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Exhibit 99.7
CASH MANAGEMENT AGREEMENT
(this "Agreement")
dated as of April 20, 2000
among
PARK PLAZA MALL, LLC
c/o First Union Real Estate Equity and Mortgage Investments
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Borrower"),
LANDAU & ▇▇▇▇▇▇ OF ARKANSAS, INC.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Manager")
and
FIRST UNION NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(together with its successors and
assigns, the "Holder")
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WHEREAS, pursuant to the Mortgage and Security Agreement dated as of
April 20, 2000 (the "Mortgage"), by and between the Holder and the Borrower, the
Holder has provided financing (the "Loan") to the Borrower secured by the
property or properties owned by the Borrower and described in the Mortgage (the
"Property");
WHEREAS, during any Sweep Period (as defined below), the Holder may
deliver to the Borrower's bank or banks (the "Clearing Bank") maintaining the
operating account or accounts of the Borrower (the "Property Account") a
Clearing Bank Instruction Letter attached as Exhibit A hereto (together with any
modifications, amendments or replacements thereof, the "Instruction Letter"),
which provides that all Rents and Profits (as defined in the Mortgage) be
deposited in the account named therein (upon delivery of the Instruction Letter,
a "Clearing Account") and swept periodically into the accounts established
hereunder;
NOW THEREFORE, in consideration of the mutual premises contained herein
and for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms.
(a) As used herein the following capitalized terms shall have the
respective meanings set forth below:
"Account Proceeds" shall mean any and all Rents and Profits and
other revenue in connection with any Property that is deposited by any Clearing
Bank, the Borrower and the Manager or otherwise into the Cash Collateral Account
from time to time.
"Anticipated Repayment Date" means the "Anticipated Repayment
Date" as defined in the Note.
"Borrower Remainder Account" shall mean the account of Borrower to
which monies in the Borrower Remainder Sub-account are allocated in accordance
with the terms hereof.
"Business Day" shall mean any day other than a Saturday, Sunday
or any day on which commercial banks in New York, New York or the City in which
the Deposit Bank is located are required or permitted by law to be closed.
"Cash Collateral Account" shall have the meaning ascribed to such
term in Section 2 hereof.
"Certificates" means the securities issued in connection with a
Secondary Market Transaction of the Loan.
"Clearing Account" shall have the meaning given such term in the
Recitals.
"Clearing Bank" shall have the meaning given such term in the
Recitals.
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"Collateral" shall mean the Cash Collateral Account, all
Permitted Investments and any and all proceeds and products thereof.
"Collection Period" with respect to any Payment Date, shall mean
the period of days from the first day of the month immediately preceding the
Payment Date to the last day of the month prior to which such Payment Date
occurs.
"Debt Service Coverage Ratio" shall mean a ratio for the
applicable twelve month calendar period, annualized by the Holder as applicable,
in which: (A) the numerator is the Net Operating Income for such period as set
forth in the statements required hereunder; and (B) the denominator is the
aggregate amount of principal and interest due and payable on the Note.
"Deposit Bank" shall mean the bank or banks selected by the
Holder to maintain the Cash Collateral Account.
"Eligible Account": Either (i) an account or accounts maintained
with an Eligible Bank or (ii) a Trust Account. Eligible Accounts may bear
interest.
"Eligible Bank" shall mean a bank that (i) satisfies the Rating
Criteria and (ii) insures deposits held by such bank through the Federal Deposit
Insurance Corporation.
"Event of Default" shall mean an "Event of Default" or default
beyond applicable grace or cure period under Loan Documents.
"Gross Income from Operations" shall mean all income, computed in
accordance with generally accepted accounting principles, derived from the
ownership and operation of the Property from whatever source, including, but not
limited to, Rents and Profits, utility charges, escalations, forfeited security
deposits, interest on credit accounts, service fees or charges, license fees,
parking fees, rent concessions or credits, and other pass-through or
reimbursements paid by tenants under the Leases of any nature but excluding
sales, use and occupancy or other taxes on receipts required to be accounted for
by Borrower to any government or governmental agency, refunds and uncollectible
accounts, sales of furniture, fixtures and equipment, proceeds of casualty
insurance and condemnation awards (other than business interruption or other
loss of income insurance), and any disbursements to the Borrower from the
Impound Sub-account, the Replacement Reserve Sub-account, or any other escrow
fund established by the Loan Documents.
"Instruction Letter" shall have the meaning ascribed to such term
in the Recitals.
"Loan" shall have the meaning ascribed to such term in the
Recitals.
"Loan Documents" shall have the meaning set forth for such term
in the Mortgage.
"Mezzanine Note" shall, if applicable, mean the promissory note
from Park Plaza 2, LLC to the mezzanine lender in connection with the proposed
Mezzanine Loan (as defined in the Mortgage), as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
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"Monthly Payment Amount" shall have the meaning given to such
term in the Note.
"Mortgage Satisfaction Event" shall mean the satisfaction in full
of the Obligations.
"Mortgage Sub-accounts" shall have the meaning ascribed to such
term in Section 2(c).
"Net Operating Income" shall mean the amount obtained by
subtracting Operating Expenses from Gross Income from Operations.
"Note" shall mean that certain Promissory Note of even date
herewith, made by the Borrower in favor of the Holder and evidencing the Loan,
as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.
"Obligations" shall mean any and all debt, liabilities and
obligations of the Borrower to the Holder pursuant to or in connection with the
Loan, whether now or hereafter existing, including without limiting the
generality of the foregoing, the indebtedness evidenced by the Note, all
interest accruing thereon, and any and all debt, liabilities and obligations of
the Borrower under the Loan Documents.
"Operating Expenses" shall mean the total of all expenditures,
computed in accordance with generally accepted accounting principles, of
whatever kind relating to the operation, maintenance and management of the
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, property taxes and assessments, advertising expenses,
management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Holder, and other
similar costs, but excluding depreciation, debt service, capital expenditures,
and contributions to the Replacement Reserve Sub-account Fund, the Impound
Sub-account, the Leasing Reserve Sub-account and any other reserves required
under the Loan Documents.
"Payment Date" shall have the meaning given to such term in the
Note.
"Permitted Investments" shall mean any investment suitable for
the investment of escrows and reserves established under mortgage loans included
in a Secondary Market Transaction in which some or all of the Certificates
issued are rated "AAA" (or the equivalent rating) by the Rating Agencies, as the
standards therefor are established from time to time, or such investments which
are otherwise acceptable to the Holder.
"Person" shall mean any individual, sole proprietorship,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party or government (whether territorial, national, federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
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"Property" shall have the meaning ascribed to such term in the
Recitals.
"Rating Agencies" shall mean (i) any nationally-recognized
statistical rating organizations that provide a rating on any Certificates on
the date of issuance of the Certificates or (ii) prior to the issuance of the
Certificates, S&P and any other nationally-recognized statistical rating
organizations that have been designated by the Holder in its sole discretion.
"Rating Criteria" with respect to any Person, shall mean that (i)
the short-term unsecured debt obligations of such Person are rated at least
"A-1" by S&P and, if rated by another Rating Agency, are rated in an equivalent
category by such other Rating Agency, if deposits are held by such person for a
period of less than 30 days, or (ii) the long-term unsecured debt obligations of
such Person are rated at least "AA-" by S&P and, if rated by another Rating
Agency, are rated in an equivalent category by such other Rating Agency, if
deposits are held by such person for a period of 30 days or more.
"Rents and Profits" shall have the meaning ascribed to such term
in the Mortgage.
"S&P" shall mean Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Secondary Market Transaction" shall have the meaning given to
such term in the Mortgage.
"Servicer" shall mean a servicer or account administrator of the
Loan designated by and acting for the benefit of the Holder.
"Sweep Period" shall mean (i) any period during which the Debt
Service Coverage Ratio is less than 1.15 computed by Holder on a trailing twelve
month basis as of any date, (ii) the period during which a Mezzanine Note has
been issued and the outstanding balance has not been paid in full, (iii) if,
after July 27, 2003, (but said date shall only apply so long as Borrower uses
commercially reasonable efforts to enforce Section 4.2 of the "REA" as defined
in the Mortgage) either of the two ▇▇▇▇▇▇▇'▇ Department Stores located on the
land adjacent to the Property becomes vacant or fails to operate in accordance
with Section 4.2 of the REA, (iv) the period of time from the date which is
three months prior to the Anticipated Repayment Date to the occurrence of a
Mortgage Satisfaction Event or (v) the period of time from the occurrence of an
Event of Default to the occurrence of a Mortgage Satisfaction Event; provided,
however, that if such period commenced as a result of a monetary default and
Borrower tenders and Holder accepts, in its sole discretion, a cure of such
monetary default, then such period shall terminate upon Holder's acceptance of
such cure; provided, further, that in no event shall Holder be obligated to
terminate such period more than one (1) time in any twelve (12) month period
(the occurrence of any of items (i), (iii) or (v) is referred to as a "CASH
TRAP").
"Trust Account" shall mean a segregated trust account maintained
by a corporate trust department of a federal depository institution or a state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal Regulations Section
9.10(B) which has corporate trust powers and is acting in its fiduciary
capacity.
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(b) The meanings given to capitalized terms defined herein shall be
equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have the
respective meanings given to such terms in the Mortgage. Establishment of the
Cash Collateral Account.
Section 2. Establishment of the Cash Collateral Account.
(a) The Holder has established and will maintain while the Loan is
outstanding a cash collateral account (which may be a book-entry sub-account of
an Eligible Account) at the Deposit Bank (the "Cash Collateral Account") which
shall be entitled "FIRST UNION NATIONAL BANK as Mortgagee of Park Plaza Mall,
LLC Cash Collateral Account". In connection with a Secondary Market Transaction,
the Holder shall have the right to cause Deposit Bank to entitle the Cash
Collateral Account with such other designation as the Holder may select in its
reasonable discretion to reflect such assignment or transfer. The Holder shall,
or shall cause the Servicer to, cause the Deposit Bank to deposit into the Cash
Collateral Account, all Rents and Profits and other amounts transferred to the
Deposit Bank from the Clearing Bank.
(b) The Cash Collateral Account shall be an interest bearing account.
The interest rate with respect to funds held in the Cash Collateral Account
shall be the rate for such deposits as is customarily paid by the Deposit Bank
or Servicer, as applicable. All such interest income remaining in the Cash
Collateral Account shall be for the benefit of the Holder and credited to the
Cash Collateral Account. The Cash Collateral Account shall be assigned the
federal tax identification number of the Borrower, which number is __________.
Borrower shall provide Holder or the Deposit Bank, at any time upon request of
Holder, with a Form W-8 or W-9 to evidence Borrower is not subject to any
back-up withholding under the United States Internal Revenue Code. Prior to
application in accordance with the terms hereof, all amounts in the Cash
Collateral Account shall remain an asset of Borrower, subject to the lien and
security interest granted Holder hereunder, and subject to all of the terms and
conditions of this Agreement and the other Loan Documents.
(c) The following sub-accounts (collectively, the "Mortgage Sub-
accounts") of the Cash Collateral Account shall be maintained on a ledger-entry
basis:
(i) "Impound Sub-account";
(ii) "Monthly Debt Service Sub-account";
(iii) "Replacement Reserve Sub-account";
(iv) Operating Expense Sub-account'
(v) "Casualty and Condemnation Proceeds Sub-account";
(vi) "Borrower Remainder Sub-account".
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Amounts allocated to the Mortgage Sub-accounts shall be disbursed in
accordance with the terms of this Agreement and the Note.
(d) (i) During any Sweep Period, the Holder may deliver one or more
executed Instruction Letters to the Clearing Bank. The Borrower hereby agrees
that if the bank, bank location or account number of the Property Account is
changed prior to a Sweep Period, the Borrower shall, within five (5) Business
Days after such change, execute a replacement Instruction Letter to cover the
new bank, bank location and/or account, which replacement Instruction Letter
shall be in the form of the Instruction Letter annexed hereto as Exhibit A, with
such changes thereto as may be requested by such new Clearing Bank in order to
conform such Instruction Letter with such new bank's customary requirements. If
any Clearing Bank shall request any changes, modifications or supplements to any
Instruction Letter to conform to the Clearing Bank's customary practice or
requirements, as the same may change from time to time, then if such changes,
modifications or supplements are acceptable to Holder, Borrower shall execute
and deliver to Holder such instruments as the Clearing Bank shall request to
effectuate such modifications or changes. In the event the Borrower fails to
execute an Instruction Letter as provided above, Borrower hereby irrevocably
appoints the Holder as its attorney-in-fact (coupled with an interest) with full
authority to enter into replacement Instruction Letter(s) and to execute on
behalf of the Borrower any new modified Instruction Letter acceptable to the
proposed Clearing Bank and to execute on behalf of the Borrower the Lessee
Payment Direction Letters and the Payment Direction Letters described below. All
costs and expenses, including, but not limited to legal fees and disbursements,
incurred by the Holder to negotiate and execute any modified Instruction Letter
shall be paid by the Borrower.
(ii) At the election of the Holder, during any Sweep Period, within
ten (10) Business Days, the Borrower will establish a new Eligible Account
(which shall become the Clearing Account) at a bank selected by the Holder and
shall cause all funds in the existing Clearing Account to be transferred to the
new Clearing Account and any future Rents and Profits from the Property to be
deposited in such new Clearing Account.
(e) The Holder or the Servicer may (but shall not be obligated to)
direct the Deposit Bank to invest amounts allocated to the Cash Collateral
Account in Permitted Investments selected by the Holder. All earnings on such
Permitted Investments on funds allocated to in such Accounts (net, to the extent
applicable, of any interest income payable to Borrower as provided herein) shall
be for the benefit of the Servicer as additional servicing compensation. If the
Holder or Servicer elects to invest funds in such accounts in Permitted
Investments, then the Holder or Servicer, as applicable, shall have liability
for any loss in investments of funds that are invested in Permitted Investments
but no such loss or liability shall affect Borrower's obligations to make all
payments and deposits required to be made by Borrower under the Loan Documents.
(f) It is the intention of the parties hereto that the entire amounts
deposited in the Cash Collateral Account (or as much thereof as the Holder may
reasonably arrange to invest) may be invested in Permitted Investments, and, in
such event, that such Account shall be a so-called "zero balance" account. All
funds in such Account that are invested in a Permitted Investment are deemed to
be held in such Account for all purposes of the Mortgage and the other Loan
Documents.
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(g) In order to further secure the performance by the Borrower of the
Obligations and as a material inducement for the Holder to make the Loan in
accordance with the terms of the Loan Documents, the Borrower hereby (i)
requests that the Cash Collateral Account be established on its behalf at the
Deposit Bank in the names set forth above and (ii) acknowledges that (A) the
Cash Collateral Account will be subject to the sole dominion, control and
discretion of the Holder (which may be exercised through the Servicer), subject
to the terms, covenants and conditions of this Agreement and the Mortgage, (B)
the Holder shall have the sole right to make withdrawals or transfers of funds
from the Cash Collateral Account and (C) neither the Borrower nor any other
Person claiming on behalf of or through the Borrower shall have any right or
authority, whether express or implied, to make use of, or withdraw any funds,
investments or other properties from, the Cash Collateral Account, or to give
any instructions with respect to the Cash Collateral Account. Allocation and
Disbursement of Funds in the Cash Collateral Account.
Section 3. Allocation and Disbursement of Funds in the Cash Collateral Account.
(a) Commencing on the first Business Day of each Collection Period
on or after the commencement, and during the continuance of, a Sweep Period
occurring prior to the Anticipated Repayment Date, the Holder or the Servicer
shall allocate amounts deposited in the Cash Collateral Account from time to
time during such Collection Period in the order and priority set forth in
Section 1.06 of the Note. Commencing on or prior to the first Business Day of
each Collection Period beginning on or after the Anticipated Repayment Date, the
Lender or the Servicer shall allocate amounts deposited in the Cash Collateral
Account from time to time during such Collection Period in the order and
priority set forth in Section 1.07 of the Note.
(b) The Holder or the Servicer shall disburse:
(i) Amounts allocated to the Impound Sub-account on each
Payment Date for further disbursement therefrom as set forth in the Mortgage;
(ii) Amounts allocated to the Monthly Debt Service Sub-account
to the Holder on the related Payment Date;
(iii) Amounts allocated to the Replacement Reserve as set forth
in the Mortgage;
(iv) Amounts allocated to the Operating Expense Sub-account on
the last Business Day of each week to the following account:
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American National Bank
ABA#: ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇ (phone ▇▇▇-▇▇▇-▇▇▇▇)
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Account: Landau & ▇▇▇▇▇▇ of Arkansas Inc.
as Managing Agent - Operating Account
Account #: 5330232945
----------
(iv) Amounts allocated to the Borrower Remainder Sub-account on
the last Business Day of each week to the following account:
Bank: HSBC
ABA#: ▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Account: Park Plaza Mall, LLC
Account #: 0006946615
Section 4. Fees
(a) The Borrower agrees to pay the fees of the Servicer and the
Deposit Bank in accordance with the customary fees charged by the Deposit Bank
and the Servicer for the services described herein, as such fees are established
from time to time.
(b) Upon the request of the Borrower, the Holder shall cause the
Deposit Bank and the Servicer to include their fees in an account analysis
statement.
Section 5. Termination.
(a) The Holder may replace the Deposit Bank from time to time
with a new Deposit Bank upon five days' notice to the Borrower. The Borrower
hereby agrees that it shall take all reasonable action necessary to facilitate
the transfer of the respective obligations, duties and rights of the Deposit
Bank to the successor thereof selected by the Holder in its sole discretion.
(b) The Holder shall terminate this Agreement upon the occurrence
of a Mortgage Satisfaction Event and return to Borrower all monies then held in
the Cash Collateral Account after liquidating all Permitted Investments.
Section 6. Matters Concerning the Borrower.
(a) At the option of the Holder, the Holder may require one or
more of the following upon the commencement and during the continuation of any
Sweep Period:
(i) Pursuant to an instruction letter in the form of Exhibit
B hereto (a "Payment Direction Letter"), the Borrower or the Manager shall
immediately instruct each of the
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credit card companies with which the Borrower or the Manager has entered into
merchant's or other credit card agreements that all Rents and Profits payable
with respect to the Property, in accordance with such merchant's agreements or
otherwise, shall be transferred instead by wire transfer or the ACH System to
the Clearing Bank for deposit in the Clearing Account.
(ii) The Borrower or the Manager shall immediately instruct all
Persons that presently or hereafter maintain open accounts with Borrower or
the Manager or with whom the Manager or the Borrower presently or hereafter does
business on an "accounts receivable" basis with respect to the Property to
deliver all payments due under such accounts to the Clearing Bank at a lock box
address at the Clearing Bank (the "Lock Box Address") in the form of cashier's
checks or equivalent instruments for the payment of money. Neither the Borrower
nor the Manager shall direct any such Person to make payments due under such
accounts in any other manner.
(iii) Pursuant to an instruction letter in the form of Exhibit C
hereto (a "Lessee Payment Direction Letter"), the Borrower or the Manager shall
immediately notify and advise each tenant of the Property (collectively, the
"Tenants") under each lease with respect to the Property (whether such lease is
presently effective or executed after the date hereof), to send directly to the
lockbox address at the Clearing Bank promptly when due all payments, whether in
the form of checks, cash, drafts, money orders or any other type of payment
whatsoever of rent or any other item payable to the Borrower as landlord under
such Leases. The foregoing requirements need not be satisfied with respect to
any Lease executed after the date hereof to the extent the terms and conditions
of the Lessee Payment Direction Letter are incorporated in the applicable Lease.
(iv) If notwithstanding the provisions of this Section 6(a),
Borrower or Manager (or any affiliate thereof) receives any Rents and Profits
then (x) Borrower or Manager (or such affiliate) shall be deemed to hold such
Rents and Profits in trust for Holder and (y) the Borrower and the Manager shall
deposit with the Clearing Bank within one Business Day of receipt all such Rents
and Profits received by the Borrower or the Manager (or such affiliate).
(b) Upon request of Holder, Borrower shall deliver to Holder such
evidence as Holder may reasonably request to evidence that Borrower is
complying with the provisions of this Section 6(a). Without the prior written
consent of the Holder, neither the Borrower nor the Manager shall (i) terminate,
amend, revoke or modify any Lessee Payment Direction Letter in any manner or
(ii) direct or cause any Tenant to pay any amount in any manner other than as
provided specifically in the related Lessee Payment Direction Letter.
(c) The Borrower hereby pledges, transfers and assigns to the Holder,
and grants to the Holder, as additional security for the payment and performance
of the Obligations, a continuing perfected first priority security interest in
and to, and a first lien upon, (i) the Cash Collateral Account, the Clearing
Account, the Property Account and all of the Borrower's right, title and
interest in and to all cash, property or rights transferred to or deposited
therein from time to time, (ii) all earnings, investments and securities held in
the Cash Collateral Account in accordance with this Agreement and (iii) any and
all proceeds of the foregoing. This Agreement and the pledge, assignment and
grant of security interest made hereby shall secure payment of all amounts
payable by the Borrower to the Holder under the Note and the other Obligations.
The
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Borrower acknowledges that the Servicer, Clearing Bank and Deposit Bank are
acting as the agent of, and at the direction of, the Holder in connection with
the subject matter of this Agreement. The Borrower further agrees to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as the Holder may
reasonably require in order to effectuate, assure, convey, secure, assign,
transfer and convey unto the Holder any of the rights granted by this Agreement
and to more fully perfect and protect any lien or security interest granted
hereby.
(d) In its sole discretion, the Borrower may, from time to time
deposit amounts into the Cash Collateral Account in respect of any Mortgage
Sub-account from sources of the Borrower other than those received by the
Clearing Bank with respect to the then-current Collection Period; provided, that
if the Borrower deposits such amounts, the amounts deposited shall be subject to
all of the terms hereof as if not separately deposited by the Borrower, and may
not be withdrawn except as otherwise provided for in this Agreement. Nothing
contained herein shall impair or otherwise limit Borrower's obligations to
timely make the payments (including, without limitation, interest and principal)
required by the Note, the Mortgage and the other Loan Documents, it being
understood that such payments shall be so timely made in accordance with the
Loan Documents regardless of the amounts on deposit in the Clearing Account
and/or Cash Collateral Account.
(e) The Borrower hereby covenants and agrees that amounts allocated
to the Operating Expense Sub-account with respect to the payment of operating
expenses or capital expenditures shall be used only for payment of checks made
by the Borrower for the payment of expenses incurred in the ordinary course of
business of the ownership and operation of the Property or for the payment of
expenditures approved by the Holder.
(f) If the actual Operating Expenses paid during any Collection
Period are less than the amount transferred to the Operating Account during such
Collection Period, the amount of such difference shall promptly be deposited by
Borrower back into the Cash Collateral Account, in any event no later than
twenty (20) days after the end of the applicable Collection Period, such amount
to be applied in accordance with the Annual Budget then applicable when such sum
is redeposited into the Cash Collateral Account. Within twenty (20) days after
the end of each Collection Period, Borrower shall prepare and deliver to Holder
a financial statement in form and substance satisfactory to Holder in all
material respects setting forth all amounts expended for Operating Expenses
during such Collection Period, including showing variances from budget and
setting forth a short explanation of any variance in excess of ten percent (10%)
of the budget line item in question and identifying any payment made to an
affiliate and the reasons therefor. Each such financial statement shall be
certified by an officer of Borrower as being true, correct and complete in all
material respects and include a certification that all amounts transferred to
the Operating Account pursuant to this Agreement were expended for Operating
Expenses in accordance with this Agreement or have been or are being returned to
the Cash Collateral Account as provided above. Borrower shall promptly deliver
to Holder such further documentation (including, without limitation, invoices,
canceled checks or copies of contracts) and information as Holder may reasonably
request regarding any payments described in Borrower's financial statements. If
Borrower shall fail to deposit any excess funds in the Cash Collateral Account
or provide its required financial statements or, after written request of
Holder, evidence of expenditures, in each case, within the time periods provided
in the preceding
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sentences and such failure continues for ten (10) or more days after notice of
such failure, then in addition to any other remedies which Holder may have with
respect thereto, Holder may elect not to fund the Operating Expense Sub-account
from monies in the Cash Collateral Account or Holder may continue to hold the
funds in the Operating Expense Sub-account until such failure is cured.
Section 7. Certain Matters Regarding the Holder.
(a) The parties agree that the Deposit Bank shall pay over to the
Holder all amounts deposited in any account maintained hereunder on demand,
without notice to the Borrower, provided, that in making such demand, the Holder
gives notice, in writing, signed by the Holder or an authorized agent thereof,
that an Event of Default under the Mortgage has occurred and is continuing.
Notwithstanding the foregoing, the Borrower shall not be deemed to have waived
any rights the Borrower may have against the Holder if it is determined that the
Holder acted improperly.
(b) Holder may exercise in respect of the Collateral all rights
and remedies available to Holder hereunder or under the other Loan Documents or
otherwise available at law or in equity. Without limiting the generality of the
foregoing or the provisions of paragraph (a) above, upon the occurrence and
during the continuance of an Event of Default, Borrower acknowledges and agrees
that it will have no further right to request or otherwise require Holder to
disburse funds from the Clearing Account or the Cash Collateral Account in
accordance with the terms of this Agreement, it being agreed that Holder may, at
its option, (i) direct the Deposit Bank to continue to hold the funds in the
Cash Collateral Account and/or (ii) continue from time to time to apply all or
any portion of the funds held in the Cash Collateral Account to any payment(s)
which such funds could have been applied to prior to such Event of Default, to
the extent and in such order and manner as Holder in its sole discretion may
determine, and/or (iii) direct that the Deposit Bank or Clearing Bank from time
to time disburse all or any portion of the funds held in the Cash Collateral
Account or other Collateral then or thereafter held by the Deposit Bank or
Clearing Bank, as applicable, to Holder, in which event Holder may apply the
funds held in the Cash Collateral Account or other Collateral to the Obligations
in any order and in such manner as Holder may determine in its sole discretion.
(c) Upon the occurrence and during the continuance of any Event o
f Default, Holder may, at any time or from time to time, collect, appropriate,
redeem, realize upon or otherwise enforce its rights with respect to the
Collateral, without notice to Borrower and without the need to institute any
legal action, make demand, exhaust any other remedies or otherwise proceed to
enforce its rights.
(d) No failure on the part of Holder to exercise, and no delay
in exercising, any right under this Agreement shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right under this Agreement
or the other Loan Documents. The remedies provided in this Agreement, the Note,
the Mortgage and the other Loan Documents are cumulative and not exclusive of
any remedies provided at law or in equity.
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Section 8. Casualty and Condemnation Proceeds Sub-account.
Notwithstanding anything to the contrary contained herein during any
Sweep Period, the following items of Rents and Profits shall be deposited and
held in the Mortgage Sub-accounts described below and shall be applied in the
order of priority set forth in this Section 8, and Borrower shall advise Holder
at the time of receipt thereof of the nature of such Receipt so that Holder
shall have sufficient time to instruct the Deposit Bank to deposit and hold such
amounts in the appropriate Mortgage Sub-account:
(a) Proceeds of any insurance, including, without limitation, rent
or business interruption insurance, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Holder or Servicer to the Deposit Bank) in accordance with the
provisions of the Mortgage applicable thereto.
(b) Condemnation awards, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Holder or Servicer to the Deposit Bank) in accordance with the
provisions of the Mortgage applicable thereto.
Section 9. Successors and Assigns; Assignments; Agents.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by the Borrower, the Holder and the Manager and their respective
successors and assigns.
(b) The Holder shall have the right to assign or transfer rights
and obligations under this Agreement without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded the Holder under this
Agreement; provided, that such assignee or transferee shall upon written request
deliver to the other parties hereto written confirmation that such assignee or
transferee agrees to be bound by the terms of this Agreement and is also the
assignee or transferee of the Note and the other Loan Documents.
(c) The Borrower shall have the right to assign and transfer its
rights and obligations hereunder only with the prior written consent of the
Holder.
(d) Any duties or actions of the Holder hereunder may be
performed by the Holder or its agent(s), including without limitation, any
Servicer or trustee in a Secondary Market Transaction, which includes the Loan.
Section 10. Amendment.
This Agreement may be amended from time to time in writing by all parties
hereto. All amendments to this Agreement shall be in writing.
Section 11. Notices.
Notices to the parties hereto shall be addressed and delivered in the
manner set forth in the Mortgage. Unless otherwise expressly provided herein,
all such notices, to be effective, shall be in writing (including by facsimile),
and shall be deemed to have been duly given or made (a) when delivered by hand
or by nationally recognized overnight carrier, (b) upon
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receipt after being deposited in the mail, certified mail and postage prepaid or
(c) in the case of facsimile notice, when sent and electronically confirmed,
addressed as set forth above with a confirmatory copy to follow by regular mail.
Section 12. Limitation on Liability.
Holder shall not be liable for any acts, omissions, errors in judgment or
mistakes of fact or law, including, without limitation, acts, omissions, errors
or mistakes with respect to the Collateral, except for those arising as a result
of Holder's active gross negligence or willful misconduct. Without limiting the
generality of the foregoing, except as otherwise expressly provided for herein
or as required by applicable law, Holder shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not Holder has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other right pertaining to any Collateral. Holder is hereby
authorized by Borrower to act on any written instruction believed by Holder in
good faith to have been given or sent by Borrower.
Section 13. Mortgagee-in-Possession.
Borrower hereby confirms and agrees that notwithstanding the provisions
of this Agreement, Borrower retains sole control of the operation and
maintenance of the Property, subject to the obligations of Borrower under the
Mortgage, the Mortgage, the Assignment of Leases and Rents and the other Loan
Documents, and Holder is not and shall not be deemed to be a mortgagee in
possession.
Section 14. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this CASH MANAGEMENT
AGREEMENT in several counterparts (each of which shall be deemed an original)
as of the date first above written.
PARK PLAZA MALL, LLC, a Delaware
limited liability company
By: Park Plaza 3, LLC, a Delaware limited
liability company, its general manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
FIRST UNION NATIONAL BANK
a national banking association
By:
--------------------------
Name:
Title:
LANDAU & ▇▇▇▇▇▇ OF ARKANSAS, INC.,
an Arkansas corporation
By:
------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have executed this CASH MANAGEMENT
AGREEMENT in several counterparts (each of which shall be deemed an original)
as of the date first above written.
PARK PLAZA MALL, LLC, a Delaware
limited liability company
By: Park Plaza 3, LLC, a Delaware limited
liability company, its general manager
By:
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
FIRST UNION NATIONAL BANK
a national banking association
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
LANDAU & ▇▇▇▇▇▇ OF ARKANSAS, INC.,
an Arkansas corporation
By:
------------------------
Name:
Title:
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IN WITNESS WHEREOF, the parties hereto have executed this CASH MANAGEMENT
AGREEMENT in several counterparts (each of which shall be deemed an original)
as of the date first above written.
PARK PLAZA MALL, LLC, a Delaware
limited liability company
By: Park Plaza 3, LLC, a Delaware limited
liability company, its general manager
By:
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
FIRST UNION NATIONAL BANK
a national banking association
By:
--------------------------
Name:
Title:
LANDAU & ▇▇▇▇▇▇ OF ARKANSAS, INC.,
an Arkansas corporation
By: [SIG]
------------------------
Name:
Title:
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EXHIBIT A
CLEARING BANK INSTRUCTION LETTER
___________ __, 1999
Re:
Ladies and Gentlemen:
Park Plaza Mall, LLC (the "Borrower") has entered into a Mortgage and
Security Agreement, dated as of April __, 2000 (the "Mortgage"), with FIRST
UNION NATIONAL BANK (together with its successors and assigns, the "Holder"),
pursuant to which the Holder has provided financing to the Borrower secured by
certain mortgages and/or deeds of trust on certain properties owned by the
Borrower, including the property described in the caption of this letter (the
"Property"). The Property is currently being managed by the Landau & ▇▇▇▇▇▇ (the
"Manager").
Currently, the Borrower maintains the following account (the "Property
Account") with you:
Name:
Account
The Borrower hereby notifies you that the Holder has required that it
implement certain automatic clearing and processing functions and hereby
instructs you, commencing on [ ], 200 [ ] (the "Sweep Commencement Date"),
to disburse all revenues from the Property ("Revenues") deposited in the
Property Account from time to time in accordance with the following terms and
provisions:
Promptly upon receipt of this letter, you shall establish a post office
box address in which the Borrower shall cause all Revenues in the form of
checks, money orders and similar instruments to be deposited. Within one
Business day (as defined below) of receipt, you, as the "Clearing Bank," shall
receive and process all Revenues and shall deposit the same into the Property
Account referred to above, which Property Account, or an appropriate
substitution or replacement thereof, shall thereafter be referred to as the
"Clearing Account." Checks made payable to the Borrower, the Manager, the
Property or the Clearing Account shall be deemed suitable for deposit in the
Clearing Account. Items deposited with Clearing Bank that are returned for
insufficient or uncollected funds will be redeposited the first time. Items
returned unpaid a second time shall be processed in accordance with the standard
procedures of the Clearing Bank.
The Clearing Account shall be an account of the Borrower but shall be
under the sole dominion and control of the Holder and any servicer (a
"Servicer") or other designee of the
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Holder named below or in a subsequent written notice from the Holder.
The Clearing Account shall be assigned the federal tax identification number of
the Borrower, which number is ______________. You shall hold amounts on deposit
in the Clearing Account as agent for the Holder and shall not commingle such
amounts with any other amounts held by you on behalf of the Holder, the Borrower
or any other person or entity. If, in accordance with standard operating
procedures, the Clearing Account may be established as a trust account for the
benefit of the Holder, Borrower directs that the Clearing Account be maintained
as such an account.
The Borrower hereby notifies the Clearing Bank that, in accordance with
the Mortgage, the Clearing Account and all amounts held therein from time to
time, and all renewals, replacements and substitutions therefor, have been
irrevocably pledged to the Holder as additional security for the loan evidenced
by the Mortgage. In connection with such pledge, the Borrower hereby waives all
right of withdrawal from the Clearing Account.
The Borrower hereby irrevocably instructs and authorizes you, beginning
on the first business day after the Sweep Commencement Date, to disburse on the
last business day of each week via the ACH System, if available, or otherwise by
wire transfer, all amounts constituting available funds on deposit in the
Clearing Account to the following account:
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
If transferring such amounts by the ACH System and if required by
Clearing Bank, each such transfer shall be initiated by the Holder or by the
Servicer. If the Clearing Bank provides electronic data transfer services, the
Clearing Bank shall provide the Holder and the Servicer access to the Clearing
Bank's electronic data transfer system for purposes of effecting such transfers.
At any time that funds may not be transferred as described above in this
paragraph, the Clearing Bank shall transfer amounts by wire transfer of
immediately available funds.
The instructions set forth herein are irrevocable and are not subject to
modification in any manner, except that the Holder or the Servicer may, by
written notice to you, amend the instructions contained herein.
In the event that the Clearing Bank fails to acknowledge that its
procedures with respect to the Property Account are governed by this letter due
to an objection to the terms hereof or otherwise, the Borrower hereby appoints
the Holder as its attorney-in-fact with full authority to make changes to this
letter and to execute on behalf of the Borrower any new modified letter
acceptable to the proposed Clearing Bank.
Matters not covered by this letter shall be determined in accordance with
the customary procedures of the Clearing Bank and in the event of a conflict
between the terms of this letter and the customary procedures of the Clearing
Bank, the terms of this letter shall govern.
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The undersigned also notifies you that the name and address of the
current Servicer with respect to the Cash Management Agreement is:
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
If you have any questions concerning this letter or the Cash Management
Agreement, please contact
------------------- of the Holder at
( ) or of the Servicer at
---------------------------- ------------------------
.
--------------------------
The address of the current Manager is:
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
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21
Please acknowledge receipt of this letter and your agreement to the terms
described herein by executing and returning to the Borrower an acknowledgment
in the form of Schedule 1 hereto.
PARK PLAZA MALL, LLC,
a Delaware limited liability company
By: Park Plaza 3, LLC,
a Delaware limited liability company,
its general manager
By:
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
ACKNOWLEDGED AND AGREED:
-------------------------------
By:
---------------------------
Name:
Title:
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22
SCHEDULE 1
FORM OF ACKNOWLEDGMENT
[DATE]
[Borrower]
[Holder]
Reference is made to that certain Clearing Bank Instruction Letter dated
____, 199[ ] (the "Instruction Letter") from [________________________] (the
"Borrower"). I, _____________ , on behalf of ______________________(the "Bank"),
hereby acknowledge receipt of the instructions set forth in the Instruction
Letter and notice of the pledges and security interest described therein. The
Bank hereby agrees to perform the instructions set forth in the Instruction
Letter upon the delivery by [____________________________ ] (the "Holder") of
the Instruction Letter.
[BANK]
By:
---------------------------------
Name:
Title:
LOCK BOX ADDRESS:
---------------------------------------------
---------------------------------------------
---------------------------------------------
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EXHIBIT B
FORM OF PAYMENT DIRECTION LETTER
[MANAGER LETTERHEAD]
[Date]
[Addressee]
Re: Payment Direction Letter for [Property]
Dear [ ]:
[BORROWER] (the "Owner"), the owner of the [PROPERTY] (the "Property"),
has mortgaged the Property to __________________________ (together with its
successors and assigns, the "Holder") and has agreed that all Rents received
with respect to the Property will be paid directly to a bank selected by the
Holder. Therefore, from and after [DATE], please remit all payments due to the
[Owner] [MANAGER], the manager of the Property (the "Manager"),] [under that
certain [REFERENCE AGREEMENT], dated [_______], 199[__] (the "Agreement")
between the [Owner][Manager] and you, as follows:
(1) If paying by check, money order or other instrument, please
mail such items to the following address:
[CLEARING BANK]
[Lockbox Address]
All checks or other instruments should be made out to the name of the
"[PROPERTY]"; or
(2) Transfer such amounts by the ACH System or wire transfer to
the following account:
[CLEARING BANK]
ABA#
Attn:
Fax:
Account of:
Account #
------------------------
These payment instructions cannot be withdrawn or modified without the
prior written consent of the Holder or its agent (the "Servicer"), or pursuant
to a joint written instruction from the Borrower and the Holder or the Servicer.
Until you receive written instructions from the Holder or the Servicer, continue
to send all payments due under the
B-1
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Agreement to [CLEARING BANK]. All payments due under the Agreement shall be
remitted to [CLEARING BANK] no later than the day on which such amounts are due.
If you have any questions concerning this letter, please contact
[_________] at [___________]. We appreciate your cooperation in this matter.
Sincerely,
[OWNER] [MANAGER]
By:
------------------------------
Name:
Title:
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EXHIBIT C
FORM OF LESSEE PAYMENT DIRECTION LETTER
[MANAGER LETTERHEAD]
[Date]
[Addressee]
Re: Payment Direction Letter for [Property]
Dear [ ]:
[BORROWER], the owner of the [PROPERTY] (the "Property"), has mortgaged
the Property to ________________ (together with its successors and assigns, the
"Holder") and has agreed that all Rents and Profits due for the Property will be
paid directly to a bank selected by the Holder. Therefore, from and after
[DATE], all rent to be paid by you under the [LEASE] between you and
[BORROWER/MANAGER] (the "Lease") should be sent directly to the following
address:
[CLEARING BANK]
[Lockbox Address]
All checks should be made out to the "[PROPERTY]".
These payment instructions cannot be withdrawn or modified without the
prior written consent of the Holder or its agent (the "Servicer"), or pursuant
to a joint written instruction from the Borrower and the Holder or the Servicer.
Until you receive written instructions from the Holder or the Servicer, continue
to send all rent payments due under the Lease to [CLEARING BANK]. All rent
payments must be delivered to [CLEARING BANK] no later than the day on which
such amounts are due under the Lease.
If you have any questions concerning this letter, please contact
[_________] at [________]. We appreciate your cooperation in this matter.
[MANAGER]
By:
------------------------------
Name:
Title:
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