MORTGAGE NOTE
$12,000,000.00 As of September 27, 1996
Pittsburgh, Pennsylvania
The undersigned, MARK TWELVE ASSOCIATES, L.P., a
Pennsylvania limited partnership, having a principal office c/o
Mark Centers Trust, 000 Xxxxx Xxxxxx, X.X. Box 1679, Kingston,
Pennsylvania (the "Borrower"), promises to pay to the order of
FIRST WESTERN BANK, NATIONAL ASSOCIATION (the "Lender"), a
national banking association, at its principal office at 000 X.
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx 00000 or at such
other place as the holder hereof may from time to time designate
in writing, the principal sum of TWELVE MILLION DOLLARS
($12,000,000), lawful money of the United States of America, or
so much thereof as shall have been advanced under that certain
Construction Loan Agreement (the "Loan Agreement"), of even date
herewith, between Borrower and Lender; limited, however, to such
lesser amounts as set forth in Section 5.2 of the Loan Agreement.
Xxxxxxxx agrees to pay interest from the date of the initial
advance on the unpaid balance of the principal sum hereof in like
money at the rates per annum hereinafter set forth, payable as
follows:
A. The rate of interest applicable to this Note shall be a
rate per annum (based on a year of 360 days and actual days
elapsed) equal to the following for the following time periods:
(i) from the date of the initial advance hereunder (the
"Closing Date"), throughout the entire Construction Period (as
hereinafter defined) (and, if Borrower shall not elect to fix the
rate of interest pursuant to Paragraph A (ii)-(iv) below,
throughout the entire Permanent Period (as hereinafter defined)),
a rate of interest per annum equal to one percent (1%) above the
rate per annum announced by Xxxxxx at its principal office in New
Castle, Pennsylvania as its "prime rate" (the "Prime Rate"), such
rate to change automatically from time to time effective as of
the effective date of each change in the Prime Rate without
notice to Borrower. Borrower acknowledges that the Prime Rate is
not necessarily the lowest interest rate charged by Lender on
other credit and that the term does not imply or indicate that
the interest rate designated from time to time by Lender as its
Prime Rate is equal to or lower than that applicable to any other
credit extended by Lender.
(ii) Provided (a) there is no Event of Default in existence,
(b) that Borrower pays to Lender a fee equal to one-quarter
percent (.25%) of the then-outstanding principal balance of the
Loan at the time Borrower shall provide notice to Lender of its
election under this subparagraph, and (c) Borrower shall
establish the effective date of the conversion of the interest
rate in such notice (such effective date not to be less than ten
(10) days or more than thirty (30) days after Borrower's notice
to Lender), Borrower may convert the interest rate applicable to
this Note at any one time during the Permanent Period from the
Prime Rate - based rate described above, and from and after such
effective date the rate of interest hereunder shall be equal to
three percent (3%) above the "weekly average yield" on United
States Treasury Securities adjusted to a constant maturity of one
(1), three (3), or five (5) years, as Borrower shall elect in
such notice, rounded to the nearest one-eighth percent (1/8th%),
as published in the Federal Reserve Statistical Release H.15
(519) "Selected Interest Rates" (the "Release") forty-five (45)
days prior to the effective date of the fixing of the interest
rate.
(iii) Upon the expiration of the one (1), three (3)
or five (5) year period, as the case may be, elected by Xxxxxxxx
in subparagraph (ii) above (such expiration date of such period,
together with each expiration date of each subsequent one (1),
three (3) or five (5) year period, as the case may be, described
in this subparagraph (iii), hereinafter each called a "Change
Date"), the rate of interest applicable to this Note shall be
fixed again for the same number of years initially elected by
Xxxxxxxx (either one (1), three (3) or five (5) years), and then
as of such Change Date the rate of interest applicable to this
Note shall be equal to three percent (3%) above the "weekly
average yield" on United States Treasury Securities adjusted to a
constant maturity of one (1), three (3) or five (5) years, as
shall have been elected in Borrower's initial notice, rounded to
the nearest one-eighth percent (1/8th%), as published in the
Release forty-five (45) days prior to such Change Date.
(iv) If a fixed rate period of one (1), three (3) or five
(5) years, as the case may be, would end after the Maturity Date
(as hereinafter defined), then that fixed rate period shall be
shortened so the last day of that period shall be the Maturity
Date. Further, if the Release is no longer published, a
substitute therefor as Lender may select in its good faith
discretion shall be utilized, and Lender will then notify
Borrower of such substitute, and further provided that if the
Release is not published on the date of any change of the
interest rate, as aforesaid, then the Release as published on the
most recent date prior thereto shall be utilized.
B. On the first (1st) day of the calendar month after the
date hereof and on the first (1st) day of each of the next
seventeen (17) calendar months thereafter (the "Construction
Period") interest only shall be payable at the rate per annum
applicable to such period set forth above.
C. Commencing on the first (1st) day following the earlier
of (i) the first (1st) calendar month following the Completion
Date (as defined in the Loan Agreement) or (ii) the first (1st)
calendar month following the expiration of the Construction
Period and on the first (1st) day of each calendar month
thereafter to and including the first (1st) day of the calendar
month in which the Maturity Date shall occur (the "Permanent
Period"), principal and interest at the then applicable interest
rate, shall be payable in level monthly installments as
determined by Lender to be sufficient to amortize the outstanding
principal indebtedness hereof over a fifteen (15) year
amortization schedule, such amortization schedule to commence on
the first (1st) day of the Permanent Period. It is provided,
however, that if the interest rate applicable to this Note shall
be adjusted pursuant to paragraph A above (whether by a change in
the Prime Rate or a change in the fixed rate on a Change Date),
then the monthly payments due hereunder shall be adjusted one (1)
calendar month following the effective date of such change in the
Prime Rate or the Change Date, as the case may be, so that
principal and interest at the then-applicable interest rate shall
be payable in level monthly installments in amounts determined by
Lender to be sufficient to amortize the then-outstanding
principal indebtedness hereof over the then-remaining period of
the original fifteen (15) year amortization schedule.
D. The entire outstanding principal hereof, together with
all unpaid interest at the aforesaid rate, shall be due and
payable on the earlier of (1) the date that is fifteen (15) years
after the first (1st) day of the Permanent Period or (2) March 1,
2013 (the "Maturity Date"), unless earlier due by acceleration or
otherwise.
In the event any installment is not received by Lender
within fifteen (15) days after the date on which it is due and
payable as set forth above, then a delinquency charge in an
amount equal to five percent (5%) of such installment shall in
addition to such installment be and become due and payable.
E. If Borrower shall not have elected to fix the rate of
interest applicable to this Note pursuant to paragraph A (ii)-
(iv) above, or if Borrower shall elect one (1) year fixed rate
terms pursuant to paragraph A (ii)-(iv) above, then Borrower may
prepay this Note in whole or in part at any time without premium
or penalty. If Borrower shall have elected to fix the rate of
interest applicable to this Note pursuant to paragraph A (ii)-
(iv) above for three (3) or five (5) year terms, then if at any
time during the Permanent Period, Borrower prepays all or part of
the unpaid principal balance of the Loan, Borrower shall pay to
Lender a prepayment fee together with such prepayment in an
amount representing the following percentage of the amount of
principal being prepaid in excess of $250,000 (the "Prepayment
Amount"):
(i) two percent (2%) of the Prepayment Amount if such
prepayment is made in each of the first (1st) year through fifth
(5th) year of the Permanent Period; and
(ii) one percent (1%) of the Prepayment Amount if such
prepayment is made in each of the sixth (6th) through tenth
(10th) years of the Permanent Period.
During the Construction Period, and in the eleventh (11th)
through the fifteenth (15th) years of the Permanent Period,
Borrower may prepay this Note in whole or in part without premium
or penalty.
If any installment payment under this Note shall become due
on a Saturday, Sunday or public holiday under the laws of the
Commonwealth of Pennsylvania, such payment shall be made on the
next succeeding day and such extension of time shall in such case
be included in computing interest in connection with such
payment.
Simultaneously with the execution and delivery of this Note,
Borrower shall pay to Lender the remaining Thirty-Five Thousand
Dollars ($35,000) of the Fifty Thousand Dollar ($50,000)
commitment fee, in addition to all other sums payable hereunder.
This Note is secured, inter alia, by an Open-End Mortgage
and Security Agreement (the "Mortgage") of even date herewith
covering an approximately 124 acre site owned in fee simple by
Borrower in the Township of Union, Xxxxxxxx County, Pennsylvania.
The following shall constitute Events of Default under this
Note:
(a) Borrower shall fail to make any payment of any
installment of interest or principal and interest or any other
sum under this Note when due or within ten (10) days thereafter;
(b) An "Event of Default" as defined in the Loan Agreement
or the Mortgage shall have occurred;
(c) Any proceeding for attachment or garnishment or the like
shall be commenced against Lender by any creditor of Borrower or
of any guarantor of this Note;
(d) A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for
relief in respect of Borrower or any guarantor of this Note in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Borrower or any
such guarantor or for any substantial part of its, his or her
property, or for the winding-up or liquidation of its, his or her
affairs, and such proceeding shall remain undismissed or unstayed
and in effect for a period of sixty (60) consecutive days or such
court shall enter a decree or order granting any of the relief
sought in such proceeding;
(e) Borrower or any guarantor of this Note shall commence a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of itself,
himself or herself or for any substantial part of its, his or her
property, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its, his or her debts
as they become due, or shall admit in writing an inability to pay
any of its, his or her debts as they become due, or shall take
any action in furtherance of any of the foregoing.
Upon the occurrence of an Event of Default specified in
paragraphs (a) or (b) above (other than an Event of Default
defined in the Loan Agreement or Mortgage which is of the type
described in paragraphs (c), (d) or (e) above), then the whole of
the principal of the indebtedness evidenced by this Note, and the
unpaid interest thereon, and any other sums then unpaid by
Borrower under this Note shall, at the option of the holder
hereof and without notice, forthwith become due and payable.
Upon the occurrence of an Event of Default specified in
paragraphs (c), (d) or (e) above (or a similar type of Event of
Default described in the Loan Agreement or Mortgage), then the
whole of the principal of the indebtedness evidenced by this
Note, and the unpaid interest thereon, and any other sums then
unpaid by Borrower under this Note shall automatically and
immediately become due and payable without notice or any other
act. Notwithstanding the above-stated rate or rates of interest,
from and after the Maturity Date of this Note, by acceleration or
otherwise, the outstanding principal balance of this Note shall
bear interest, until paid in full, at the rate per annum (based
on a year of 360 days and actual days elapsed) equal to four
percent (4%) above the Prime Rate (the "Default Rate"), such rate
to change automatically as of the effective date of each change
in the Prime Rate. The interest rates set forth herein,
including without limitation the Default Rate, shall continue to
apply whether or not judgment shall have been entered on this
Note.
Borrower shall pay all costs of Xxxxxx (including reasonable
attorneys' fees) in seeking to enforce or collect any
indebtedness evidenced by this Note.
Notwithstanding any provision of this Note to the contrary,
it is the intent of Borrower and Lender that Lender shall not at
any time be entitled to receive, collect or apply, and Borrower
and Lender shall not be deemed to have contracted for, as
interest on the principal indebtedness evidenced hereby, any
amount in excess of the maximum rate of interest permitted to be
charged by applicable law, and in the event Lender ever receives,
collects or applies as interest any such excess, such excess
shall be deemed partial payment of the principal indebtedness
evidenced hereby, and if such principal shall be paid in full,
any such excess shall forthwith be paid to Borrower. In the
event that, but for this paragraph, the rate of interest
applicable to this Note would at any time exceed the maximum
lawful rate, then this Note and all interest hereon shall
thereupon be immediately due and payable.
No delay or omission on the part of Lender or of any holder
in exercising any right hereunder shall operate as a waiver of
such right or of any other right of such holder, nor shall any
delay, omission or waiver on any one occasion be deemed a bar to
or waiver of the same or any other right on any future occasion.
Borrower and every endorser of this Note, regardless of the time,
order or place of signing, consent to any one or more extensions
or postponements of the time of payment or any other indulgences,
to any substitutions, exchanges, renewals or releases of
collateral for this Note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
The rights and obligations of the parties under this Note
shall be governed by and interpreted and enforced in accordance
with the substantive laws of the Commonwealth of Pennsylvania,
without giving effect to the principles of conflict of laws.
Borrower hereby waives presentment for payment, demand,
protest, notice of protest and notice of dishonor, and notice of
non-payment.
XXXXXXXX DOES HEREBY EMPOWER ANY ATTORNEY OF ANY COURT OF
RECORD WITHIN THE COMMONWEALTH OF PENNSYLVANIA TO APPEAR FOR
XXXXXXXX AND, WITH OR WITHOUT A COMPLAINT OR DECLARATION FILED,
AND AFTER AN EVENT OF DEFAULT, CONFESS A JUDGMENT OR JUDGMENTS
AGAINST XXXXXXXX AND IN FAVOR OF XXXXXX OR XXXXXX'S SUCCESSORS OR
ASSIGNS IN ANY COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA FOR THE UNPAID PRINCIPAL BALANCE HEREOF, AND ALL
INTEREST HEREON, TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S
COMMISSION OF 2% FOR COLLECTION. THE AUTHORITY AND POWER TO
APPEAR FOR AND ENTER JUDGMENT AGAINST BORROWER SHALL NOT BE
EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, AND MAY BE EXERCISED
FROM TIME TO TIME AND AS OFTEN AS LENDER OR ITS SUCCESSORS OR
ASSIGNS SHALL DEEM NECESSARY OR DESIRABLE. ANY SUCH JUDGMENT
SHALL BE FULLY ENFORCEABLE UP TO THE AMOUNT DUE FROM BORROWER AT
THE TIME ENFORCEMENT OF THE JUDGMENT IS SOUGHT, PLUS AN
ATTORNEY'S COMMISSION OF 2% FOR COLLECTION. BORROWER HEREBY
FOREVER WAIVES AND RELEASES ANY AND ALL ERRORS IN SAID
PROCEEDINGS, WAIVES STAY OF EXECUTION, STAY, CONTINUANCE OR
ADJOURNMENT OF SALE ON EXECUTION, THE RIGHT TO PETITION TO SET
ASIDE OR ORDER A RESALE, THE RIGHT TO EXCEPT TO THE SHERIFF'S
SCHEDULE OF PROPOSED DISTRIBUTION, THE RIGHT OF INQUISITION AND
EXTENSION OF TIME OF PAYMENT, AND AGREES TO CONDEMNATION OF ANY
PROPERTY LEVIED UPON BY VIRTUE OF ANY EXECUTION ISSUED ON ANY
SUCH JUDGMENT, AND BORROWER SPECIFICALLY WAIVES ALL EXEMPTIONS
FROM XXXX AND SALE OF ANY PROPERTY THAT NOW IS OR MAY HEREAFTER
BE EXEMPT UNDER ANY EXISTING OR FUTURE LAWS OF THE UNITED STATES
OF AMERICA OR THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY OTHER
JURISDICTION.
BORROWER KNOWINGLY, AND AFTER CONSULTATION WITH INDEPENDENT
COUNSEL, WAIVES ITS RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH
JUDGMENT AND UNDERSTANDS THAT UPON ENTRY SUCH JUDGMENT SHALL
BECOME A LIEN ON ALL REAL PROPERTY OF BORROWER IN THE COUNTY IN
WHICH SUCH JUDGMENT IS ENTERED.
XXXXXXXX ACKNOWLEDGES AND AGREES THAT THE ABOVE PARAGRAPHS
OF THIS SECTION CONTAIN PROVISIONS UNDER WHICH XXXXXX MAY ENTER
JUDGMENT BY CONFESSION AGAINST BORROWER BEING FULLY AWARE OF ITS
RIGHT TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY
JUDGEMENT OR OTHER CLAIM THAT MAY BE ASSERTED AGAINST IT BY
XXXXXX HEREUNDER BEFORE JUDGMENT IS ENTERED, BORROWER HEREBY
FREELY, KNOWINGLY AND INTELLIGENTLY WAIVES THESE RIGHTS AND
EXPRESSLY AGREES AND CONSENTS TO XXXXXX'S ENTERING JUDGMENT
AGAINST IT BY CONFESSION PURSUANT TO THE TERMS HEREOF.
This Note shall bind Borrower and Xxxxxxxx's successors and
assigns and the benefits hereof shall inure to the benefit of
Xxxxxx and Xxxxxx's successors and assigns.
This is a sealed instrument.
WITNESS the due execution and sealing hereof as of the date
first above written.
WITNESS/ATTEST: MARK TWELVE ASSOCIATES, L.P.,
a Pennsylvania limited
partnership
By: MARK CENTERS TRUST,
a Maryland business trust,
General Partner
/s/ Xxxxxx Xxxx
Xxxxxx Xxxx
Senior Vice President and
Chief Financial Officer
