Loan No. 00-0000000
CAPITAL IMPROVEMENT AND TENANT FITOUT ESCROW AGREEMENT
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This Capital Improvement and Tenant Fit-Out Escrow Agreement (the
"Agreement") is made as of March 17, 2004 between Xxxxx Fargo Bank N.A. f/k/a
Norwest Bank Minnesota, National Association, as Trustee for the registered
holders of NationsLink Funding Corporation, Commercial Mortgage Pass-Through
Certificates, Series 1998-2, in its capacities as lender and escrow agent
("Lender"), and Cedar Townfair, LLC, a Delaware limited liability company
("Borrower").
RECITALS
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A. This Agreement is being executed in connection with Lender's consent to
the assumption by Borrower of a mortgage loan to Townfair Center
Associates, a Pennsylvania general partnership ("Seller") in the
original principal amount of Ten Million Seven Hundred Thousand and
No/100 Dollars ($10,700,000.00) (the "Loan"), and the Loan assumption
is incident to Borrower's purchase of the real property commonly known
as Townfair Center (Phase I & II), 000 Xxxxx Xxx Xxxxxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxxxxxxxxx, being more particularly described on Exhibit A
attached hereto.
B. The Loan is evidenced by a Promissory Note (the "Note"), dated February
13, 1998, made by Seller and is secured by, among other things, an
Open-End Mortgage, Assignment of Leases and Rents and Security
Agreement (the "Security Instrument"), dated as of February 13, 1998,
encumbering that certain real property situated in the County of
Indiana, Commonwealth of Pennsylvania ("State"), as more particularly
described on Exhibit A attached hereto and incorporated herein by this
reference, together with the buildings, structures and other
improvements now or hereafter located thereon (said real property,
buildings, structures and other improvements being hereinafter
collectively referred to as the "Property") and by other documents and
instruments, and the Lender's consent to the transfer of the Property
to Borrower is being made pursuant to a Consent and Assumption
Agreement with Limited Release dated of even date herewith (the
"Assumption Agreement") (the Note, Security Instrument, Assumption
Agreement and such other documents, agreements and instruments, as the
same may from time to time be amended, modified, extended, severed,
split, divided, spread, restated, substituted, supplemented,
consolidated, renewed or replaced, being collectively referred to
herein as the "Loan Documents");
C. As a condition to Lender giving its consent to the assumption of the
Loan by Borrower, the transfer of the Property to Borrower and the
construction of a new 5,000 square foot building on the Property,
Lender has required that Borrower deposit the Escrow Funds (hereinafter
defined) with Lender pursuant and subject to the terms of this
Agreement.
NOW, THEREFORE, to induce Lender to consent to the transfer of the
Property to Borrower, consent to Borrower's assumption of the Loan and consent
to the construction of a new 5,000 square foot building on the Property and in
consideration of the premises and the due performance of the commitments and
agreements hereinafter set forth, and other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Escrow. Borrower shall establish and maintain an escrow of funds with
Lender pursuant to the terms of this Agreement for the payment of
future customary and reasonable bona fide costs and expenses incurred
by Borrower in connection with the (i) construction of a 5,000 square
foot building on the Property ("New Building") and (ii) completion of
tenant improvements required to be paid by Borrower in connection with
a lease ("New Lease") for approximately 3,000 square feet of space in
the New Building (the "Leasing Matters").
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2. Deposit of Escrow Funds. All amounts held by Lender at any time in
escrow pursuant to this Agreement are the "Escrow Funds". On the date
hereof, Borrower shall make an initial deposit of $393,310.00 with
Lender, to be held in escrow by Lender according to the terms of this
Agreement. The Escrow Funds shall be disbursed or applied only as
specified in this Agreement.
3. Escrow Account. Lender agrees to hold all Escrow Funds in an Eligible
Account (hereinafter defined) selected by Lender from time to time in
the exercise of its sole discretion (the "Escrow Account"). No earnings
or interest on the Escrow Funds shall be payable to Borrower. The
Escrow Funds shall not constitute a trust fund and may be commingled
with other monies held by Lender. The Escrow Account shall be held in
the name of Lender and shall be within its sole and exclusive control,
and all funds deposited in the Escrow Account shall be for the account
of Lender. Except as provided herein, Borrower shall have no right to
or interest in the Escrow Funds or Escrow Account and shall have no
authority to withdraw Escrow Funds from the Escrow Account. An
"Eligible Account" shall mean either (a) an account maintained with a
depository institution or trust company, the long term unsecured debt
obligations of which are rated in one of the three highest rating
categories by any Rating Agency (hereinafter defined) acceptable to
Lender at the time of any deposit therein or (b) a trust account
maintained with a federally or state-chartered depository institution
or trust company acting in its fiduciary capacity, subject to
regulations regarding fiduciary funds on deposit similar to 12 C.F.R.
Section 9.10(b). The term "Rating Agency" shall mean a nationally
recognized credit rating agency (including, without limitation,
Standard & Poor's Rating Group, Fitch Investors Service, L.P., Xxxxx'x
Investors Service, Inc. or Duff and Xxxxxx Credit Rating Co., and their
respective successors and assigns).
4. Permitted Investments. Lender may direct the depository institution
maintaining the Escrow Account to invest the Escrow Funds in one or
more of the following obligations or securities (each a "Permitted
Investment") having, at the time of purchase, the required ratings, if
any, provided for below:
a. Direct obligations of, or guaranteed as to timely payment of
principal and interest by, the United States or any agency or
instrumentality thereof provided that such obligations are backed by
the full faith and credit of the United States of America;
b. Direct obligations of, or guaranteed as to timely payment of
principal and interest by, FHLMC, FNMA or the Federal Farm Credit
System;
c. Demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings
and loan association or savings bank, provided that the short-term
unsecured debt obligations of such depository institution or trust
company must have the highest rating available for such securities
by two or more Rating Agencies acceptable to Lender;
d. Commercial or finance company paper that is rated by two or more
Rating Agencies acceptable to Lender in their highest short-term
unsecured rating category at the time of such investment and is
issued by a corporation the outstanding senior long-term debt
obligations of which are then rated by two or more Rating Agencies
in one of their two highest long-term unsecured rating categories;
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x. Xxxxxxxxxx obligations with respect to any security described in
clause (a) or (b) above entered into with a bank or trust company,
savings and loan association or savings bank, provided that the
short-term unsecured debt obligations of such depository institution
or trust company must have the highest rating available for such
securities by two or more Rating Agencies acceptable to Lender;
f. Units of taxable money market funds which funds are regulated
investment companies, seek to maintain a constant net asset value
per share and invest solely in obligations backed by the full faith
and credit of the United States and repurchase agreements using full
faith and credit issues as collateral and are rated in the highest
rating category available by a Rating Agency acceptable to Lender.
5. Pledge and Security Interest. As additional security for the payment
and performance by Borrower of all duties, responsibilities and
obligations hereunder and under the Loan Documents, Borrower hereby
unconditionally and irrevocably assigns, conveys, pledges, mortgages,
transfers, delivers, deposits, sets over and confirms unto Lender, and
hereby grants to Lender a security interest and a valid and perfected
first lien in (a) the Escrow Funds, (b) the Escrow Account, (c) all
insurance of the Escrow Account, (d) all accounts, contract rights and
general intangibles or other rights and interests pertaining thereto,
(e) all sums now or hereafter therein or represented thereby, (f) all
replacements, substitutions or proceeds thereof, (g) all instruments
and documents now or hereafter evidencing the Escrow Funds or the
Escrow Account, (h) all powers, options, rights, privileges and
immunities pertaining to the Escrow Funds or the Escrow Account
(including the right to make withdrawal therefrom), and (i) all
proceeds of the foregoing. Lender may deliver notice of its interest in
the Escrow Funds and Escrow Account at any time to the financial
institution wherein the Escrow Account has been established, and Lender
shall have possession of all passbooks or other evidences of such
Escrow Account. Borrower hereby assumes all risk of loss with respect
to amounts on deposit in the Escrow Account, except to the extent
caused by the gross negligence or intentional misconduct of Lender.
Borrower hereby agrees that the advancement of Escrow Funds from the
Escrow Account as set forth herein is at Borrower's direction and is
not the exercise by Lender of any right of set-off or other remedy upon
an Event of Default (as defined in the Loan Documents). Borrower hereby
waives all right to withdraw Escrow Funds from the Escrow Account,
except upon full satisfaction of all amounts then due and payable under
the Loan. Borrower agrees to execute and deliver on demand any and all
documentation requested by Lender to further evidence or perfect such
assignment, including, without limitation, Uniform Commercial Code
financing statements. Borrower hereby irrevocably constitutes and
appoints Lender as its attorney-in-fact, with full power of
substitution and transfer, to execute and deliver any and all such
documentation. The power of attorney hereby granted shall be
irrevocable and coupled with an interest. This Agreement shall
constitute a Security Agreement under the Uniform Commercial Code as
enacted in the Commonwealth of Pennsylvania and upon an Event of
Default, Lender may exercise any or all of the remedies available at
law or in equity including, without limitation, the remedies specified
in this Agreement and the remedies available to a secured party
following default as specified in such Uniform Commercial Code. Lender
and Borrower hereby acknowledge and agree that Lender has a valid and
perfected first priority lien on, and security interest in, any Escrow
Funds now or hereafter held in the Escrow Account.
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6. Disbursement of Escrow Funds to Borrower. Lender shall disburse all or
part of the Escrow Funds to Borrower as provided herein upon
satisfaction of the following terms and conditions:
a. Borrower has delivered to Lender an affidavit, in form satisfactory
to Lender, specifying the amount of the requested disbursement, and:
i. With respect to a requested disbursement for the partial or
complete construction of the New Building, certifying that all
such constructed improvements have been completed and that all
costs in connection therewith have been paid. Simultaneously
with submitting such affidavit, Borrower shall also submit: (1)
lien waivers from the general contractor, any subcontractors and
all materialmen and suppliers showing that they have been paid
for all work and that no liens are claimed; (2) an endorsement
to the Lender's loan policy in the form attached hereto as
Exhibit B insuring that no items have been recorded since the
date of the loan policy and insuring that the loan policy is
still in full force and effect; (3) each request must be in
writing and specify in detail the cost of the labor that has
been performed and the materials that have been incorporated
into the New Building since the date of the previous request, if
any; (4) each request must be certified to be true and correct
by the general contractor and must be accompanied by all
invoices, paid receipts, certificates, proof of subcontractor
payments and other documents that Lender may request at any
time.
ii. With respect to a requested disbursement for tenant improvements
related to the New Lease, certifying that all such tenant
improvements have been completed and that all costs in
connection therewith have been paid, and that, to the extent
applicable, Borrower has reimbursed the related tenant for any
amounts paid by such tenant for such improvements.
Simultaneously with submitting such affidavit, Borrower shall
also submit: (1) lien waivers from the general contractor, any
subcontractors and all materialmen and suppliers showing that
they have been paid for all work and that no liens are claimed;
(2) a written confirmation from the related tenant that it has
accepted the space and the improvements made and has no claim
against the landlord for any unperformed work or un-reimbursed
allowances; (3) to the extent not delivered to the Lender as of
the date hereof, a certified copy of the fully executed lease of
the related tenant; and (4) if required by Lender, an estoppel
certificate and a subordination, non-disturbance and attornment
agreement from the related tenant in form and content acceptable
to Lender.
b. Borrower has delivered to Lender, at Borrower's cost: (i) copies of
building permits or any other certificates required and issued by
governmental authorities in connection with any work performed for
which reimbursement is being sought under this Agreement; and (ii)
if required by Lender, an endorsement to Lender's loan policy of
title insurance obtained in connection with the Loan, insuring
Lender against any mechanic's liens in connection with such work.
c. Borrower has delivered to Lender such other documents as Lender
shall reasonably require to confirm the satisfaction of the
conditions contained herein and the completion of the work performed
for which reimbursement is being sought under this Agreement.
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d. All disbursements requested by Borrower shall be at least $5,000 and
no requests for disbursements shall be made more often than once
during any calendar month.
e. No Event of Default under the Loan Documents exists as of the date
of Borrower's request for a disbursement or the actual date of such
a disbursement.
f. Lender shall have the right, but not the obligation, at Borrower's
cost and expense, to inspect the Property and/or to have the
documentation regarding the Leasing Matters and the New Building
reviewed to verify that the Leasing Matters and New Building for
which reimbursement is being sought have been completed in a good
and workmanlike manner and are otherwise acceptable to Lender.
g. Upon completion of the construction of the New Building, Borrower
shall deliver to the Lender (i) a permanent unconditional
certificate of occupancy or its equivalent and such other permits
and certificates for the uses and occupancy of the New Building;
(ii) an as-built survey showing the location of all improvements,
lot lines, street lines, setback lines, utility lines, easements,
rights of way in form and content acceptable to Lender; (iii) such
affidavits and other documentation necessary to assure the Lender
that all costs, expenses and charges incurred in constructing the
New Building have been paid and there in no secondary, gap or other
financing involved in connection therewith. However, the foregoing
shall not be deemed to require the deliverance or issuance of a
certificate of occupancy for the interior fit-out of the 2,000
square feet of the New Building that is not part of the Leasing
Matters.
h. Notwithstanding anything to the contrary herein, Lender shall not be
required to disburse all or part of the Escrow Funds for (i) costs
incurred by Borrower with respect to materials stored on or off the
Property; (ii) soft costs, including without limitation,
professional and attorneys' fees; or (iii) bonding requirements.
Lender shall not be required to disburse all or part of the Escrow
Funds unless (i) Borrower is in compliance with all applicable
mechanics and construction lien laws, (ii) no construction,
mechanics or other lien is imposed on the Property and (iii) no
notices of or lien claim is recorded.
7. Default by Borrower. Any failure of Borrower to comply with the terms
of this Agreement or any other Loan Document shall be an Event of
Default, and shall entitle Lender to pursue any and all remedies
available to it pursuant to this Agreement, any other Loan Document, at
law or in equity. Without limiting the foregoing, upon the occurrence
and during the continuation of an Event of Default, Lender shall have
the right, but not the obligation, without notice or demand on
Borrower: (a) to withdraw any or all of the Escrow Funds and to
disburse and apply the same, after deducting all costs and expenses of
safekeeping, collection and delivery (including, but not limited to,
attorney fees, costs and expenses) to the obligations of Borrower
hereunder or under any Loan Document in such manner as Lender shall
deem appropriate in its sole discretion; (b) to complete any such acts,
in the Borrower's stead, in such manner and to the extent Lender deems
necessary to fulfill the purpose of this Agreement; (c) to exercise any
and all rights and remedies of a secured party under any applicable
Uniform Commercial Code; and (d) to exercise any other remedies
available at law or in equity. No such use or application of the Escrow
Funds shall be deemed to cure any Event of Default. Any disbursement
made by Lender shall continue to be part of the Loan and secured by the
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Loan Documents. No further direction or authorization from Borrower
shall be necessary to warrant such direct disbursement by Lender and
all such disbursements shall satisfy the obligation of Lender hereunder
and shall be secured by the Loan Documents as fully as if made directly
to Borrower.
8. Indemnity. Borrower represents and warrants to Lender that as of the
date hereof, there are no liens or outstanding claims for which a lien
could be recorded against the Property. Borrower hereby indemnifies and
holds Lender harmless against all claims, losses, costs, damages and
expenses (including attorney fees), which Lender may incur arising from
the inaccuracy of the foregoing representation and warranty, any breach
by Borrower of this Agreement, any action taken by Lender hereunder
and/or any and all claims and demands asserted against Lender arising
out of this Agreement; excepting, however, those based upon its willful
misconduct or gross negligence. The amount of any such claims, losses,
costs, damages and expenses, with interest thereon at the Default Rate
(as defined in the Note), shall be payable by the Borrower immediately
upon demand and, if not so paid, may be reimbursed by withdrawal from
the Escrow Account.
9. Covenants. Borrower covenants, agrees and represents to the Lender
that:
a. Borrower shall diligently proceed with the construction of the New
Building and Borrower shall complete construction of the New
Building, including such street improvements, curbs, sidewalks,
grading, parking, utilities and connection as may be required for
the normal use thereof, within 12 months from the date hereof.
b. Borrower has all necessary approvals from governmental or
quasi-governmental authorities having jurisdiction over the
Property, including, but not limited to, street openings or
closings, zoning and use permits, sewer permits, environmental
permits and approvals, building permits, highway occupancy permits,
and subdivision and land development approvals have been obtained
for the construction of the New Building, and such approvals are
final, unappealed and unappealable and remain in full force and
effect.
c. All construction shall be performed strictly in accordance with all
applicable statutes, laws and ordinances, and in accordance with the
rules, regulations and requirements of all regulatory authorities
having jurisdiction.
d. The New Building when constructed will be wholly within the title
lines, building setback lines and building restrictions lines,
however established, and will not violate applicable use or other
restrictions contained in prior conveyances, zoning laws or
regulations, conditions of subdivision or land development approval,
or elsewhere and Borrower will furnish satisfactory evidence to
Lender with respect thereto.
10. Limitation of Liability of Lender.
a. Lender shall have no liability to any person based upon its errors
in judgment, its performance of its duties under this Agreement, any
claimed failure to perform its duties hereunder, any action taken or
omitted in good faith or any mistake of fact or law; provided that
Lender shall be liable for damages arising out of its gross
negligence or intentional misconduct. Lender shall be automatically
released from all obligation and liability hereunder upon its
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disbursement, delivery or deposit of the Escrow Funds in accordance
with the provisions of this Agreement.
b. The duties of Lender in its capacity as escrow agent hereunder are
purely ministerial. In such capacity, Lender is acting as a
stakeholder for the accommodation of Borrower and is not responsible
or liable in any manner whatsoever related to any signature, notice,
request, waiver, consent, receipt or other document or instrument
pursuant to which Lender may act, including, without limitation,
terms and conditions, sufficiency, correctness, genuineness,
validity, form of execution, or the identity, authority or right of
any person executing or depositing the same.
c. Lender shall not be responsible for the validity or sufficiency of
any cash, instruments, wire transfer or any other property delivered
to it hereunder, for the value or collectibility of any check or
other instrument so delivered or for any representation made or
obligations assumed by Borrower or any other party to the Loan
Documents. Nothing herein contained shall be deemed to obligate
Lender to deliver any cash or any other funds or property referred
to herein, unless the same shall have first been received by Lender
pursuant to this Agreement.
d. In no event whatsoever shall Lender be liable for any losses related
to the Escrow Funds resulting from an investment of Escrow Funds
made in accordance with the terms hereof.
e. Upon the assignment of the Loan and the Loan Documents by Lender,
any Escrow Funds then held by Lender shall be turned over to the
assignee and all responsibility of Lender with respect thereto shall
be terminated.
11. Assignment. Borrower hereby collaterally assigns to Lender, as
additional security for the Loan, its rights under any contract entered
into by Borrower related to any matters for which reimbursement could
be sought by Borrower under this Agreement. Any such contract shall
provide that Lender shall have the right to require performance of such
contract but shall have no liability for any amounts owed by Borrower
and incurred prior to the date Lender exercises its rights herein
provided to require performance.
12. Notices. Any notice, consent, request or other communication required
or permitted hereunder shall be in writing and shall be deemed properly
given if delivered in accordance with the notice requirements contained
in the Note.
13. Governing Law. The terms and provisions hereof shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
14. Binding Agreement. This Agreement is freely assignable by Lender, its
successors, endorsees and assigns, and shall be binding upon the heirs,
executors, administrators, personal representatives, successors and
assigns of the parties hereto, including any assignee of the Note or
any of the other Loan Documents; provided, however, the foregoing shall
not be deemed or construed to (a) permit the assignment by Borrower of
any of Borrower's rights or obligations hereunder, or (b) confer any
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right, title, benefit, cause of action or remedy upon any person or
entity not a party hereto except for assignees of the Note or any of
the other Loan Documents.
15. Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit,
amplify or modify the terms and provisions hereof.
16. Rules of Construction. The parties acknowledge that each party and its
counsel have reviewed and have had input in the drafting of this
Agreement. The parties hereby agree that normal rules of construction
to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto. For purposes of this
Agreement the word "person" shall include an individual, corporation,
limited liability company, limited liability partnership, limited
partnership, partnership, trust, unincorporated association,
government, governmental authority and any other entity.
17. No Third Party Beneficiaries. No person not a party to this Agreement
shall have any third party beneficiary claim or other right hereunder
or with respect hereto.
18. Amendment. This Agreement may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Borrower or Lender, but only by an
agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or
termination is sought.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the
same Agreement.
20. Disposition of Escrow Funds on Repayment of Loan. At such time as the
Loan, is paid in full, Lender shall return any funds then on deposit in
the Escrow Account to Borrower.
21. Remedies Not Exclusive. Lender's rights and remedies under this
Agreement are cumulative and in addition to every other right or remedy
now or hereafter existing under any Loan Document, at law or in equity.
No delay or omission of Lender to exercise any of its rights or powers
shall impair or be a waiver of such right or power. The resort to any
remedy hereunder shall not prevent the concurrent or subsequent
exercise of any other remedy Lender may have.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective the day and year set forth above.
WITNESS: BORROWER:
Cedar Townfair, LLC,
a Delaware limited liability company
By: Cedar Shopping Centers Partnership, L.P.
a Delaware limited partnership
its Sole Member
By: Cedar Shopping Centers, Inc.
a Maryland corporation
its Sole General Partner
_______________________ By:_________________________________
Print Name: Xxx X. Xxxxxx
Title: President
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WITNESS: LENDER:
Xxxxx Fargo Bank N.A. f/k/a Norwest Bank
Minnesota, National Association, as Trustee
for the registered holders of NationsLink
Funding Corporation, Commercial Mortgage Pass-
Through Certificates, Series 1998-2
By: Midland Loan Services, Inc.,
a Delaware corporation,
Its Attorney-in-Fact
_________________ By:________________________________
Name:
Title:
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Exhibit A
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Exhibit B
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