EXHIBIT 10.10
ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES
THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT
FEES (this "ASSIGNMENT") is made as of November 1, 2004, by CEDAR-FRANKLIN
VILLAGE LLC, a Delaware limited liability company, having its principal place of
business at c/o Cedar Shopping Centers Partnership, L.P., 00 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, XX 00000 ("BORROWER"), to EUROHYPO AG, NEW
YORK BRANCH, the New York branch of a German banking corporation, having an
address at 1114 Avenue of the Americas, Xxxxxx-Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("LENDER"), and is consented and agreed to by XXXXXXXX PROPERTIES, INC., a
Massachusetts corporation, having its principal place of business at 0000
Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000 ("MANAGER").
RECITALS:
A. Borrower by its Promissory Note of even date herewith given to
Lender (together with all extensions, renewals, modifications, substitutions and
amendments thereof, the "NOTE") is indebted to Lender in the principal sum of
FORTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($43,500,000.00)
advanced pursuant to the Loan Agreement of even date herewith between Borrower
and Lender (together with all extensions, renewals, modifications, substitutions
and amendments thereof, the "LOAN AGREEMENT"), in lawful money of the United
States of America, with interest from the date thereof at the rates set forth in
the Note (the indebtedness evidenced by the Note, together with such interest
accrued thereon, shall collectively be referred to as the "LOAN"), principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
B. The Loan is secured by, among other things, a Mortgage and Security
Agreement (the "MORTGAGE"), dated as of the date hereof, which grants Lender a
first lien on the property encumbered thereby (the "PROPERTY"). The Note, the
Loan Agreement, the Mortgage, this Assignment and any of the other documents
evidencing or securing the Loan are collectively referred to as the "LOAN
DOCUMENTS".
C. Pursuant to a certain Management Agreement of even date herewith
between Borrower and Manager (the "MANAGEMENT AGREEMENT") (a true, correct and
complete copy of which Management Agreement is attached hereto as Exhibit A),
Borrower employed Manager exclusively to rent, lease, operate and manage the
Property and Manager is entitled to certain management fees (the "MANAGEMENT
FEES") thereunder.
D. Lender requires as a condition to the making of the Loan that
Borrower assign the Management Agreement and that Manager subordinate its
interest in the Management Fees in lien and payment to the Mortgage as set forth
below.
AGREEMENT
For good and valuable consideration the parties hereto agree as
follows:
1. Assignment of Management Agreement. As additional collateral
security for the Loan, Borrower hereby conditionally transfers, sets over and
assigns to Lender all of Borrower's right, title and interest in and to the
Management Agreement, said transfer and assignment to automatically become a
present, unconditional assignment, at Lender's option, upon the occurrence and
during the continuance of an Event of Default under the Note, the Loan
Agreement, the Mortgage or any of the other Loan Documents (each, an "EVENT OF
DEFAULT").
2. Subordination of Management Fees. The Management Fees and the
Management Agreement and all rights and privileges of Manager to the Management
Fees or under the Management Agreement are hereby and shall at all times
continue to be subject and unconditionally subordinate in all respects in lien
and payment to the lien and payment of the Mortgage, the Note, the Loan
Agreement and the other Loan Documents and to any renewals, extensions,
modifications, assignments, replacements, or consolidations thereof and the
rights, privileges, and powers of Lender thereunder.
3. Estoppel. Manager represents and warrants that (a) the Management
Agreement is in full force and effect and has not been modified, amended or
assigned other than pursuant to this Assignment and constitutes the entire
agreement between Manager and Borrower with respect to management of the
Property, (b) neither Manager nor Borrower is in default under any of the terms,
covenants or provisions of the Management Agreement and Manager knows of no
event which, but for the passage of time or the giving of notice or both, would
constitute an event of default under the Management Agreement, (c) neither
Manager nor Borrower has commenced any action or given or received any notice
for the purpose of terminating the Management Agreement, (d) the Management Fees
and all other sums due and payable to the Manager under the Management Agreement
have been paid in full and (e) that Manager is aware that the Leases and Rents
relating to the Property have been assigned collaterally to Lender pursuant to
the Loan Documents. Manager and Borrower agree not to amend, modify, replace,
substitute, cancel or terminate the Management Agreement without Lender's prior
written consent.
4. Agreement by Borrower and Manager. Borrower and Manager hereby agree
that upon the occurrence and during the continuance of an Event of Default
during the term of this Assignment or upon the occurrence of any event which
would entitle Lender to terminate the Management Agreement in accordance with
the terms of the Loan Documents, Lender may terminate the Management Agreement
and require Manager to transfer its responsibility for the management of the
Property to a management company selected by Lender in Lender's reasonable
discretion, effective as of the date set forth in Lender's notice to Manager.
Following any such termination, Manager shall apply all rents, security
deposits, issues, proceeds and profits of the Property in accordance with
Lender's written directions to Manager. Any such termination of the Management
Agreement by Lender hereunder (and any termination under Sections 5 or 6 hereof)
shall, as between Borrower and Manager, be deemed a termination by Borrower
under the Management Agreement, and Manager's rights with respect to Borrower
shall be determined pursuant to the terms of the Management Agreement.
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5. Borrower's Right to Replace Manager. Borrower shall have the right
to terminate the Management Agreement and enter into a new management agreement
with the Approved Property Manager in accordance with Section 7.2 of the Loan
Agreement.
6. Lender's Right to Replace Manager. In addition to the foregoing, in
the event that Lender, in Lender's reasonable discretion, at any time during the
term of this Assignment, determines that the Property is not being managed in
accordance with generally accepted management practices for properties similar
to the Property, Lender shall deliver written notice thereof to Borrower and
Manager, which notice shall specify with particularity the grounds for Lender's
determination. If Lender reasonably determines that the conditions specified in
Lender's notice are not remedied to Lender's reasonable satisfaction by Borrower
or Manager within thirty (30) days from receipt of such notice or that Borrower
or Manager have failed to diligently undertake correcting such conditions within
such thirty (30) day period, Lender may direct Borrower to terminate Manager as
manager of the Property and terminate the Management Agreement and to replace
Manager with a management company acceptable to Lender in Lender's sole
discretion and in such an event, Manager acknowledges that Lender shall not be
liable to Manager for any unpaid Management Fees which accrued prior to the date
of such termination.
7. Receipt of Management Fees. Manager shall not be obligated to return
or refund to Lender any Management Fees or other fee, commission or other amount
received by Manager prior to the occurrence of the Event of Default, and to
which Manager was entitled under the Management Agreement.
8. Consent and Agreement by Manager. Manager hereby acknowledges and
consents to this Assignment and agrees that Manager will act in conformity with
the provisions of this Assignment and Lender's rights hereunder or otherwise
related to the Management Agreement. In the event that the responsibility for
the management of the Property is transferred from Manager in accordance with
the provisions hereof or otherwise, Manager shall fully cooperate in
transferring its responsibility to a new management company and effectuate such
transfer no later than thirty (30) days from the date the Management Agreement
is terminated. Further, Manager shall (a) not contest or impede the exercise by
Lender of any right it has under or in connection with this Assignment; (b) in
the manner provided for in this Assignment, give at least thirty (30) days prior
written notice to Lender of its intention to terminate the Management Agreement
or otherwise discontinue its management of the Property and (c) not amend any of
the provisions or terms of the Management Agreement without the prior consent of
Lender.
9. Termination. At such time as the Loan is paid in full and the
Mortgage is released of record, this Assignment and all of Lender's right, title
and interest hereunder with respect to the Management Agreement shall terminate.
10. Notices. All notices or other communications hereunder shall be in
writing and shall be given in accordance with Section 11.6 of the Loan
Agreement. Any notice or other communication to Manager shall be addressed as
follows (or at such other address and person as shall be designated by Manager
from time to time):
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If to Manager: Xxxxxxxx Properties, Inc.
000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
11. No Oral Change. This Assignment, and any provisions hereof, 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, Lender or Manager, 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.
12. Liability. This Assignment shall be binding upon and inure to the
benefit of Borrower, Manager and Lender and their respective successors and
assigns forever.
13. Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.
14. Governing Law. This Assignment shall be governed, construed,
applied and enforced in accordance with the laws of the State of New York and
the applicable laws of the United States of America.
15. Headings, etc. The headings and captions of various paragraphs of
this Assignment are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
16. Duplicate Originals, Counterparts. This Assignment may be executed
in any number of duplicate originals and each duplicate original shall be deemed
to be an original. This Assignment may be executed in several counterparts, each
of which counterparts shall be deemed an original instrument and all of which
together shall constitute a single Assignment. The failure of any party hereto
to execute this Assignment, or any counterpart hereof, shall not relieve the
other signatories from their obligations hereunder.
17. Number and Gender. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
18. Secondary Market. Lender may sell, transfer and deliver the Note
and assign the Mortgage, this Assignment and the other Loan Documents to one or
more investors in the secondary mortgage market ("INVESTORS"). In connection
with such sale or at any time prior to such sale, and from time to time, Lender
may retain or assign responsibility for servicing the Loan, including the Note,
the Mortgage, this Assignment and the other Loan Documents, or may delegate some
or all of such responsibility and/or obligations to a servicer including, but
not limited to, any subservicer or master servicer, on behalf of the Investors.
All references to Lender herein shall refer to and include any such servicer to
the extent applicable.
19. Further Assurances. Manager and Borrower shall, at Borrower's sole
cost and expense: (a) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the Lender's rights
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hereunder, as Lender may reasonably require; and (b) do and execute all and such
further lawful and reasonable acts, conveyances and assurances for the better
and more effective carrying out of the intents and purposes of this Assignment,
as Lender shall reasonably require from time to time.
20. Miscellaneous. (a) Wherever pursuant to this Assignment (i) Lender
exercises any right given to it to approve or disapprove, (ii) any arrangement
or term is to be satisfactory to Lender, or (iii) any other decision or
determination is to be made by Lender, the decision of Lender to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Lender, shall be
in the sole and absolute discretion of Lender and shall be final and conclusive,
except as may be otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Assignment it is provided that Borrower
shall pay any costs and expenses, such costs and expenses shall include, but not
be limited to, legal fees and disbursements of Lender actually incurred, whether
retained firms, the reimbursement for the expenses of in-house staff or
otherwise.
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IN WITNESS WHEREOF the undersigned have executed this
Assignment as of the date and year first written above.
BORROWER:
CEDAR-FRANKLIN VILLAGE LLC,
a Delaware limited liability company
By: Cedar-Franklin Village 2 LLC, a Delaware
limited liability company, its sole member
By: Cedar Shopping Centers Partnership,
L.P., a Delaware limited partnership,
its sole member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its
general partner
By: _____________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
LENDER:
EUROHYPO AG, NEW YORK BRANCH, the New York branch
of a German banking corporation
By:__________________________________
Name:
Title:
By: __________________________________
Name:
Title:
MANAGER:
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a _________________________________
By:________________________________
Name:
Title:
EXHIBIT A
MANAGEMENT AGREEMENT
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