 1.1, otherwise this
Commitment is null and void. Payment of the Commitment Fee and written
acceptance of all terms and conditions of this Commitment without
modification are conditions precedent to this Commitment becoming a
binding contract. Lender acknowledges receipt of $413,500 of the
Commitment Fee.
In the event Borrower accepts the Commitment subject to counter-offers
or proposals, Lender shall have the right to deposit the Commitment Fee
in its bank account, to commingle it with other funds as Lender
chooses, and to earn interest thereon pending Lender's acceptance or
rejection of such counter-offers or proposals. Such deposit of the
Commitment Fee shall not be deemed an acceptance by Lender of any such
counter-offer or proposal. In the event the Commitment is not finally
accepted by the parties, the Commitment Fee, less any expenses incurred
by Lender, shall be refunded to the Borrower without interest.
The Commitment Fee will be held by Lender without interest and will be
held until after the Loan is funded by Lender and all documents and
materials used in structuring the Loan such as the recorded documents,
title policy and any post-closing items are received, reviewed and
approved by Lender, at which time the entire amount will be refunded.
Borrower agrees that it will not seek other financing for the Project,
delay in the submission of required items for Lender's approval or
otherwise frustrate the closing of the Loan. If for any reason the Loan
is not funded as required in this Commitment, Lender may, at its
option, retain for its own account the entire Commitment Fee; however,
the option to receive and keep the Commitment Fee is not exclusive of,
but in addition to all other rights and remedies Lender may have for
Borrower's failure to comply with this Commitment. Borrower
acknowledges that Lender may incur substantial damages, including loss
of anticipated yield (calculated as if the loan had closed on the
Expiration Date) in the event of Borrower's breach of this contract and
that Borrower shall be liable for these damages plus Lender's
out-of-pocket expenses, including but not limited to Lender's
attorney's fees.
As a limited exception to the foregoing, if (i) Borrower timely submits
complete information with respect to the following required due
diligence items; (ii) Lender disapproves the submitted item; (iii)
Borrower is diligent in obtaining and submitting additional
documentation required by Lender to clarify, supplement or amplify the
disapproved item; and (iv) despite Borrower's diligent efforts to
satisfy Lender's concerns, Lender disapproves same and thereby the
conditions precedent to funding under this Commitment cannot be
satisfied, then Lender will refund Commitment Fee (but not any other
fees required by this commitment), less any out-of-pocket expenses
(including legal fees) incurred by Lender. The due diligence items
referred to in this paragraph are: appraisal, leases on Exhibit B,
environmental site assessment, plans and specifications, evidence of
regulatory compliance, structural inspection, matters of survey, and
title exceptions.
-8-
3.2. SITE INSPECTION/APPLICATION FEE:
-------------------------------
Borrower shall pay the non-refundable Site Inspection/Application Fee
listed in Section 1.1 due at the acceptance of this Commitment. Lender
acknowledges receipt of $1,500 for the Site Fee.
3.3. EXPIRATION DATE AND FUNDING DATE:
--------------------------------
This Commitment, unless sooner terminated, expires on the Expiration
Date provided in Section 1.1, and thereafter shall be of no further
force and effect and all obligations of Lender to perform hereunder
shall terminate. Lender has the option of funding the Loan at any time
between the date that all the terms of this Commitment are satisfied
and the Expiration Date.
The Commitment will be automatically extended for a period of fifteen
(15) days beyond the Expiration Date upon the payment to Lender of a
per diem extension fee based upon the product of the difference between
the Interest Rate of the Loan and the rate paid on 30 day commercial
paper by major corporations on the date five (5) business days prior to
the Expiration Date as published in The Wall Street Journal multiplied
by the amount of the Loan. This fee will be charged from and including
the Expiration Date through the day before closing, and will be payable
in advance on the date said extension period begins or at closing at
Lender's option. Lender may grant additional extensions upon such terms
and conditions as Lender may require. Upon expiration of this
Commitment due to Borrower's failure, refusal or unexcused delay in
closing, Lender shall be entitled to damages as provided in Section 3.1
above.
3.4. CLOSING DOCUMENTATION:
---------------------
All closing documentation required by the Commitment must be received
by Lender at least fifteen (15) days before Closing, in order to allow
sufficient time for review, negotiation, modification and
supplementation, if necessary, of such documentation. Subject to
satisfaction of all Conditions of the Commitment, Lender shall not be
required to fund the Loan earlier than thirty (30) days prior to the
expiration of the Commitment.
PART 4 - FURTHER CONDITIONS
Borrower shall provide Lender with the following, in a form
satisfactory to Lender, as a condition to funding the Loan:
4.1. LOAN DOCUMENTATION:
------------------
The Loan shall be structured using such documents and materials as
Lender shall require, including, but not limited to the promissory
note, mortgage, deed of trust or deed to secure debt, security
agreement, UCC financing statements, environmental indemnity agreement,
assignment of rents and leases, borrower's affidavit, subordination of
management/leasing fees, estoppel certificate of landlord and tenant,
and subordination, attornment and non-disturbance agreement. All loan
documents shall contain such terms as are acceptable to Lender.
4.2. ATTORNEYS AND LEGAL OPINIONS:
----------------------------
As a condition to funding, Lender must be furnished an acceptable legal
opinion covering the legality of the Loan transaction, the
enforceability of the Loan Documents and the compliance of the Property
with applicable laws, and providing, without limitation, that all
documents used in structuring the Loan are valid, binding and
enforceable in accordance with their terms. The opinion must
specifically provide that the Loan as structured does not violate any
usury statutes. In addition, Lender reserves the right at any time to
retain counsel at the Borrower's expense to represent Lender on any
matter pertaining to the Loan.
4.3. TITLE INSURANCE:
---------------
As a condition to funding, Lender shall be furnished an acceptable ALTA
Loan Policy issued by an approved national title insurer, insuring the
Loan as a valid first lien on the security without exception other than
taxes not yet due and payable and such other exceptions as Lender shall
approve. The title policy shall contain such endorsements and
affirmative coverage as required by Lender, including but not limited
to, a general comprehensive endorsement. A title insurance commitment
with documentation for all exceptions must be furnished Lender within
30 days after acceptance of this Commitment. The Loan must be closed
under an insured closing agreement with the title insurer.
-9-
4.4. BORROWER'S AUTHORITY:
--------------------
If the Borrower is a corporation, partnership or fiduciary, Lender must
be furnished copies (reflecting any recordation information) of the
Borrower's organizational documentation and satisfactory evidence of
the authority of Borrower and persons executing documents on its behalf
to enter into the Loan and pledge the Project as security therefor.
PART 5 - GENERAL PROVISIONS
5.1. CREDITWORTHINESS:
----------------
By accepting this Commitment, Borrower and its Principals authorize
lender to investigate their credit. Further, as a condition to funding,
Borrower shall provide Lender with a current credit report on Borrower
and each of its Principals. Lender's approval of Borrower's and its
Principals' creditworthiness is a condition precedent to this
Commitment becoming a binding contract.
5.2. ANNUAL OPERATING STATEMENT:
--------------------------
Within ninety days after the end of each calendar year, Lender must be
furnished an acceptable operating statement for the Project setting
forth all income and expenses of the Project for the preceding year.
Lender shall have the right to require that the operating statement be
prepared by an approved certified public accountant.
Any borrower or guarantor must furnish to Lender an annual statement
under original signature within 90 days after the calendar year end or
as required by the Securities and Exchange Commission.
5.3. MANAGEMENT/LEASING PLAN:
-----------------------
The Project must at all times be managed and leased by an agent
acceptable to Lender. Any management, leasing or similar fee must be
subordinated to the Loan. Lender approves Brentway Management LLC as
manager of the Project.
5.4. BORROWER TO PAY ALL EXPENSES:
----------------------------
All expenses in connection with the Loan including, but not limited to,
one point (1%) of the Ceiling Loan Amount to Ekstein-Rothenberg for
services rendered for arranging the Loan with Protective Life,
attorneys fees, recording fees, surveys, title insurance, and other
costs associated with closing the Loan shall be paid by the Borrower.
5.5. ASSIGNMENT OF COMMITMENT OR LOAN:
--------------------------------
This Commitment cannot be assigned or transferred by Borrower without
Lender's prior written approval. Lender reserves the right to assign
this Commitment to an entity controlled by or under common control with
Lender for funding. Once the Loan is closed, Lender reserves the right
to assign the Loan Documents to an assignee of Lender's choice or grant
participations in the Loan.
5.6. TERMINATION OF THE COMMITMENT:
------------------------------
Lender's obligation to perform under this Commitment shall, at Lender's
option, terminate and become null and void upon the occurrence of any
of the following events:
Failure of the Borrower to accept this Commitment by the required date.
Default by Borrower in the performance of any requirement or obligation
of the Commitment.
The disapproval by Lender of any document, matter or fact requiring
Lender's approval.
-10-
Expiration of the Commitment pursuant to the Section captioned
"EXPIRATION DATE".
Should the Borrower, any guarantor or any tenant or lease guarantor
required for funding be the subject of any bankruptcy, reorganization
or insolvency proceeding, cease doing business (if a tenant) at the
Project (or announce an intention to cease business at the Project),
die (if a natural person), or suffer a material change in financial
conditions or prospects.
Default in the performance of any requirement or obligation in any
instrument evidencing or securing the Loan or incidental thereto.
Material damage to or destruction of the Project, in whole or in part,
whether or not covered by insurance.
5.7. SURVIVAL:
--------
This Commitment and all terms and provisions hereof shall survive the
closing of the Loan and shall not be merged into any of the Loan
documents; provided, however, in the event of a conflict between the
terms and provisions of this Commitment and the terms and provisions of
the Loan documents, the Loan documents shall control.
5.8. ENTIRE AGREEMENT:
----------------
This Commitment is the entire agreement between the parties and can
only be changed by a written modification prepared by Lender signed by
all parties. If there is any difference between the application for
this Commitment and the terms hereof, the terms of this Commitment
shall control in all instances.
5.9. COMPLIANCE WITH CONDITIONS:
--------------------------
As a condition to funding, Borrower shall satisfy in full, in form and
substance acceptable to Lender, all requirements of this Commitment and
shall execute all loan documents and such other instruments as Lender
shall require. Any decision, approval or consent reserved to or
required from Lender hereunder may be made or denied in Lender's sole
discretion, based on Lender's underwriting criteria and judgment
applied to this Loan, and whether or not deemed reasonable by Borrower.
PROTECTIVE LIFE INSURANCE COMPANY
By: _________________________________
Carl S. Thigpen
Senior Vice President
Investment Department
CST/dn
-11-
The undersigned accepts this Commitment and all its terms, conditions and
requirements. The undersigned acknowledges that this Commitment has been
extended by Lender in reliance upon information furnished by the undersigned
which is hereby certified to be true and correct. In the event of a material
misrepresentation or omission regarding this information, Lender shall have the
right to terminate this Commitment.
Dated this 3rd day of April, 2002.
"BORROWER"
THE POINT ASSOCIATES, L.P. TAX ID#: 23-2537467
----------
By its general partner:
The Point Shopping Center, LLC Tax Id#: 11-3551567
----------
By its sole member:
Cedar Income Fund Partnership, L.P. Tax Id#: 11-3440066
----------
By: Cedar Income Fund, Ltd., GP
By: /s/ Leo S. Ullman
------------------------------
Its: President
"PRINCIPAL(S)"
Cedar Income Fund, Ltd. Tax Id#: 42-1241468
----------
By: /s/ Leo S. Ullman
------------------------------
Its: President
Borrower's Address:
44 South Bayles Avenue, Suite 304
- ---------------------------------
Port Washington, New York 11050
- ---------------------------------
Phone: (516) 767-6492
- ---------------------------------
Fax: (516) 767-6497
- ---------------------------------
-12-
------------------
EXHIBIT A
------------------
Exhibit A hereto is a site map and is therefore not keyable.
------------------
EXHIBIT B
Attachment
------------------
Leased Expiration Gross Minimum
Tenant Area Lease Term Annual Rent Expenses
- ------ ------- ---------- ---------------- ---------
Anchors
Giant Food Stores, Inc. (1) 55,000 20 Years $935,000 (2)
Staples, Inc. 24,000 12 Years $264,000 (2)
Citizen Financial Group, Inc. 3,054 5 Years $ 40,102 (2)
Waypoint Bank 3,200 20 Years $ 30,000 (2)
Cokesbury Bookstore 5,200 10 Years $ 69,792 (2)
- -------------------------------------------------------------------------------------------------------------------------
NOTES:
1. The terms and conditions of the lease shall be unconditionally guaranteed by
Koninklijke Ahold, n.v.
2. In addition to the gross minimum annual rent, the tenant shall pay its own
utilities and interior maintenance costs; its pro rata share of taxes,
insurance and common area maintenance costs attributable to the Project.
------------------
EXHIBIT C
------------------
SURVEY SPECIFICATIONS
(Minimum requirements, not intended to lower State or Local law or custom.)
Field Technical Specifications.
- ------------------------------
1. The survey will be a field-run, ALTA/ACSM Land Title Survey, based upon the
property description furnished in the source of title, performed by or
under the direct supervision of a registered Professional Land Surveyor
currently licensed in the State in which the property is located, and
during which all property boundary corners are either occupied or sideshot.
2. All distances will be measured and reported to the nearest 0.01 feet, and
all angles will be measured and reported to the nearest 20 seconds of arc.
3. Closure must meet or exceed 1:10,000. The area will be reported to the
nearest 0.01 acre. The bearing of each course will be shown sequentially on
the survey plat, with the basis of bearings (e.g., true, magnetic or
arbitrary) stated in the marginal notes.
4. All corner points will be marked on the ground by permanent ferrous metal
monuments with ties to any appropriate witness and/or reference monuments
shown on the survey plat along with a detailed description of the true
corner marker.
5. All buildings located on the subject property will be dimensioned and
located relative to a minimum of the closest two (2) adjoining property
boundaries by perpendicular off-sets. Type of construction and number of
stories will be noted and shown.
6. All additional improvements (e.g., sidewalks, drives, paved parking areas,
medians, open spaces, etc.) will be dimensioned and located in a
graphically correct position and orientation. Individual parking spaces as
striped on the ground will be shown and counted.
7. All utilities visible on the surface will be located, shown and described.
Additionally, underground sanitary sewer systems and underground storm
sewer systems will be traced through the property and located in a
graphically correct position.
8. The existence or nonexistence of any encroachments onto the property by
improvements on adjoining lands, and/or any encroachments by improvements
on the surveyed property onto any adjoining lands must be determined,
dimensioned and shown on the survey plat.
9. The name, address and recordation document information of all adjoining
owners (including across streets, alleys or highways) as they appear on
current tax assessment rolls will be shown on the survey plat in proper
position.
10. The finished floor elevation of the lowest floor of all buildings on the
surveyed property will be determined on NGVD and shown on the survey plat
if the surveyed property is located in or partially in a designated Flood
Hazard Area.
PLAT TECHNICAL SPECIFICATIONS
- -----------------------------
1. All surveys will be drawn in ink, on a base plat (preferred size 24 inches
vertically and 36 inches horizontally). A lined border will be constructed.
No portion of the survey or marginal information will be drawn outside of
the described border.
2. Survey information will be located on the base plat so that the right
portion of the plat contains the following items in order from top to
bottom:
A. North arrow, graphic scale, legend and marginal notes.
B. Property description, including appurtenant easements.
C. Marginal Notes
D. Surveyors Certification (see item 11 below).
E. Title Block.
3. The remainder of the base plat will contain the survey drawing, oriented
such that North is "up the page", and at a scale of 1"=30 ft. if
practicable but the paper size or scale may be adjusted to enhance
readability. Match lines should be avoided.
4. Property boundaries will be drawn with a heavy line. The property boundary
will be dimensioned with the length inside of and bearing outside of each
line parallel with the same. Curved portions of the property boundary will
contain arc and chord distances, as well as a minimum of two (2) of the
curve parameters (e.g., Delta and Radius).
5. The various monuments marking all property corners will be described in
detail. If a monument could not be placed at a true corner, appropriate
witness and/or reference corners will be set and dimensioned, along with a
notation of the reason that the true corner is not monumented. The point of
beginning of the property description will be so labeled on the survey
drawing, along with any and all appropriate ties to external controlling
monuments.
6. Building outlines will be drawn and will show the exterior faces of all
structures. Dimensions will be completed and allow for "closure" of the
building. Interior demising walls will be shown between lease units in a
graphically correct position. The building will be highlighted by use of
pattern film. The distances from building corners to closest exterior
property boundary lines will be shown utilizing perpendicular off-set and
base distance method only.
7. All additional improvements such as sidewalks, drives, paved parking areas,
open spaces and medians will be shown. Appropriate highlighting of these
features is optional, but highly recommended unless undue confusion is
resulting. Sufficient detail will be shown in the vicinity of property
boundaries to allow a definitive judgment of encroachment conditions.
8. All record and implied easements will be shown and will be detailed
sufficiently to allow appropriate evaluation. Underground sanitary sewer
lines will be traced through the property by locating all manholes.
Underground storm sewer lines will be traced through the property by
locating appropriate governing surface structures and will be shown
similarly. Overhead power, telephone and cable lines will be shown by
locating poles, towers or the like which govern the location of the same on
or immediately adjacent to the property.
9. The name, pavement width, right-of-way width and governing jurisdiction for
all public roads, streets, boulevards, alleys, ways or easements adjacent
to, located on, or serving the surveyed property will be shown. Recordation
information for dedications will be shown, if known, or if right-of-way
exists by prescription, said fact will be so stated.
10. Marginal information located below the North arrow will contain the
following minimum information:
A. Source of title of current property owner.
B. Basis of bearings.
C. Area of property.
D. Area of building.
E. Current zoning classification of property, including minimum setback
distances required by same. If property is outside of any zoning
jurisdiction, this fact must be so stated.
F. Number of parking spaces required by zoning code and actual number
provided.
G. Street address(es) of property.
H. Federal Insurance Administration Community Panel Number of Flood
Hazard Boundary Map, if published.
11. The surveyor's certification will read exactly as follows:
-------
STATE OF )
)
COUNTY OF )
TO: (Insert name of Lender)
--------------------------
[Title Insurer]
[Owner]
I, _____________________, a registered Professional Land Surveyor in
the State of ______________ of the firm of "(insert firm name, city, state
and AC-telephone number)", hereby certify that the premises shown hereon is
a true and correct plat of the property described hereon; that the
buildings thereon are located with respect to property boundaries as shown;
that there are no electric or telephone wires (excluding those which serve
the premises only) or structures or supports therefor on or over said
premises except as shown; that all Rights-of-way, Easements or joint drives
over or across said premises visible on the surface are shown; that the
premises surveyed do not encroach on the adjoining property and that the
adjoining property does not encroach on the premises surveyed except as
shown; I further certify that I have consulted Federal Insurance
Administration Flood Hazard Boundary Maps as are currently available and
have found that the subject property DOES/DOES NOT (indicate which) lie in
a Special Flood Hazard Area.
WITNESS my hand this the _____________ day of ________________, 20 .
Surveyor's Name, P.L.S.
(State) Reg. No. (# )
12. The title block will be located in the extreme lower right hand portion of
the plat and will allow the surveyor to appropriately name the survey and
include any information normally disclosed (e.g. Job Number, File Number,
Field Book Number, etc.). All revision dates must be shown.
13. The registration seal of the surveyor and a live signature will be placed
on all furnished copies of the survey plat.
------------------
EXHIBIT D
------------------
The Point Associates, L.P.
c/o Ekstein Rothenberg Corp.
Attn: Milton Ciplet
708 Third Avenue
New York, NY 10017
Project: The Point Shopping Center
I-83 and Union Deposit Road
Harrisburgh, Dauphin County, PA
Gentlemen:
At your request, Protective Life Insurance Company ("Lender") agrees to waive
the escrow deposits for taxes and insurance which will be required under the
Mortgage, Deed of Trust or Deed to Secure Debt and Security Agreement ("Security
Instrument") which will secure the above-referenced loan, providing that all the
following conditions are met (the "Conditions"): no default exists under any
instrument securing said loan, the ownership and management of the subject
property remains the same, insurance premiums are paid when due and taxes are
paid when due and Lender is furnished with satisfactory evidence of said
payment. Notwithstanding the previous sentence, Lender reserves the right to
revoke this waiver if any one or more of the Conditions are not met, or at such
time as Lender, in its sole discretion, deems it necessary to protect its
security.
Sincerely,
Charles M. Prior
Vice President
Investment Department
CMP/dn
------------------
EXHIBIT B-1
------------------
Leased Expiration Gross Minimum
Tenant Area Lease Term Annual Rent Expenses
- ------ ------- ---------- ---------------- ---------
Anchors
New Credit 22,600 10 Years $316,400 (1)
NOTES:
1. In addition to the gross minimum annual rent, the tenant shall pay its own
utilities and interior maintenance costs; its pro rata share of taxes,
insurance and common area maintenance costs attributable to the Project.
(footnote lease reimbursement stipulations)