CASH MANAGEMENT AGREEMENT
CASH MANAGEMENT AGREEMENT, dated as of March 14, 1997 between
GR-PROPERTIES III LIMITED PARTNERSHIP, FOXWOODBURG, L.P., GROVE-WESTFIELD
ASSOCIATES LIMITED PARTNERSHIP, GROVE-WEST SPRINGFIELD ASSOCIATES LIMITED
PARTNERSHIP and GR-WESTWYND ASSOCIATES LIMITED PARTNERSHIP having its principal
office at c/o Property Trust, 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000
(hereinafter collectively referred to as "Borrowers") and CITICORP REAL ESTATE,
INC., a Delaware corporation, having its principal place of business at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (together with its successors and/or
assigns, the "Lender".
W I T N E S S E T H:
WHEREAS, each of the Borrowers is the owner of one or more
real properties as shown on Exhibit A hereto (collectively, the "Properties");
and
WHEREAS, Lender is about to make a loan in the amount of
$15,084,000.00 to Borrowers evidenced by a note in the amount of $15,084,000.00
made by Borrowers to Lender (the "Note") and secured by, among other things, one
or more mortgages from each Borrower to Lender (collectively, the "Mortgage")
encumbering the Properties owned by such Borrower (the "Loan"); and
WHEREAS, Borrowers and Lender desire to establish, pursuant to
the terms of this Cash Management Agreement, bank accounts for the deposit (in
accordance with the terms hereof) of all revenues arising from the Properties to
facilitate Borrower's payment of debt service and other payments payable by
Borrowers to Lender pursuant to the Note, Mortgage and any other document
executed in connection with the Loan (collectively, the "Loan Documents").
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Borrower and Lender
agree as follows:
0. From and after the date hereof, Borrowers shall deposit or cause to be
deposited into the deposit accounts described in Exhibit B hereto (collectively,
the "Cash Management Account") within one (1) business day after Borrower's
receipt thereof (whether through an agent or otherwise) all rents, rent,
additional rents and all other revenue received in connection with the ownership
and operation of the Properties (collectively, the "Rents"). The Cash Management
Account must be established in such manner as to permit Lender to make daily
withdrawals therefrom.
1. Notwithstanding anything contained herein or in the Loan Documents to
the contrary, in the event that, at any time during the term of the Loan, (i)
the debt service coverage ratio for the Properties falls below 1.5 to 1.0 based
upon an assumed constant annual interest rate of 9.66% for the most recent
"Measuring Period" (as defined below) during the term of the Loan,
or (ii) a default on the part of Grove Property Trust shall occur under any
interest rate swap agreements pledged to Lender to secure the Loan (each, a
"Sweep Event"), Lender shall, without notice to Borrower, be permitted to
withdraw, and Borrower hereby authorizes Lender to make such withdrawals,
amounts on deposit in the Cash Management Account equal to the amounts that
Borrower will be obligated to pay Lender pursuant to the Loan Documents on the
next occurring Payment Date (as defined in the Note) in respect of debt service
due under the Note and all escrows and reserves required under the Mortgage (the
"Debt Service Amounts"). For the purpose of this Cash Management Agreement, the
term "Measuring Period" shall mean (i) each consecutive 12-month period measured
on a rolling basis for which the Borrowers are required to deliver quarterly
financial statements under the terms of the Loan Documents or (ii) with respect
to the quarterly periods ending June 30, 1997, September 30, 1997 and December
31, 1997, the preceding 3-month, 6-month, and 9-month periods, respectively.
2. All Debt Service Amounts drawn by Lender from the Cash Management
Account shall be deposited into the Other Impositions Account (as defined in the
Mortgage). To the extent available, the Debt Service Amounts on deposit in the
Other Imposition Account shall, on the first day of each calendar month after
the Sweep Event be applied by Lender to the debt service payments due under the
Loan Documents (including, but not limited to and to the extent provided for in
the Loan Document, amounts due for principal, interest, late fees, default
interest, tax, insurance, repair and similar reserves) (collectively, the
"Monthly Payment"). It shall constitute an event of default hereunder, under the
Note and under the Mortgage if there are not Debt Service Amounts on deposit in
the Other Impositions Account on the first day of each month during the
continuance of a Sweep Event sufficient to pay the Monthly Payment and Borrower
has not delivered an amount equal to the deficiency thereof to Lender on or
prior to such date.
3. In the event that, after the occurrence of a Sweep Event, either (i) the
debt service coverage ratio equals or exceeds 1.5 to 1.0 based upon an assumed
annual interest rate of 9.66% for the most recent Measuring Period, or (ii) the
applicable default under the Interest Rate Agreement has been cured, and (iii)
no default shall have occurred or be continuing beyond the expiration of any
applicable grace period under the Note, the Mortgage or any other Loan Document,
Lender shall not make any further withdrawals from the Cash Management Account
unless and until a subsequent Sweep Event shall thereafter occur.
4. All funds in the Other Imposition Account shall be treated as "Funds" as
provided in the second paragraph of Section 3 of the Mortgage. Notwithstanding
anything to the contrary contained in any of the Loan Documents, (x) so long as
a Sweep Event is continuing and Lender has the right to withdraw funds from the
Cash Management Account pursuant to this Agreement, Borrowers shall have no
obligation to make any payments under the Loan Documents for the Monthly Payment
(and no late charge or default rate interest shall accrue, and no default shall
result, from Borrowers' failure to make any such payment) if and to the extent
that, as of 2 p.m. on the date immediately preceding the date on which any such
payment is due, there is an aggregate amount on deposit in the Cash Management
Account equal to or greater than the amount of such Monthly Payment. Borrowers
shall have the right to change the destination of the Cash Management Accounts
from time to time upon not less than 60-days prior written notice to Lender to
new accounts where all Rents will be deposited, subject to the terms of this
Cash Management
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Agreement provided the financial institution which shall maintain such
accounts shall be reasonably satisfactory to Lender.
5. This Agreement is to become effective as of the date hereof, and the
Cash Management Account shall be in a position to process remittances on that
date. This Agreement shall terminate and be of no further force and effect upon
the payment in full of all sums due and owing to Lender under the Loan Documents
and the satisfaction of all obligations of Borrower thereunder.
6. Lender shall not incur any liability or responsibility of any nature for
any act or omission on its part provided the same is in good faith and without
gross negligence and in accordance with this Agreement, and Borrower hereby
fully indemnifies Lender against any claims, and any expenses incident thereto,
which may be asserted against the Lender arising out of or with respect to, any
such act or omission provided the same is in good faith and without negligence.
7. All instructions, notices, statements and other communications provided
for herein shall be given or made in writing and shall be deemed delivered (i)
if delivered by hand delivery or by nationally-recognized overnight courier
service, when received, or (ii) if sent by certified mail, postage prepaid,
return receipt requested, on the date set forth on the return receipt, in each
case to the intended recipient as follows:
To Borrower: c/o Grove Real Estate Asset Trust
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. XxXxxxxx
To Lender: Citicorp Real Estate, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CitiMae Conduit (MC-2)
or, as to any party, at such other address as shall be designated by such party
in a notice to each other party.
8. This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut. Each of the parties hereto submits to personal
jurisdiction in the State of Connecticut and the federal courts of the United
States of America located in said state (and any Appellate Courts taking appeals
therefrom) for the enforcement of such party's rights and obligations hereunder,
and waives (a) any and all personal rights under the law of any state to object
to jurisdiction within the State of Connecticut for the purpose of any action,
suit, proceeding or litigation (collectively, an "Action") to enforce such
obligations of such party and (b) all personal rights to bring any action in any
state other than Connecticut to enforce the rights of such party hereunder. Each
party hereby waives and agrees not to assert, as a defense in any Action brought
in the courts of or within the State of Connecticut and arising out of or
relating
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to this Agreement, (x) that it is not subject to the jurisdiction of such courts
or that such Action may not be brought or is not maintainable in such courts or
that this Agreement may not be enforced in or by such courts or that it is
exempt or immune from execution, (y) that the action is brought in an
inconvenient forum or (z) that the venue of the Action is improper.
9. BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONJUNCTION WITH THIS AGREEMENT, THE NOTE, THE
MORTGAGE, ANY OTHER LOAN DOCUMENT, ANY OTHER AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
10. A default by any of the Borrowers hereunder shall constitute default
under the Note and Mortgage.
11. This Agreement may not be terminated, amended or modified except by a
written instrument signed by all of the parties hereto. None of the parties
hereto may assign or transfer their respective rights or obligations under this
Agreement without the prior written consent of the non-assisting parties.
12. This Agreement may be executed in any number of counterparts. Each
executed counterpart shall be deemed to be an original, whether delivered via
facsimile or otherwise. All executed counterparts taken together shall
constitute one Agreement.
13. This Agreement shall bind and inure to the benefit of the parties and
their respective heirs, executives successors and assigns. Lender and any
successor to Lender's interest in the Loan may assign all or any part of its
rights or remedies under this Agreement to any party or parties (without
limitation) who acquires an interest in the Loan; provided, however, the
indemnification granted to Lender and each successive assignee shall continue to
exist for the benefit of such party notwithstanding any such assignment of this
Agreement by such party. Borrower may not assign any of its rights or
obligations under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BORROWERS:
GR-PROPERTIES III LIMITED
PARTNERSHIP
By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ XXXXXX XXXXXXXX
Xxxxxx X. XxXxxxxx
Its Treasurer
FOXWOODBURG, L.P.
By: FWB, Inc.,
Its General Partner
By: /s/ XXXXXX XXXXXXXX
Xxxxxx X. XxXxxxxx
Its Treasurer
GROVE-WESTFIELD ASSOCIATES
LIMITED PARTNERSHIP
By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ XXXXXX XXXXXXXX
Xxxxxx X. XxXxxxxx
Its Treasurer
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GROVE-WEST SPRINGFIELD ASSOCIATES
LIMITED PARTNERSHIP
By: Grove Investment Group, Inc.,
Its General Partner
By: /s/ XXXXXX XXXXXXXX
Xxxxxx X. XxXxxxxx
Its Treasurer
GR-WESTWYND ASSOCIATES
LIMITED PARTNERSHIP
By: Grove Xxxx Corporation,
Its General Partner
By: /s/ XXXXXX XXXXXXXX
Xxxxxx X. XxXxxxxx
Its Treasurer
LENDER:
CITICORP REAL ESTATE, INC.,
a Delaware corporation
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
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