<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-12002
MARK CENTERS TRUST
(Exact name of registrant in its charter)
MARYLAND 23-2715194
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 THIRD AVENUE, KINGSTON, PENNSYLVANIA 18704
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(717) 288-4581
Indicate by check mark whether the registrant (1) has filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
As of August 12, 1996, there were 8,548,817 common
shares of beneficial interest, par value $.001
per share, outstanding.
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MARK CENTERS TRUST
FORM 10-Q
INDEX
Part I: Financial Information Page
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets as of
June 30, 1996 and as of December 31, 1995 1
Consolidated statements of operations for
the three and six months ended
June 30, 1996 and 1995 2
Consolidated statements of cash flows for
the six months ended June 30, 1996 and 1995 3
Notes to consolidated financial statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Part II:Other Information
Signatures 22
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Part I. Financial Information
Item 1. Financial Statements
MARK CENTERS TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1996 1995
ASSETS (audited)
Rental property - at cost:
Land $ 30,176 $ 25,270
Buildings and improvements 258,371 258,827
Construction-in-progress 10,914 7,060
-------- --------
299,461 291,157
Less accumulated depreciation 66,859 61,269
-------- --------
Total rental property 232,602 229,888
Cash and cash equivalents 732 3,068
Rents receivable - less allowance
for doubtful accounts of $570 and
$509, respectively 5,024 5,200
Prepaid expenses 822 1,352
Due from related parties 289 384
Furniture, fixtures and equipment,
net 670 796
Deferred charges 7,455 4,905
Tenant security and other deposits 1,757 3,922
------- -------
$249,351 $249,515
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $108,597 $107,975
Lines of credit 46,175 43,853
Accounts payable and accrued expenses 14,507 7,058
Accrued contingent payable to
Principal Shareholder -- 6,156
Note payable to Principal Shareholder 3,174 --
Rents received in advance and tenant
security deposits 994 1,466
------- -------
Total Liabilities 173,447 166,508
------- -------
Minority interest 12,090 13,228
------- -------
Shareholders' equity:
Common shares, $.001 par value,
authorized 50,000,000 shares, issued
and outstanding 8,548,817 shares 9 9
Additional paid-in capital 63,805 69,770
Retained earnings -- --
------- -------
Total Shareholders' Equity 63,814 69,779
------- -------
$249,351 $249,515
======= =======
See accompanying notes to consolidated financial statements
1
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MARK CENTERS TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 1996 AND 1995
(in thousands except for per share data)
Three months ended Six months ended
6/30/96 6/30/95 6/30/96 6/30/95
Revenue:
Minimum rents $ 8,259 $8,197 $16,725 $16,045
Percentage rents 614 808 1,216 1,577
Additional rents-
expense reimbursements 1,607 1,384 3,551 2,924
Other 239 242 462 501
------- ------- ------- -------
Total revenue 10,719 10,631 21,954 21,047
------- ------- ------- -------
Expenses:
Property operating 2,274 2,075 5,091 4,280
Real estate taxes 1,368 1,176 2,666 2,295
Depreciation and
amortization 3,269 2,932 6,471 5,785
General and
administrative expenses 714 728 1,472 1,412
------- ------- ------- -------
Total operating expenses 7,625 6,911 15,700 13,772
------- ------- ------- -------
Operating income 3,094 3,720 6,254 7,275
Gain on sale of land -- 94 -- 94
Interest and financing
expenses 3,076 2,600 6,050 4,954
------- ------- ------- -------
Income before minority
interest 18 1,214 204 2,415
Minority interest (22) (227) (74) (443)
------- ------- ------- -------
Net (loss) income $ (4) $ 987 $ 130 $ 1,972
======= ======= ======= =======
Net (loss)income per
common share $ .00 $ .12 $ .02 $ .23
======= ======= ======= =======
Cash dividend per
common share $ .36 $ .36 $ .72 $ .72
======= ======= ======= =======
See accompanying notes to consolidated financial statements
2
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MARK CENTERS TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,1996 AND 1995
(in thousands)
June 30, June 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 130 $ 1,972
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization of leasing
costs 6,002 5,310
Amortization of deferred financing costs 469 475
Minority interest 74 443
Provision for bad debts 574 321
Gain on sale of land -- (94)
Other 56 94
------- -------
7,305 8,521
Changes in assets and liabilities:
Rents receivable (398) 592
Prepaid expenses 530 260
Due from related parties 95 483
Tenant security and other deposits 151 (1,191)
Accounts payable and accrued expenses 1,197 (266)
Rents received in advance and tenant
security deposits (472) (462)
------- -------
Net cash provided by operating activities 8,408 7,937
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for real estate and improvements(11,305) (7,054)
Increase (decrease)in accounts payable
related to construction in progress 6,252 (2,992)
Payment to Principal Shareholder for
acquisition of land -- (1,500)
Net proceeds from sale of land -- 104
Deferred leasing and other charges (2,951) (1,073)
Expenditures for furniture, fixtures and
equipment -- (80)
------- -------
Net cash used in investing activities (8,004) (12,595)
------- -------
3
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CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on mortgages (2,433) (47,532)
Proceeds received on mortgage notes 5,377 60,500
Reduction in debt service escrow 2,014 --
Payment of deferred financing costs (335) (538)
Dividends paid (6,151) (6,146)
Distributions to Principal Shareholder (1,212) (1,229)
------- ------
Net cash (used in) provided by
financing activities (2,740) 5,055
------- -------
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (2,336) 397
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,068 3,021
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 732 $ 3,418
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest, net
of $449 and $618, respectively $ 5,867 $ 4,866
======= =======
The following is a summary of the resolution of certain
transactions with the Principal Shareholder (Note 4):
Reduction in contingent liability due to
Principal Shareholder $(6,156)
Establishment of note payable to Principal
Shareholder 3,174
------
Net reduction in cost of acquired property $(2,982)
=======
See accompanying notes to consolidated financial statements
4
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The consolidated financial statements include the consolidated
accounts of Mark Centers Trust (the "Company") and its majority
owned partnerships, including Mark Centers Limited Partnership
(the "Operating Partnership"), and have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with instruction to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. The information furnished in the accompanying
consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for a fair
presentation of the aforementioned consolidated financial
statements for the interim periods. Operating results for the
six month period ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the fiscal
year ended December 31, 1996.
The aforementioned consolidated financial statements should be
read in conjunction with the notes to the aforementioned
consolidated financial statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations.
2. ORGANIZATION AND FORMATION OF THE COMPANY
The Company was formed as a Maryland Real Estate Investment Trust
("REIT") on March 4, 1993 by Marvin L. Slomowitz (the "Principal
Shareholder"), the principal owner of Mark Development Group (the
"Predecessor"), to continue the business of the Predecessor in
acquiring, developing, renovating, owning and operating shopping
center properties. The Company effectively commenced operations
on June 1, 1993 with the completion of its initial public
offering, whereby it issued an aggregate of 8,350,000 common
shares of beneficial interest to the public at an initial public
offering price of $19.50 per share (the "Offering"). The
proceeds of the Offering were used to repay certain property-
related indebtedness, for costs associated with the Offering and
transfer of the properties to the Company and for working
capital. The acquisition of the properties was recorded by the
Company at the historical cost reflected in the Predecessor's
financial statements since these transactions were conducted with
entities deemed to be related parties.
5
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Company currently owns and operates thirty-nine properties
consisting of thirty-four neighborhood and community shopping
centers, three enclosed malls and two mixed use (retail/office)
properties. In addition, the Company currently has one community
shopping center under construction in New Castle, Pennsylvania.
All of the Company's assets are held by, and all of its
operations are conducted through, the Operating Partnership. The
Company will at all times be the sole general partner of, and
owner of a 51% or greater interest in, the Operating Partnership.
In excess of 99% of the minority interest in the Operating
Partnership is owned by the Principal Shareholder who is the
principal limited partner of the Operating Partnership.
3. SHAREHOLDERS' EQUITY AND MINORITY INTEREST
The following table summarizes the change in the shareholders'
equity and minority interest since December 31, 1995:
(in thousands)
Shareholders' Minority
Equity Interest
Balance at December 31, 1995 $69,779 $13,228
Income for the period January 1 through
June 30, 130 74
Vesting of restricted shares 56 --
Distributions to Principal Shareholder -- (1,212)
Dividends paid, $.36 per share (6,151) --
------- -------
Balance at June 30, 1996 $63,814 $12,090
======= =======
6
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. RELATED PARTY TRANSACTIONS
As of June 30, 1996 amounts due from related parties consisted of
the following (in thousands):
Accrued management fees due from Principal
Shareholder for certain operating properties
owned by the Principal Shareholder $ 28
Accrued ground rent due from Blackman Plaza
Partners (a limited partnership in which the
Principal Shareholder is a 1% general partner) 261
----
$289
====
Concurrent with the Offering, the Company obtained acquisition
options to acquire six properties that were under development
("Development Properties") by the Principal Shareholder
("Acquisition Options"). Upon exercising an option, the Company
immediately obtained title, completed all development and,
depending on the Company's return on its investment, was to pay
the Principal Shareholder all or a portion of an amount (the
"Contingent Payment Amount") equal to (i) land acquisition costs,
(ii) third party development costs, (iii) allocated overhead
expenses and (iv) leasing commissions for all tenant leases
signed prior to the Offering, and also was to pay an incentive
payment equal to 5% of construction costs (excluding engineering,
architectural and other "soft" costs). The Contingent Payment
Amount was to be reduced proportionately to the extent that,
within two years after completion of construction, the annualized
net operating income derived from operation of the properties as
to which options had been exercised did not generate a return on
the Company's investment of at least 13.5%, giving effect to the
payment of the Contingent Payment Amount.
In February 1996, the Board of Trustees of the Company and the
Principal Shareholder agreed to terminate all outstanding
Acquisition Options (other than the Acquisition Option pertaining
to the New Castle property which had been terminated in May
1995), execute a new agreement as to the Development Property for
which the Acquisition Option had been previously exercised and
construction suspended, and review the purchase price for the
properties for which Acquisition Options had been previously
exercised and construction completed.
7
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. RELATED PARTY TRANSACTIONS, continued
The Principal Shareholder's and Board's decision was intended to
eliminate the appearance of potential conflicts of interest
arising between the Principal Shareholder and the Company in the
context of the Acquisition Options, and to eliminate potential
disputes arising from the complex manner in which the
reimbursement to the Principal Shareholder for the Development
Properties was calculated.
As a result of this decision, the Company and the Principal
Shareholder have executed agreements for the following:
The Principal Shareholder has repurchased the Columbia Towne
Centre, located in Hudson, New York, from the Company for a
purchase price of $3,065,073.
The Company has purchased the Union Plaza, located in New Castle,
Pennsylvania, from the Principal Shareholder for a purchase price
of $4,500,000. This represents the amount the Principal
Shareholder had invested in the property, which was less than the
value of the property as determined by an independent appraiser.
The Company has completed its review of any payments due the
Principal Shareholder for the acquisition of the Route 6 Mall
(located in Honesdale, Pennsylvania) and the Bradford Towne
Centre (located in Towanda, Pennsylvania) which are completed and
currently operating, and the conveyance of approximately two
acres of land by the Principal Shareholder which became part of
the Route 6 Mall. As a result, the Company and Principal
Shareholder terminated the Acquisition Options for these
Development Properties and agreed to pay the Principal
Shareholder $1,600,000.
As a result of these transactions and to reflect the net result
of the purchase and sales price for these properties, the Company
has issued a note payable to the Principal Shareholder for the
principal sum of $3,030,427. The note, which bears interest at a
rate equal to that charged by Fleet Bank, N.A. on the Company's
revolving line of credit facility, is payable in full the earlier
of (i) two years following the date the Union Plaza is completed
or (ii) on June 12, 1999. Since the payment to the Principal
Shareholder reflects in part land acquisition costs associated
8
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
4. RELATED PARTY TRANSACTIONS, continued
with the property, the Company has agreed with the Principal
Shareholder to prepay the principal sum with any construction
loan proceeds specifically allocable from land acquisition. The
committed financing with First Western Bank, N.A. (see "Liquidity
and Capital Resources") will not provide any proceeds allocable
to land acquisition.
As of June 1996, The Company and Principal Shareholder had
terminated the two remaining unexercised Acquisition Options for
the Dallas, Pennsylvania and Gettysburg, Pennsylvania properties.
Furthermore, as of June 1996, the Company and Principal
Shareholder had terminated all remaining management agreements
for properties in which the Principal Shareholder holds an
interest.
5. LINE OF CREDIT
On June 14, 1996, the Company amended its line of credit facility
with Firstrust Bank by increasing the principal amount from $6.0
to $7.5 million, extending the maturity date to June 30, 1997,
modifying the interest rate to the higher of 8.75% or Firstrust
Bank's commercial reference rate plus 1/2% and requiring monthly
principal payments of $50,000 commencing January 1, 1997. A
mortgage on Troy Plaza has been added to the existing mortgages
on three properties as additional security for the facility.
6. PER SHARE DATA
Primary earnings per share are computed based on 8,561,294 and
8,569,143 shares outstanding, which represent the weighted
average number of shares outstanding (including restricted
shares) during the six month periods ended June 30 1996 and 1995,
respectively. Fully diluted earnings per share is based on an
increased number of shares that would be outstanding assuming the
exercise of share options at the market price at the end of the
period. Since fully diluted earnings per share is not materially
dilutive or is anti-dilutive, such amounts are not presented.
7. SUBSEQUENT EVENTS
On July 12, 1996, the Company obtained a $2,000,000 mortgage loan
from the First Federal Savings Bank of New Smyrna. The note,
which is secured by a mortgage on the New Smyrna Beach Shopping
Center, requires monthly payments of interest at 9.25% and
principal amortized over a fifteen year period and matures on
July 12, 2001.
On August 12, 1996, the Board of Trustees of the Company approved
and declared a quarterly dividend for the quarter ended June 30,
1996 of $0.36 per common share. The dividend is to be paid on
October 11, 1996 to the shareholders of record as of August 26,
1996.
9
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MARK CENTERS TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
7. SUBSEQUENT EVENT, continued
On August 12, 1996, the Company signed a commitment letter with
Morgan Stanley Mortgage Capital, Inc. for a mortgage loan in the
maximum amount of $49,500,000. The facility, which will be
secured by a first mortgage on 18 of the Company's properties,
will bear interest equal to the 10-year United States Treasury
rate as of the loan closing date plus 225 basis points. The loan
will require monthly payments of interest and principal
amortized over a 25 year period with a maturity of 10 years.
Approximately $36.5 million of the proceeds will be used to
retire existing debt, and $5.5 million of the proceeds will
satisfy all costs and related escrows. The remaining proceeds
will be available for working capital. The Company will be
subject to certain affirmative and negative covenants, including
the maintenance of a debt service coverage ratio. Funding is
subject to execution of definitive documentation.
On August 12, 1996, the Company signed a commitment letter with First
Western Bank, N.A. (the "Lender") for a construction loan (the
"Loan") in the maximum amount of $12.0 million for construction
of the Union Plaza in New Castle, Pennsylvania. Of the loan
amount, $3.0 million will be available based on leases currently
in place with an additional $2.0 million to be made available
contingent on certain additional leases being executed. The
remaining $7.0 million will be made available upon the Company
issuing an irrevocable letter of credit for $7.0 million. During
the construction period the Loan will require monthly payments of
interest at the Lender's prime rate plus 1%. Following the
construction period, the Loan will provide for an option to
convert from a variable rate of interest to a fixed rate and in
addition will require the monthly payment of principal amortized
over a 15 year period. The Loan will mature on March 1, 2013, and
is to be secured by a mortgage on the Union Plaza. The Company
will be subject to certain affirmative and negative covenants,
including the maintenance of a debt service coverage ratio.
Funding is subject to execution of definitive documentation.
10
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion is based on the consolidated financial
statements of Mark Centers Trust (the "Company") as of June 30,
1996 and 1995 and for the three and six months then ended.
This information should be read in conjunction with the
accompanying consolidated financial statements and notes thereto.
These financial statements include all adjustments which, in the
opinion of management, are necessary to reflect a fair statement
of the results for the interim periods presented, and all such
adjustments are of a normal recurring nature. Operating results
for the six month period ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the fiscal
year ending December 31, 1996.
RESULTS OF OPERATIONS
Comparison of Three Months Ended June 30, 1996 to Three Months
Ended June 30, 1995
Total revenue increased approximately $88,000 or 1%, to $10.7
million for the quarter ended June 30, 1996 compared to $10.6
million for the quarter ended June 30, 1995. Increases in minimum
rent, percentage rent and tenant recoveries related to expansion,
acquisition and development activities totalled approximately
$472,000. This increase was offset by a decrease in minimum rents
at comparable centers during the two periods due to the loss of
rents arising from certain tenant bankruptcies which occurred
after June 30, 1995 and a decrease in percentage rent due to
timing differences affecting the period that tenant sales figures
were received and percentage rent recognized in 1996 compared to
1995.
Operating expenses increased approximately $714,000, or 10%, to
$7.6 million during the quarter ended June 30, 1996 compared to
$6.9 million for the quarter ended June 30, 1995. Increases in
property operating expenses of approximately $54,000 and real
estate taxes of approximately $111,000 were attributable to expansion,
acquisition and development activities following the quarter
ended June 30, 1995. The remaining increase in property operating
expenses of approximately $145,000, which occurred at comparable
centers, was primarily a result of an increase in bad debt
expense due to certain tenant bankruptcies and continued weakness
among certain local and regional tenants and increased
maintenance expenses. The increase in depreciation and
amortization of approximately $337,000 was primarily due to
additional depreciation expense related to retenanting,
expansion, acquisition and development activities.
11
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Net interest and related financing expenses increased
approximately $476,000 for the quarter ended June 30, 1996
compared to the quarter ended June 30, 1995. This increase was
attributable to higher average outstanding borrowings related to
retenanting, acquisition, expansion and development activities.
As a result of the aforementioned changes in revenues and
expenses, income before minority interest for the quarter ended
June 30, 1996 decreased approximately $1.2 million to $18,000
from $1.2 million for the quarter ended June 30, 1995.
Comparison of Six Months Ended June 30, 1996 to Six Months Ended
June 30, 1995
Total revenue increased approximately $907,000, or 4%, to $22.0
million for the six months ended June 30, 1996 compared to $21.0
million for the six months ended June 30, 1995. Increases in
minimum rent, percentage rent and tenant recoveries as a result
of expansion, acquisition and development activities since June
30, 1995 totalled approximately $1.3 million. Recovery of
increased snow removal expenses from tenants at comparable
centers also contributed to the increase in expense
reimbursements for the six months ended June 30, 1996. These
increases were offset by a decrease in minimum rents at
comparable centers during the two periods due to the loss of
rents arising from certain tenant bankruptcies which occurred
after June 30, 1995 and a decrease in percentage rent due to
timing differences affecting the period that tenant sales figures
were received and percentage rent recognized in 1996 compared to
1995.
Operating expenses increased approximately $1.9 million, or 14%,
to $15.7 million for the six months ended June 30, 1996 compared
to $13.8 million for the six months ended June 30, 1995.
Increases in property operating expenses and real estate taxes
related to expansion, acquisition and development activities
following June 30, 1995 were approximately $155,000 and $235,000,
respectively. The increase in property operating expenses at
comparable centers was primarily attributable to increased costs
related to snow removal totalling $469,000 incurred due to the
extremely harsh winter experienced in the Northeast, an increase
in bad debt expense due to certain tenant bankruptcies and
continued weakness among certain local and regional tenants,
increased maintenance, and legal expenses related to certain
litigation. The increase in depreciation and amortization of
approximately $686,000 was primarily due to additional
depreciation expense related to retenanting, expansion,
acquisition and development activities.
12
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Net interest and related financing expenses increased
approximately $1.1 million for the six months ended June 30, 1996
compared to the six months ended June 30, 1995. This increase was
attributable to higher average outstanding borrowings related to
retenanting, acquisition, expansion and development activities.
As a result of the aforementioned changes in revenues and
expenses, income before minority interest for the six months
ended June 30, 1996 decreased $2.2 million to $204,000 from $2.4
million for the six months ended June 30, 1995.
Funds from Operations
The Company, consistent with other REITs, considers funds from
operations ("FFO") an important supplemental measure of operating
performance. NAREIT defines FFO as net income (computed in
accordance with generally accepted accounting principles)
excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.
Effective for 1996, NAREIT has established new guidelines clarifying
its definition of FFO wherein the depreciation of non real estate assets
and amortization of deferred financing fees should not be excluded
in computing FFO. FFO does not represent cash generated from operations
as defined by generally accepted accounting principles and is not
necessarily indicative of cash available to fund cash needs. It
should not be considered as an alternative to net income for the
purpose of evaluating the Company's performance or to cash flows
as a measure of liquidity. The following table sets forth the Company's
calculation of FFO in accordance with the new NAREIT guidelines
("Adjusted funds from operations").
13
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FUNDS FROM OPERATIONS
FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 1996 AND 1995
(in thousands, except per share amounts)
Three months ended Six months ended
6/30/96 6/30/95 6/30/96 6/30/95
Revenue
Minimum rents (a) $8,168 $8,106 $16,574 $15,901
Percentage rents 614 808 1,216 1,577
Additional rents-
expense reimbursements 1,607 1,384 3,551 2,924
Other 239 242 462 501
------ ------- ------- -------
Total revenue 10,628 10,540 21,803 20,903
------- ------- ------- -------
Expenses
Property operating (b) 2,222 1,972 4,963 4,164
Real estate taxes 1,368 1,176 2,666 2,295
General and administrative 710 726 1,461 1,400
------- ------- ------- -------
Total operating expenses 4,300 3,874 9,090 7,859
------- ------- ------- -------
Operating income 6,328 6,666 12,713 13,044
Interest and financing
expense 3,076 2,600 6,050 4,954
------- ------- ------- -------
Funds from operations (c) 3,252 4,066 6,663 8,090
Amortization of deferred
financing costs (235) (186) (469) (475)
Depreciation of non real (54) (53) (111) (105)
estate assets ------- ------- ------- -------
Adjusted funds from
operations (d) $ 2,963 $ 3,827 $ 6,083 $ 7,510
======= ======= ======= =======
Funds from operations $ .32 $ .40 $ .66 $ .80
per share(c)(e) ======= ======= ======= =======
Adjusted funds from operations
per share (d)(e) $ .29 $ .38 $ .60 $ .74
======= ======= ======= =======
Reconciliation of Adjusted Funds from Operations to Net Income
determined in accordance with Generally Accepted Accounting
Principles (GAAP)
Adjusted funds from
operations above 2,963 3,827 6,083 $7,510
Depreciation and
amortization of
leasing costs (2,980) (2,693) (5,891) (5,205)
Straight-line rents and
related write-offs net 42 13 34 52
Minority interest (22) (227) (74) (443)
Gain on sale of land -- 94 -- 94
Other non-cash adjustments (7) (27) (22) (36)
------- ------- ------- -------
Net income $ (4) $ 987 $ 130 $1,972
======= ======= ======= =======
Net income per share (f) $ .00 $ .12 $ .02 $ .23
======= ======= ======= =======
14
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(a) Excludes income from straight-lining of rents.
(b) Represents all expenses other than depreciation,
amortization, write-off of unbilled rent receivables
recognized on a straight-line basis and the non-cash charge
for compensation expense related to the Company's restricted
share plan.
(c) Funds from operations as defined by NAREIT prior to the 1995
White Paper on Funds from Operations is net income (computed
in accordance with generally accepted accounting principles)
excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint
ventures.
(d) Commencing in 1996, the Company has adopted the new NAREIT
definition of Funds from Operations which does not add back
amortization of deferred financing costs and depreciation of
non real estate assets.
(e) Assumes full conversion of 1,623,000 and 1,621,000 Operating
Partnership Units into common shares of the Company for the
quarters ended June 30, 1996 and 1995, respectively, for a
total of 10,171,817 and 10,164,452 shares, respectively.
(f) Net income per share is computed based on the weighted
average number of shares outstanding for the six months
ended June 30, 1996 and 1995 of 8,561,294 and 8,569,143,
respectively.
15
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had $18.3 million outstanding on
its Fleet Bank line of credit. The terms of the facility include
interest at Fleet's Prime rate plus 1/4% or LIBOR plus 200 basis
points, a May 31, 1997 maturity date, and certain affirmative and
negative covenants. The facility is secured by mortgages on six
of the Company's properties. The maximum loan amount has been
reduced from $25 million to $20 million with the additional $1.7
million currently unavailable as it is subject to certain
occupancy requirements at Ledgewood Mall.
At June 30, 1996, the Company had $20.4 million outstanding on a
$22.5 million revolving credit facility from Mellon Bank, N.A.
which is secured by mortgages on six of the Company's properties.
The additional $2.1 million under this line of credit for
property acquisitions, development, improvements and general
working capital is not currently available because it is subject
to certain collateral base borrowing restrictions. Advances under
the facility bear interest at a floating rate equal to the prime
rate plus 1/2% or LIBOR plus 200 basis points. The facility
matures October 6, 1996.
On June 14, 1996, the Company modified its line of credit
facility with Firstrust Bank by increasing the principal amount
from $6.0 to $7.5 million, extending the maturity date to June
30, 1997, modifying the interest rate to the higher of 8.75% or
Firstrust Bank's commercial reference rate plus 1/2% and
requiring monthly principal payments of $50,000 commencing
January 1, 1997. A mortgage on Troy Plaza has been added to the
existing mortgages on three properties as additional security for
the facility. As of June 30, 1996 $7.5 million is outstanding
under this facility.
At June 30, 1996, the Company had $3.3 million outstanding on a
construction loan from Mellon Bank, N.A. which is secured by one
of the Company's properties. The $4.7 million facility bears
interest equal to the bank's prime rate plus 1/2% or LIBOR plus
225 basis points and matures May 15, 1997.
16
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES, continued
The Company has additional mortgage indebtedness of $105.3
million outstanding which bear fixed rates of interest ranging
from 7.7% to 9.11% and have maturities ranging from September 9,
1999 to June 1, 2008.
At June 30, 1996, the Company's capitalization consisted of
$154.8 million of debt and $105.5 million of market equity (using
a June 30, 1996 market price of $10.375 per share). The Company's
interest coverage ratio was 2.1 to 1. Of the total outstanding
debt, $105.3 million, or 68%, is carried at a fixed rate and the
remaining $49.5 million, or 32%, is carried at variable rates.
The Company currently estimates that capital outlays for tenant
improvements, related renovations and other property improvements
will require $800,000 during the remainder of 1996.
Additionally, capital outlays for ongoing property development in
New Castle, Pennsylvania will be $10.3 million. Of these capital
outlays, $5.5 million has been recorded and is reflected in
accounts payable and accrued expense balances at June 30, 1996.
The Company has experienced a short-term cash shortfall which is
likely to continue as a result of the delay in obtaining
construction financing for the Union Plaza in New Castle,
Pennsylvania, and the Company's decision to continue to fund the
development of the project with cash from operations ($4.5 million
has been paid through June 30,1996)in order to take advantage of
certain construction cost economies and to meet certain tenant deadlines.
In addition, short term cash availability has been negatively
impacted as a result of the $2.5 million purchase of the Jamesway
lease at Ledgewood Mall to make space available for a large
national discount department store for which a lease has been
signed for 120,000 square feet (70,000 square feet was the space
formerly occupied by Jamesway and 50,000 square feet is vacant
contiguous space) at existing market rates which are
substantially higher than the $1.90 per square foot paid by
Jamesway. Cash flow has been further constrained by the
unanticipated requirement for the repayment of $1.8 million of
debt caused by the Rich's bankruptcy in Auburn, Maine, and
certain other tenant bankruptcies which occurred in late 1995 and
early 1996.
17
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES, continued
In response to these 1996 capital requirements, the Company
signed a commitment letter with Morgan Stanley Mortgage Capital,
Inc. on August 12, 1996 for a mortgage loan in the maximum amount
of $49,500,000. The facility, which will be secured by a first
mortgage on 18 of the Company's properties (15 of which are
currently encumbered), will bear interest equal to the 10-year
United States Treasury rate as of the loan closing date plus 225
basis points. The loan will require monthly payments of interest
and principal amortized over a 25 year period with a maturity of
10 years. Approximately $36.5 of the proceeds will be used to
retire existing debt, and $5.5 million of the proceeds will
satisfy all costs and related escrows. The remaining proceeds
will then be available for working capital. The Company will be
subject to certain affirmative and negative covenants, including
the maintenance of a debt service coverage ratio. This financing
is subject to execution of definitive documentation.
The Company has also signed a commitment letter on August 12,
1996 with First Western Bank, N.A. (the "Lender") for a
construction loan (the "Loan") in the maximum amount of $12.0
million for construction of the Union Plaza in New Castle,
Pennsylvania. Of the loan amount, $3.0 million will be initially
available based on leases currently in place with an additional
$2.0 million to be made available contingent on certain
additional leases being executed. The remaining $7.0 million will
be made available upon the Company issuing an irrevocable letter
of credit for $7.0 million. During the construction period the
Loan will require monthly payments of interest at the Lender's
prime rate plus 1%. Following the construction period, the Loan
will provide for an option to convert from a variable rate of
interest to a fixed rate and in addition will require the monthly
payment of principal amortized over a 15 year period. The Loan
will mature on March 1, 2013, and is to be secured by a mortgage
on the Union Plaza. The Company will be subject to certain
affirmative and negative covenants, including the maintenance of
a debt service coverage ratio. This financing is subject to
execution of definitive documentation.
18
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES, continued
The Company anticipates that the financings contemplated by these
commitments will substantially alleviate the Company's current
short-term cash shortfall. Nonetheless, the cash shortfall is
likely to continue.
In addition, on July 12, 1996, the Company obtained a $2,000,000
mortgage loan from the First Federal Savings Bank of New Smyrna.
The note, which is secured by a mortgage on the New Smyrna Beach
Shopping Center, requires monthly payments of interest at 9.25%
and principal amortized over a fifteen year period and matures on
July 12, 2001.
The Company's current outstanding indebtedness and committed
financings encumbers 36 of its 39 properties. The three
remaining properties, with the exception of one property which
the Company owns as ground lessor under a long-term ground lease,
remain unencumbered, and therefore are available to secure
potential future borrowings. Pursuant to covenants under the
lines of credit with Fleet Bank and Mellon Bank, approval is
needed from these lenders prior to the Company encumbering any
additional properties.
HISTORICAL CASH FLOW
Historically, the principal sources for funding operations,
renovations, expansion, development and acquisitions have been
funds from operations and construction and permanent secured debt
financings, as well as short term construction and line of credit
borrowing from various lenders.
The following discussion of historical cash flow compares the
Company's cash flow for the six months ended June 30, 1996 with
the Company's cash flow for the six months ended June 30, 1995.
Net cash provided by operating activities increased from $7.9
million for the six months ended June 30, 1995 to $8.4 million
for the six months ended June 30, 1996. This increase was
primarily attributable to increased cash flow from accounts
payable and tenant security and other deposits, offset by
decreased cash flow from rents receivable and income before
depreciation and amortization.
Investing activities used $8.0 million during the six months
ended June 30, 1996, a $4.5 million decrease in cash used from
the same period in 1995 due to decreased expenditures for real
estate and improvements offset by an increase in deferred leasing
charges due to the buyout of the Jamesway lease in 1996.
Net cash used in financing activities was $2.7 million for the
19
<PAGE>
HISTORICAL CASH FLOW, continued
six months ended June 30, 1996 representing a $7.8 million
decrease from net cash provided by financing activities of $5.1
million for the six months ended June 30, 1995. This decrease is
primarily attributable to a decrease in net proceeds received on
mortgage notes.
INFLATION
The Company's long-term leases contain provisions designed to
mitigate the adverse impact of inflation on the Company's net
income. Such provisions include clauses enabling the Company to
receive percentage rents based on tenants' gross sales, which
generally increase as prices rise, and/or, in certain cases,
escalation clauses, which generally increase rental rates during
the terms of the leases. Such escalation clauses are often
related to increases in the consumer price index or similar
inflation indexes.
In addition, many of the Company's leases are for terms of less
than ten years, which permits the Company to seek to increase
rents upon re-rental at market rates if rents are below the then
existing market rates. Most of the Company's leases require the
tenants to pay their share of operating expenses, including
common area maintenance, real estate taxes, insurance and
utilities, thereby reducing the Company's exposure to increases
in costs and operating expenses resulting from inflation.
20
<PAGE>
PART II. OTHER INFORMATION
Items 1-5
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.5(e) Termination of Option Agreements between
the Company and the Principal Shareholder
to acquire certain properties
10.5(f) Option Agreement between the Company and
the Principal Shareholder allowing the
Company to acquire a certain property from
the Principal Shareholder
10.5(g) First Amendment to Agreement of Sale and
Purchase (Hudson, New York) between the
Company and Marvin L. Slomowitz
10.13(b) Termination of Management Agreements
10.20(b) Amendment to Mortgage and Assignments of
Rents and Leases between the Company and
Firstrust Bank
10.21(a) Promissory Note Agreement between the Company
and First Federal Savings Bank of New Smyrna
10.21(b) Mortgage Deed and Security Agreement between
the Company and First Federal Savings Bank
of New Smyrna
(b) Reports on Form 8-K
None
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has fully caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
MARK CENTERS TRUST
By: /s/ Marvin L. Slomowitz
Marvin L. Slomowitz
Chief Executive Officer and
Trustee (Principal Executive
Officer)
/s/ Joshua Kane
Joshua Kane
Senior Vice President
Chief Financial Officer and
Treasurer (Principal Financial
and Accounting Officer)
Date: August 14, 1996
22
<PAGE>
INDEX OF EXHIBITS PAGE
10.5(e) Termination of Option Agreements between
the Company and the Principal Shareholder
to acquire certain properties
10.5(f) Option Agreement between the Company and
the Principal Shareholder allowing the
Company to acquire a certain property from
the Principal Shareholder
10.5(g) First Amendment to Agreement of Sale and
Purchase (Hudson, New York) between the
Company and Marvin L. Slomowitz
10.13(b) Termination of Management Agreements
10.20(b) Amendment to Mortgage and Assignments of
Rents and Leases between the Company and
Firstrust Bank
10.21(a) Promissory Note Agreement between the Company
and First Federal Savings Bank of New Smyrna
10.21(b) Mortgage Deed and Security Agreement between
the Company and First Federal Savings Bank
of New Smyrna
23
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<ARTICLE> 5
<CIK> 0000899629
<NAME> MARK CENTERS TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 732
<SECURITIES> 0
<RECEIVABLES> 5,594
<ALLOWANCES> 570
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 299,461
<DEPRECIATION> 66,859
<TOTAL-ASSETS> 249,745
<CURRENT-LIABILITIES> 0
<BONDS> 154,772
0
0
<COMMON> 0
<OTHER-SE> 63,805
<TOTAL-LIABILITY-AND-EQUITY> 249,351
<SALES> 0
<TOTAL-REVENUES> 10,719
<CGS> 0
<TOTAL-COSTS> 7,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (4)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
TERMINATION OF OPTION AGREEMENT
This Termination Agreement is made this 29th day of
May, 1996 by and between DALLAS ASSOCITES, L.P., a Pennsylvania
limited partnership ("Dallas")and MARK CENTERS LIMITED
PARTNERSHIP, a Delaware limited partnership ("MCLP").
RECITALS
A. Dallas and MCLP are parties to a certain Option
Agreement dated as of June 1, 1993 (the "Option Agreement")
pursuant to which Dallas granted to MCLP an option to purchase
certain property owned by Dallas and located in Dallas Township,
Luzerne County, Pennsylvania, more particularly described on
Exhibit A attached hereto. The Option Agreement is evidenced by
a Memorandum of Option Agreement also dated June 1, 1993.
B. At the February 13, 1996 meeting of the Board of
Trustees of Mark Centers Trust, general partner of MCLP, the
Board of Trustees agreed to cancel and to terminate the Option
Agreement.
C. Dallas and MCLP are entering into this Termination
Agreement in order to render the Option Agreement null and void
and of no further force and effort.
NOW THEREFORE, for and in consideration of the
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The Option Agreement is null and void and of no
further force and effect. Neither Dallas nor MCLP shall have any
further rights or liabilities under the Option Agreement.
2. The Memorandum of Option Agreement is of no
further force and effect.
IN WITNESS WHEREOF, Dallas and MCLP have executed this
Termination Agreement as of the day and year first-above written.
DALLAS ASSOCIATES, L.P. a
Pennsylvania limited partnership
by its general partner
MARK DALLAS REALTY, INC.
By: /s/ Marvin L. Slomowitz
Name: Marvin L. Slomowitz
Title:President
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership, by
its general partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
Name: David S. Zook
Title: Executive Vice President
TERMINATION OF OPTION AGREEMENT
This Termination Agreement is made this 21st day of
May, 1996 by and between MARK GETTYSBURG ASSOCIATES, L.P., a
Pennsylvania limited partnership ("Gettysburg") and MARK CENTERS
LIMITED PARTNERSHIP, a Delaware limited partnership ("MCLP").
RECITALS
A. Gettysburg and MCLP are parties to a certain
Option Agreement dated as of June 1, 1993 (the "Option
Agreement") pursuant to which Gettysburg granted to MCLP an
option to purchase certain property owned by and located in
Dallas Township, Luzerne County, Pennsylvania, more particularly
described on Exhibit "A" attached hereto. The Option Agreement
is evidenced by a Memorandum of Option Agreement also dated June
1, 1993.
B. At the February 13, 1996 meeting of the Board of
Trustees of Mark Centers Trust, general partner of MCLP, the
Board of Trustees agreed to cancel and to terminate the Option
Agreement.
C. Gettysburg and MCLP are entering into this
Termination Agreement in order to render the Option Agreement
null and void and of no further force and effect.
NOW THEREFORE, for and in consideration of the
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The Option Agreement is null and void and of no
further force and effect. Neither Gettysburg nor MCLP shall have
any further rights or liabilities under the Option Agreement.
2. The Memorandum of Option Agreement is of no
further force and effect.
IN WITNESS WHEREOF, Gettysburg and MCLP have executed
this Termination Agreement as of the day and year first-above
written.
MARK GETTYSBURG ASSOCIATES, L.P. a
Pennsylvania limited partnership,
by its general partner
MARK GETTYSBURG REALTY, INC.
By: /s/ Marvin L. Slomowitz
Name: Marvin L. Slomowitz
Title: President
MARK CENTERS LIMITED PARTNERSHIP,
by its general partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
Name: David S. Zook
Title: Executive Vice President
Kelly Township
Union County, Pennsylvania
OPTION TO PURCHASE AGREEMENT
This Option to Purchase Agreement made as of the 21st
day of May, 1996, by and between MARVIN L. SLOMOWITZ, an
individual (the "Optionor"), and MARK CENTERS LIMITED
PARTNERSHIP, a Delaware limited partnership ("Optionee").
BACKGROUND:
A. Optionor is the owner of approximately 26.6 acres
of property located in the Township of Kelly, County of Union,
Commonwealth of Pennsylvania (the "Premises"). The Premises are
more particularly described on Exhibit A attached hereto.
B. Optionee is the owner of a shopping center
adjacent to the Premises and may desire to expand the shopping
center onto the Premises, and therefore desires an option to
purchase the Premises.
C. Optionor wishes to grant to Optionee and Optionee
wishes to take from Optionor the aforesaid option to purchase the
Premises, all as more fully set forth below.
NOW, THEREFORE, in consideration of the foregoing and
of the mutual promises contained herein, and intending to be
legally bound, Optionor and Optionee agree as follows:
1. Grant of Option. For and in consideration of the
payments described in Paragraph 3 below, Optionor grants to
Optionee, and Optionee takes from Optionor, the option to
purchase the Premises (the "Purchase Option") at any time during
the term of this Agreement by giving written notice to Optionor
(the "Exercise Notice") of its election to exercise the Purchase
Option.
2. Term.
(a) Term. The initial term of this Agreement shall
commence as of the date hereof and shall end as of 11:59 p.m. on
May 10, 1999 (the "Initial Term").
(b) Termination. Optionee may terminate the term
of this Agreement at any time and for any reason whatsoever by
giving written notice of such election to Optionor, in which
event this Agreement shall become null and void and neither party
shall have any further obligations or liabilities to the other.
3. Option Payments.
(a) Payments. Optionee has paid to Optionor
contemporaneous with the execution of this Agreement the sum of
Five Thousand Dollars ($5,000) in consideration of Optionor's
grant of the Purchase Option to Optionee for the first year of
the Term. Optionee shall be obligated to pay to Optionor an
additional Five Thousand Dollars ($5,000) on the date which is
the first anniversary of this Agreement and on the date which is
the second anniversary of this Agreement.
(b) Failure to Make Option Payments. No failure by
Optionee to make the payments under Paragraph 3(a) above shall be
deemed a termination of the Purchase Option under this Agreement
unless and until (i) Optionor has given Optionee notice of such
termination and ten (10) business days within which to make such
payment, or (ii) Optionee has terminated this Agreement.
4. Agreement of Sale. Upon the date that Optionee
exercises the Purchase Option (the "Exercise Date"), this
Agreement shall constitute an agreement of sale between Optionor
and Optionee, whereby Optionor agrees to sell and Optionee agrees
to purchase the Premises upon the following terms and conditions:
(a) Closing. Closing for the purchase of the
Premises shall be held within sixty (60) days of the Exercise
Date, at such time, date ("Closing Date") and place as shall be
set forth in a notice from Optionee to Optionor after the
Exercise Date. The closing date shall not be earlier than
fifteen (15) days nor later than sixty (60) days after the
Exercise Date.
(b) Purchase Price. The purchase price for the
Premises shall be One Million Three Hundred Twenty-Five Thousand
Dollars ($1,325,000), provided, however, that the purchase price
shall be reduced by (i) the total amount of the Option Payments
made by Optionee described in subparagraph 3(a) above, (ii) the
amount of any lien on the Premises plus accrued and unpaid
interest thereon as of the Closing Date and (iii) the total of
any award or other proceeds received by Optionor at any time from
the date of this Agreement until Closing with respect to the
taking or condemnation of any portion of the Premises. At
Closing, the purchase price shall be paid by Optionee to Optionor
by cashier's, title company or certified check, and Optionor
shall assign to Optionee all of Optionor's claims to awards or
other proceeds of the taking or condemnation of any portion of
the Premises which have not yet been received by Optionor.
(c) Adjustments. All transfer taxes, documentary
stamps and recording charges necessary to record the Deed (as
defined in subparagraph (d) below) shall be split between
Optionor and Optionee. Optionee shall bear the cost of the title
insurance described in subparagraph 4(d) below, but Optionor
shall bear all costs in the form of abatement of the purchase
price associated with placing such title in the condition
required by such subparagraph. Real estate taxes and water and
sewer rents and charges (if any) shall be apportioned pro rata on
a per diem basis as of the Closing Date.
(d) Condition of Title. At closing, Optionor shall
convey to Optionee good and marketable fee simple title to the
Premises by delivery of a special warranty deed, in recordable
form (the "Deed"), such title to be free and clear of all liens,
leases, encroachments, easements, restrictions, title company
objections, and other encumbrances, except for those approved by
Optionee, in its sole discretion. Optionee's title shall be
insurable as aforesaid at ordinary rates by any reputable title
company of Optionee's choice (the "Title Company") pursuant to an
ALTA Owner's Policy of Title Insurance - 1970 - Form B - Amended
October 17, 1970, with such endorsements thereto as Optionee
shall request.
(e) Title Affidavits, Etc. Optionor agrees that it
shall execute any instruments, agreements, affidavits or other
documentation reasonably required by the title company insuring
Optionee's title in order to effectuate the transaction
contemplated hereby, and Optionor further agrees to execute any
and all affidavits required by such title company as a condition
to its insuring such title as aforesaid.
(f) Failure of Title. If title to any part of the
Premises shall not be in accordance with the requirements of
subparagraph 4(d) above, Optionee shall have the option of taking
such title to the Premises as Optionor can give with an
appropriate abatement of the purchase price and/or of terminating
this Agreement.
(g) FIRPTA Certification. Optionor agrees to sign
and deliver at closing a certification in form reasonably
acceptable to Optionee in compliance with the Foreign Interest in
Real Property Transfer Act.
(h) Survey. Optionor recognizes that Optionee may
obtain a survey plan of the Premises prepared by a registered
surveyor qualified to practice in the Commonwealth of
Pennsylvania. At the option of Optionor, a description of the
Premises contained in the Deed shall be based upon the survey as
well as the record description of the Premises.
(i) Automatic Extension of Term. Optionee's
delivery to Optionor of an Exercise Notice shall automatically
extend the term of this Agreement for a sufficient period of time
beyond the then-applicable expiration date to accommodate the
time periods provided in this Paragraph 4 (such as, without
limitation, the possible occurrence of closing on as late as the
60th day following the Exercise Date).
5. Cooperation. At Optionee's request, Optionor
shall cooperate with and assist Optionee in obtaining any permits
or other approvals required for expansion of its existing
shopping center onto the Premises (including without limitation,
any permits or other approvals described in Paragraph 9 below).
Optionor consents to Optionee's procurement of such permits or
other approvals with respect to the Premises.
6. Operations Prior to Closing. Between the date of
this Agreement and the earlier of its termination or the Closing
Date:
(a) The Premises shall be maintained substantially
in the same quality and condition on the Closing Date as on the
date hereof.
(b) Optionor shall not enter into any contract for,
or on behalf of, or affecting the Premises, which shall not
terminate by its terms on or before Closing or which cannot be
terminated at closing without cost, penalty or premium, and shall
not enter into any new lease, or any amendment, modification or
termination of any existing lease.
(c) All payments required to be made to
contractors, subcontractors, mechanics, materialmen and all other
persons in connection with work done or services performed with
respect to the Premises shall be made by Optionor as and when
due, but in any event prior to the closing date, and as of the
closing date there shall be no basis for the filing of any
mechanics' or materialmens' liens against the Premises or any
part thereof on the basis of any work done or services performed
with respect to the Premises.
(d) Optionor shall promptly deliver to Optionee a
copy of any tax bill, notice or assessment, or notice of change
in a tax rate or assessment affecting the Premises or any part
thereof, any notice or claim of violation of any law, any notice
of any taking or condemnation affecting or relating to the
Premises or any part thereof, or any other notice affecting or
relating to the Premises or any part thereof.
7. Representations and Warranties. Optionor, to
induce Optionee to enter into this Agreement, represents and
warrants to Optionee as follows:
(a) Optionor has full power and legal right and
authority to enter into and perform its obligations under this
Agreement, and the execution and delivery of this Agreement
requires no further action or approval in order to make this
Agreement a binding and enforceable obligation of Optionor.
(b) No individuals or entities other than Optionor
have any legal, equitable or other claim or right with respect to
the Premises or any part thereof.
(c) Neither the entering into of this Agreement,
the consummation of the sale, if any, nor the prior conveyance of
the Premises to Optionor, has or will constitute a violation or
breach of any of the terms of any contract or other instrument to
which Optionor is a party or to which he is subject or by which
any of his assets or properties may be affected.
(d) No consent of any third party is required by
Optionor to enter into this Agreement or to consummate the terms
of this Agreement, were Optionee to exercise the Purchase Option.
(e) There is no action, suit or proceeding pending
or, to the knowledge of Optionor, threatened against or affecting
Optionor or the Premises or any portion thereof in any court or
before or by any federal, state or local entity.
(f) There are no violations of any federal, state
or local law, ordinance, order, regulation or requirement
affecting any portion of the Premises and no written notice of
any such violation has been issued by any governmental authority.
Optionor shall cure, prior to closing, any such violation of
which Optionor or Optionee receives notice prior to the closing
date.
(g) There are no leases, tenancies, licenses or
other rights of occupancy or use for any portion of the Premises,
and no other contracts or agreements with respect to or affecting
any portion of the Premises.
(h) No portion of the Premises is the subject of
any abatement, reduction, deferral or "rollback" with regard to
real estate taxes nor any agreement or arrangement whereby the
Premises or any part thereof may be subject to the imposition of
real property taxes after the closing date on account of periods
of time prior to the closing date.
8. Environmental Matters. Optionor represents and
warrants that (i) to the best of its knowledge there is no
contamination present on the Premises or any part thereof, and
that (ii) since Optionor's acquisition of the Premises, it has
not placed in or upon the Premises or any part thereof, nor to
the best of its knowledge has any other party placed in or upon
the Premises, or any part thereof, any contamination. For
purposes of this paragraph, the term "contamination" shall mean
the uncontained presence of hazardous substances at the Premises
or any part thereof, or arising from the Premises or any part
thereof, which may require remediation under any applicable law.
"Hazardous substances" shall mean any and/or all of the
following: "hazardous substances" "pollutant or contaminant" as
defined pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, as amended from time to time,
"hazardous waste" as defined pursuant to the Resource
Conservation and Recovery Act, as amended from time to time,
polychlorinated byphenals or substances containing
polychlorinated byphenals, asbestos or materials containing
asbestos, petroleum or petroleum products, urea formaldehyde foam
insulation, or any other substances which may be the subject of
liability pursuant to Environmental Laws (as defined below).
Optionor represents and warrants that to the best of its
knowledge, all activities at the Premises have been and are being
conducted in compliance with all laws concerning discharges to
the air, soil, surface water or ground water, and storage,
treatment or disposal of, any contaminant (collectively,
"Environmental Laws"). Optionor represents and warrants that to
the best of its knowledge it does not know of any tanks,
underground or otherwise, presently or formerly on the Premises,
or any part thereof, used for the storage of any liquid, solid,
gas or other material above or below ground on the Premises.
Optionor agrees to indemnify, defend and hold harmless Optionee
of, from and against any and all expense, loss or liability
(including any and all reasonable legal fees and costs) suffered
by Optionee by reason of Optionor's breach of any provisions of
this Paragraph.
9. Investigation. Optionor shall afford Optionee and
its representatives full access to the Premises, to all files,
records and other information relevant to the Premises as
Optionee shall reasonably request, and shall have the right to
perform such tests and studies (including without limitation
topographical studies, soils tests and engineering, environmental
and other tests), prepare such plans and surveys and make such
applications, inquires and searches of governmental records as
Optionee shall deem necessary or appropriate in connection with
its evaluation of the Premises and the feasibility of the
Project; and Optionor shall cooperate fully with such
investigation of the Premises. With respect to material damage
to the Premises caused by Optionee or its representatives during
any such investigation, Optionee shall restore such damaged areas
to substantially their same condition existing prior to such
studies and tests.
10. Recording. Optionor agrees to sign a copy of this
Agreement or a memorandum thereof in the form of Exhibit "B"
attached hereto for purposes of recording this Agreement or such
memorandum with the Recorder's Office of Union County,
Pennsylvania.
11. Condemnation. Optionor has not received any
notice of any condemnation proceeding or other proceedings in the
nature of eminent domain or taking in connection with the
Premises, or any part thereof. In the event Optionor receives
any such notice, it will forthwith send a copy of such notice to
Optionee, and Optionee shall have the sole right (in the name of
Optionor or in its own name) to negotiate for, to agree to or to
contest all offers and awards. If any portion of the Premises is
taken or condemned, which, in Optionee's opinion, materially
adversely affects the construction or operation of the Project,
Optionee shall have the right to terminate this Agreement within
twenty (20) days after first receiving written notice of such
event.
12. Assignment. Optionee may assign its interests
under this Agreement at any time, and upon any such assignment,
shall be relieved of any and all liability hereunder.
13. Notices. All notices and other communications to
be given under this Agreement shall be in writing and shall be
hand delivered or sent by reputable, overnight courier service,
or by registered or certified mail, return receipt requested
addressed or sent as follows:
if intended for Optionor:
Marvin L. Slomowitz
313 Sylbert Drive
Kingston, PA 18704
if intended for Optionee:
c/o Mark Centers Trust
600 Third Avenue
Kingston, PA 18704
Attn: Steven M. Pomerantz, Esquire
All such notices or other communications shall be deemed to have
been given on the date of delivery thereof if given by hand
delivery, or on the date deposited with the courier service or
the United States Postal Service if given by overnight courier
service or United States mail, respectively. Notices by or to
the parties may be given or their behalf by their respective
attorneys.
14. Miscellaneous.
(a) Successors. This Agreement shall be binding
upon and inure to the benefit of Optionor and Optionee and their
respective heirs, executors, administrators, successors and
assigns.
(b) Captions. The captions in this Agreement are
inserted for convenience of reference only; they form no part of
this Agreement and shall not affect its interpretation.
(c) Entire Agreement; Governing Law. This
Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, supersedes all prior or
other negotiations, representations, understandings and
agreements of, by or among the parties, express or implied, oral
or written, which are fully merged herein. The express terms of
this Agreement control and supersede any course of performance
and/or customary practice inconsistent with any such terms. Any
agreement hereafter made shall be ineffective to change, modify,
discharge or effect an abandonment of this Agreement unless such
agreement is in writing and signed by the party against whom
enforcement of such change, modification, discharge or
abandonment is sought. This Agreement shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania.
(d) Provisions Separable. The provisions of this
Agreement are independent of and separable from each other, and
no provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other
provision may be invalid or unenforceable in whole or in part.
(e) Survival. Notwithstanding any presumption to
the contrary, all covenants, conditions and representations
contained in this Agreement, which, by their nature, impliedly or
expressly, involve performance after settlement, or which cannot
be ascertained to have been fully performed until after
settlement, shall survive settlement.
(f) Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to
be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the
same instrument. This Agreement shall be binding when one or
more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected on this
Agreement as the signatories.
(g) Interpretation. No provision of this Agreement
is to be interpreted for or against either party because that
party or that party's legal representative or counsel drafted
such provision.
(h) Time. Time is of the essence of this
Agreement. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of
any time period provided in this Agreement shall end on a
Saturday, Sunday or legal holiday, then the final day shall
extend to 5:00 p.m. of the next full business day. For the
purposes of this Section, the term "holiday" shall mean a day
other than a Saturday or Sunday on which banks in the state in
which the Real Property is located are or may elect to be closed.
In witness whereof, Optionor and Optionee have executed
this Agreement as of the day and year first written above.
Optionor:
/s/ Marvin L. Slomowitz (SEAL)
Marvin L. Slomowitz
Optionee:
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership, by its
general partner
By: MARK CENTERS TRUST, a Maryland
Business Trust
By: /s/ David S. Zook
Name: David S. Zook
Title: Executive Vice President
FIRST AMENDMENT TO AGREEMENT OF SALE AND PURCHASE
HUDSON, NEW YORK
This First Amendment is made this 12th day of June,
1996 by and between Marvin L. Slomowitz ("Slomowitz") and Mark
Centers Limited Partnership ("MCLP").
RECITALS
A. Slomowitz and MCLP are parties to a certain
Agreement of Sale and Purchase dated February 27, 1996 (the
"Agreement") pursuant to which MCLP agreed to sell and Slomowitz
agreed to purchase the Hudson Premises as more particularly
described in the Agreement.
B. The Agreement provided that the purchase price
would be paid by the delivery from Slomowitz to MCLP of a
Purchase Money Note in the form of Exhibit "B" attached to the
Agreement.
C. Slomowitz and MCLP are also parties to a certain
Agreement of Purchase and Sale of even date herewith for certain
of the partnership interests of Mark Twelve Associates, LP under
which MCLP is delivering its Note (the "New Castle Note") to
Slomowitz in consideration of the purchase price for the
partnership interests to be acquired by MCLP and Mark Centers
Trust in Mark Twelve Associates, L.P.
D. Slomowitz and MCLP have agreed to offset the
principal balances due under the Note (as defined in the
Agreement) and the New Castle Note so that there will be no
promissory note payable from Slomowitz to MCLP in consideration
of the Hudson Premises.
E. Slomowitz has elected to assign his right to
acquire the Hudson Premises to Mark Nine Associates, L.P., a
partnership wholly owned by Slomowitz.
F. Capitalized terms used in this First Amendment and
not defined shall have the meanings given to them in the
Agreement.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, MCLP
and Slomowitz hereby agree as follows:
1. The Recitals described above are incorporated
herein by reference as though fully set forth herein.
2. The Purchase Price described in paragraph 3
of the Agreement is acknowledged to be $3,065,073. Said Purchase
Price is deemed to be paid upon delivery from MCLP to Slomowitz
of the New Castle Note.
3. Closing under the Agreement shall occur
contemporaneously with the execution of this Agreement on June
12, 1996.
4. Except as modified hereby, the Agreement
otherwise remains in full force and effect and is ratified and
confirmed.
IN WITNESS WHEREOF, MCLP and Slomowitz have executed
this Agreement as of the day and year first above written.
MCLP:
Mark Centers Limited Partnership, a
Delaware partnership, by its
general Partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
David S. Zook
SLOMOWITZ:
By: /s/ Marvin Slomowitz
Marvin Slomowitz
TERMINATION OF MANAGEMENT AGREEMENT
This Termination Agreement is made this 12th day of
June, 1996 by and between BLACKMAN REALTY, INC., a Pennsylvania
corporation ("Blackman") and MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership ("MCLP").
RECITALS
A. Blackman and MCLP are parties to a certain
Management Agreement dated as of June 3, 1993 (the "Management
Agreement") pursuant to which MCLP is the manager of certain
property owned by Blackman known as the Cinema 309 Theatre and
located at Route 309 and Casey Avenue in Wilkes-Barre Township,
Luzerne County, Pennsylvania (the "Property").
B. At the February 13, 1996 meeting of the Board of
Trustees of Mark Centers Trust, general partner of MCLP, the
Board of Trustees agreed to cancel and to terminate the
Management Agreement.
C. Blackman and MCLP are entering into this
Termination Agreement in order to render the Management Agreement
null and void and of no further force and effect.
NOW THEREFORE, for and in consideration of the
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The Management Agreement is null and void and of
no further force and effect. Except as expressly provided in
Paragraph 2 below, neither Blackman nor MCLP shall have any
further rights or liabilities under the Management Agreement.
2. MCLP hereby assigns, and Blackman hereby assumes,
any and all existing contracts and permits in the name of MCLP
relating to the Property. Blackman and MCLP reaffirm the
survival of Sections 6.1 and 6.2 of the Management Agreement.
3. Blackman hereby acknowledges receipt of all items
required to be delivered by MCLP under Section 11.5 of the
Management Agreement. Attached hereto as Exhibit "A" is a
reconciliation of all Management Fees due to MCLP under Section
3.1 of the Management Agreement and all expense reimbursements
due to MCLP under Section 2.4 of the Management Agreement,
prorated through the date of this Agreement.
IN WITNESS WHEREOF, Blackman and MCLP have executed
this Termination Agreement as of the day and year first-above
written.
BLACKMAN REALTY, INC.
By: /s/ Harvey Shanus
Name: Harvey Shanus
Title:
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership, by
its general partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
Name:David S. Zook
Title:Executive Vice President
TERMINATION OF MANAGEMENT AGREEMENT
This Termination Agreement is made this 12th day of
June, 1996 by and between HONESDALE MALL ASSOCIATES, a
Pennsylvania partnership ("Honesdale") and MARK CENTERS LIMITED
PARTNERSHIP, a Delaware limited partnership ("MCLP").
RECITALS
A. Honesdale and MCLP are parties to a certain
Management Agreement dated as of June 3, 1993 (the "Management
Agreement") pursuant to which MCLP is the manager of certain
property owned by Honesdale known as the Route 6 Plaza located in
Honesdale Township, Wayne County, Pennsylvania (the "Property").
B. At the February 13, 1996 meeting of the Board of
Trustees of Mark Centers Trust, general partner of MCLP, the
Board of Trustees agreed to cancel and to terminate the
Management Agreement.
C. Honesdale and MCLP are entering into this
Termination Agreement in order to render the Management Agreement
null and void and of no further force and effect.
NOW THEREFORE, for and in consideration of the
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The Management Agreement is null and void and of
no further force and effect. Except as expressly provided in
Paragraph 2 below, neither Honesdale nor MCLP shall have any
further rights or liabilities under the Management Agreement.
2. MCLP hereby assigns, and Honesdale hereby assumes,
any and all existing contracts and permits in the name of MCLP
relating to the Property. Honesdale and MCLP reaffirm the
survival of Sections 6.1 and 6.2 of the Management Agreement.
3. Honesdale hereby acknowledges receipt of all items
required to be delivered by MCLP under Section 11.5 of the
Management Agreement. Attached hereto as Exhibit "A" is a
reconciliation of all Management Fees due to MCLP under Section
3.1 of the Management Agreement and all expense reimbursements
due to MCLP under Section 2.4 of the Management Agreement,
prorated through the date of this Agreement.
IN WITNESS WHEREOF, Honesdale and MCLP have executed
this Termination Agreement as of the day and year first-above
written.
HONESDALE MALL ASSOCIATES
By: /s/ Harvey Shanus
Name: Harvey Shanus
Title:
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership, by
its general partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
Name: David S. Zook
Title:Executive Vice President
TERMINATION OF MANAGEMENT AGREEMENT
This Termination Agreement is made this 12th day of
June, 1996 by and between PITTSTON MALL ASSOCIATES, a
Pennsylvania partnership ("Pittston") and MARK CENTERS LIMITED
PARTNERSHIP, a Delaware limited partnership ("MCLP").
RECITALS
A. Pittston and MCLP are parties to a certain
Management Agreement dated as of June 3, 1993 (the "Management
Agreement") pursuant to which MCLP is the manager of certain
property owned by Pittston known as the Pittston Mall located in
Pittston Township, Luzerne County, Pennsylvania (the "Property").
B. At the February 13, 1996 meeting of the Board of
Trustees of Mark Centers Trust, general partner of MCLP, the
Board of Trustees agreed to cancel and to terminate the
Management Agreement.
C. Pittston and MCLP are entering into this
Termination Agreement in order to render the Management Agreement
null and void and of no further force and effect.
NOW THEREFORE, for and in consideration of the
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The Management Agreement is null and void and of
no further force and effect. Except as expressly provided in
Paragraph 2 below, neither Pittston nor MCLP shall have any
further rights or liabilities under the Management Agreement.
2. MCLP hereby assigns, and Pittston hereby assumes,
any and all existing contracts and permits in the name of MCLP
relating to the Property. Pittston and MCLP reaffirm the
survival of Sections 6.1 and 6.2 of the Management Agreement.
3. Pittston hereby acknowledges receipt of all items
required to be delivered by MCLP under Section 11.5 of the
Management Agreement. Attached hereto as Exhibit "A" is a
reconciliation of all Management Fees due to MCLP under Section
3.1 of the Management Agreement and all expense reimbursements
due to MCLP under Section 2.4 of the Management Agreement,
prorated through the date of this Agreement.
IN WITNESS WHEREOF, Pittston and MCLP have executed
this Termination Agreement as of the day and year first-above
written.
PITTSTON MALL ASSOCIATES
By: /s/ Harvey Shanus
Name: Harvey Shanus
Title:
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership, by
its general partner
By: MARK CENTERS TRUST
By: /s/ David S. Zook
Name: David S. Zook
Title:Executive Vice President
THIS AMENDMENT IS MADE
IN TRIPLICATE AND RECORDED IN THE
COUNTY OF MONROE, THE COUNTY OF LUZERNE
AND THE COUNTY OF LACKAWANA, PENNSYLVANIA
Loan No.
2-910590
AMENDMENT TO MORTGAGE
AND ASSIGNMENT OF RENTS AND LEASES
This AMENDMENT TO MORTGAGE AND ASSIGNMENT OF RENTS AND
LEASES ("Mortgage Amendment") is made this 14 day of June, 1996
by and between MARK CENTERS LIMITED PARTNERSHIP, a Delaware
Limited Partnership ("Mortgagor"), and FIRSTRUST SAVINGS BANK
("Mortgagee").
RECITALS
A. Mortgagee is the holder of a Master Note from Mortgagor
to Mortgagee dated December 21, 1995 in the original principal
amount of Six Million Dollars ($6,000,000) ("Note") and Mortgagor
and Mortgagee have executed a Note Modification Agreement of even
date herewith (the "Note Amendment") whereby the Note has been
amended to increase the principal amount thereof to Seven Million
Five Hundred Thousand Dollars ($7,500,000), to change the
interest rate thereunder, to extend the maturity date thereunder
and to effectuate certain other modifications.
B. Payment of the Note is secured by three mortgage and
security agreements, each dated December 21, 1995 from Mortgagor
to Mortgagee (collectively the "Mortgages") and recorded as
follows:
1. In the Recorder of Deeds office of Monroe County,
Pennsylvania in Record Book 2021, Page 2378.
2. In the Recorder of Deeds office for Luzerne County
in Mortgage Book 2008, Page 20.
3. In the Recorder of Deeds office for Lackawana
County in Mortgage Book 1793, Page 527.
C. The Note is further secured by three Assignment of
Rents and Leases, each dated December 21, 1995 (collectively
"Assignment of Rents") and recorded as follows:
1. In the Recorder of Deeds Office for Monroe County
in Record Book 2021, Page 2402.
2. In the Recorder of Deeds Office for Luzerne County
in Deed Book 2549, Page 1160.
3. In the Recorder of Deeds Office for Lackawana
County in Book 1532, Page 606.
D. Mortgagor and Mortgagee desire to modify and confirm
that the Mortgages and the Assignments of Rents continue to
secure the performance of Mortgagor's obligations under the Note,
as amended by the Note Amendment.
NOW, THEREFORE, in consideration of the premises by each of
the parties to the other, receipt of which is hereby
acknowledged, and other good and valuable consideration,
Mortgagor does hereby grant, bargain, sell, remise, release,
enfeoff, confirm and mortgage unto Mortgagee all of the
Mortgagor's right, title and interest in the land described in
Exhibit "A" attached hereto and all buildings and improvements
now or hereafter erected thereon, and the parties, intending to
be legally bound, further covenant and agree as follows:
2
1. Mortgagor and Mortgagee confirm and agree that the
Mortgages and the Assignments of Rents are modified and extended
to secure, as a first lien on the premises described herein, the
performance of the Mortgagor's obligations under the Note, as
amended and supplemented by the Note Amendment.
2. Mortgagor stipulates and declares to Mortgagee
that Mortgagor has no charge claim, demand, defense,
counterclaim, plea or set-off upon, for or against the Note, the
Mortgages or Assignments of Rents or against Mortgagee with
respect to the loan evidenced by the Note.
3. It is expressly understood and agreed that the
said Mortgagor is bound by a certain obligation or writing
obligatory under his/her/its/their hands and seals duly executed,
stands firmly bound unto this said Mortgagee in the sum of up to
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) and
the Mortgages and Assignment of Rents are hereby amended to
restate the maximum outstanding principal amount of the Note, as
amended by the Note Amendment, as being Seven Million Five
Hundred Thousand Dollars ($7,500,000). All references in the
Mortgages and Assignments of Rents to the sum of Six Million
Dollars ($6,000,000) shall hereafter be changed to the sum of
Seven Million Five Hundred Thousand Dollars ($7,500,000).
4. All references to the Loan Agreement in the
Mortgages shall also be deemed to refer to the Loan Agreement as
amended by that certain First Amendment to Loan Agreement by and
between Mortgagor and Mortgagee of even date herewith.
5. Paragraph 1 of the Riders to the Mortgages is
amended to restate the amount of revolving credit facility from
$6,000,000 to $7,500,000.
3
6. Paragraph 3 of the Riders to the Mortgages is
hereby amended to reflect that the interest rate under the Note
Amendment is the higher of: (i) eight and three-quarters percent
(8.75%) per annum or (ii) the Firstrust Savings Bank Commercial
Reference Rate (as defined in the Note Amendment) plus one-half
percent (1/2%) per annum.
7. Paragraph 4 of the Riders to the Mortgages is
hereby amended to provide that the obligation under the Note, as
amended by the Note Amendment, shall mature and the entire amount
advanced by Mortgagee will be due and payable on June 30, 1997
(the "Maturity Date").
8. Paragraph 5 (b) of the Riders to the Mortgages is
hereby amended and restated as follows:
Payment of Principal: From and after January 1, 1997, and on the
first day of the month thereafter until the maturity date,
Mortgagor shall pay to Mortgagee a principal payment of Fifty
Thousand ($50,000) Dollars each month. Partial or full
prepayment of principal may occur at anytime without penalty or
premium. For amounts greater than $250,000, Mortgagor shall
provide Mortgagee with ten (10) days notice of their intention to
pay down the line.
9. Paragraph 22 is added to the Riders to the
Mortgages as follows:
CROSS DEFAULT CLAUSE: A DEFAULT IN THE TERMS AND CONDITIONS OF
THAT CERTAIN $2,500,000 MORTGAGE EXECUTED AND DELIVERED BY
MORTGAGOR TO FIRSTRUST SAVINGS BANK ON JUNE 14, 1996 AND INTENDED
TO BE RECORDED CONTEMPORANEOUSLY HEREWITH AND RECORDED IN
RENSSELAER COUNTY, NEW YORK WITH RESPECT TO THE PREMISES KNOWN AS
TROY PLAZA SHALL CONSTITUTE A DEFAULT HEREIN. LIKEWISE, A
DEFAULT HEREIN SHALL CONSTITUTE A DEFAULT IN SAID $2,500,000
MORTGAGE.
4
10. Except as modified hereby, the Mortgages and the
Assignments of Rents are ratified and confirmed and remain in
full force and effect.
BORROWER:
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware Limited Partnership, by
its general partner
BY: MARK CENTERS TRUST, a Maryland
Business Trust
BY: /s/ Joshua Kane
Name: Joshua Kane
Title: Senior Vice President
ATTEST: /s/ Steven M. Pomerantz
Name: Steven M. Pomerantz
Title: Assistant Secretary
LENDER:
FIRSTRUST SAVINGS BANK
BY: /s/ William F. Bruckner
Name: William F. Bruckner
Title: Vice President
5
PROMISSORY NOTE
$2,000,000.00 New Smyrna Beach, Florida July 12, 1996
BORROWER: LENDER:
MARK CENTERS LIMITED PARTNERSHIP FIRST FEDERAL SAVINGS BANK
a Delaware limited partnership OF NEW SMYRNA
600 Third Avenue 900 North Dixie Freeway
Kingston, PA 18704-1679 New Smyrna Beach, FL 32170
Principal Amount: $2,000,000.00 Fixed Rate: 9.25%
Date of Note: July 12, 1996
PROMISE TO PAY: Borrower promises to pay to Lender, or order,
in lawful money of the United States of America, the principal
amount of Two Million and 00/100 Dollars ($2,000,000.00),
together with interest at the rate indicated below on the unpaid
principal balance from July 12, 1996, until paid in full.
REPAYMENT SCHEDULE: Amortized over fifteen (15) years, fifty-nine
(59) monthly installments (including interest) of $20,583.85
commencing on August 12, 1996, and on the same day of each
successive month thereafter, together with a FINAL PAYMENT OF
$1,628,285.51 due and payable on July 12, 2001.
PREPAYMENT; MINIMUM INTEREST CHARGE: Borrower agrees that all
loan fees and other prepaid finance charges are earned fully as
of the date of the loan and will not be subject to refund upon
early payment (whether voluntary or as a result of default),
except as otherwise required by law. In any event, even upon
full prepayment of this Note, Borrower understands that Lender is
entitled to a minimum interest charge of $10.00. Other than
Borrower's obligation to pay any minimum interest charge,
Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments under the payment
schedule. Rather, they will reduce the principal balance due and
may result in Borrower's making fewer payments.
LATE CHARGE: If a payment is ten (10) days or more late,
Borrower will be charged 5.000% of the regularly scheduled
payment.
DEFAULT: Borrower is granted a one time only ten (10) day
advance written notice of monetary defaults and thirty (30) days
advance written notice of non-monetary default with an extended
cure right for any non-monetary default that cannot be cured
within thirty (30) days. Borrower will be deemed in default if
any of the following happens after the expiration of the above-
referenced notice and grace periods: (a) Borrower fails to make
any payment within thirty (30) days of its due date. (b)
Borrower fails to perform promptly at the time and strictly in
the manner provided in this Note or any agreement related to this
Note, or in any other agreement or loan Borrower has with Lender.
(c) Any representation or statement made or furnished to Lender
by Borrower in the loan documents is false or misleading in any
material respect. (d) Borrower becomes insolvent, a receiver is
appointed for any part of Borrowers property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is
commenced either by borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take
any of Borrower's property on or in which Lender has a lien or
security interest, including garnishment of any of Borrower's
accounts with lender. (f) Any of the events described in this
default section occurs with respect to any guarantor of this
Note. (g) Any default under any security documents securing this
Note. (h) Loss, theft, substantial damage, and destruction, not
covered by collectable insurance, sale, or encumbrance to or of
any of the collateral securing this Note.
LENDER'S RIGHTS: Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Upon default, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted
under applicable law, increase the fixed rate on this Note to the
amount allowed by law. Lender may hire or pay someone else to
help collect this Note if Borrower does not pay. Borrower also
will pay Lender the amount of these costs and expenses, which
includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and Lender's legal expenses whether or
not there is a lawsuit, including reasonable attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and
any anticipated post-judgement collection services. If not
prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law. This Note
has been delivered to Lender and accepted by Lender in the State
of Florida. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Volusia
County, the State of Florida. This Note shall be governed by and
construed in accordance with the laws of the State of Florida.
COLLATERAL: This Note is secured by a Mortgage, Security
Agreement, and Assignment of Rents, all dated of even date
herewith, to Lender on real property located in Volusia County,
State of Florida, more fully described on Exhibit "A" attached
hereto, all the terms and conditions of which are hereby
incorporated and made a part of this Note.
PAYMENTS: The monthly payments will be applied first to
interest, balance to principal, provided, however, should the
monthly interest due thereon exceed, from time to time, the sum
of the monthly payment, then and in such event the monthly
payments shall be increased by an amount equal to such excess
interest.
COMMERCIAL AND BUSINESS PURPOSES: The entire loan proceeds will
be utilized for business and commercial purposes.
GENERAL PROVISIONS: If any part of this Note cannot be enforced,
this fact will not affect the rest of the Note. Borrower does
not agree or intend to pay, and Lender does not agree or intend
to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any
amount in the nature of interest or in the nature of a fee for
this loan, which would in any way or event (including demand,
prepayment, or acceleration) cause Lender to charge or collect
more for this loan than the maximum Lender would be permitted to
charge or collect by federal law or the law of the State of
Florida (as applicable). Any such excess interest or
unauthorized fee shall, instead of anything stated to the
contrary, be applied first to reduce the principal balance of
this loan, and when the principal has been paid in full, be
refunded to Borrower. Lender may delay or forgo enforcing any of
its right or remedies under this Note without losing them.
Borrower any other person who signs, guarantees or endorses this
Note, to the extent allowed by law, waive presentment, demand for
payment, protest and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Lender's security interest in the
collateral.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT
OF A COMPLETED COPY OF THIS NOTE.
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDER'S ACCEPTING THIS NOTE FROM
BORROWER.
MARK CENTERS LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: MARK CENTERS TRUST, General
Partner
By: /s/ Joshua Kane
Joshua Kane, Senior Vice
President and Chief Financial
Officer
MORTGAGE DEED AND SECURITY AGREEMENT
THIS MORTGAGE DEED (the Mortgage), dates as of July 12,
1996, by and between MARK CENTERS LIMITED PARTNERSHIP, a Delaware
limited partnership (hereinafter called Mortgagor) and FIRST
FEDERAL SAVINGS BANK OF NEW SMYRNA, which is organized and
existing under the laws of the United States of America, having
office at 900 N. Dixie Freeway, New Smyrna Beach, Florida
(thereinafter called Mortgagee);
WITNESSETH, that in consideration of the premises and in
order to secure the payment of both the principal of, and
interest and any other sums payable on the note (as hereinafter
defined) or this Mortgage and the performance and observance of
all of the provisions hereof and of said note, Mortgagor hereby
grants, sells, warrants, conveys, assigns, transfers, mortgages
and sets over and confirms unto Mortgagee, all of Mortgagor's
estate, right, title and interest in, to and under all that
certain real property situate in Volusia County, Florida, more
particularly described as follows:
SEE LENGTHY LEGAL DESCRIPTION ATTACHED HERETO AND
INCORPORATED HEREIN AS EXHIBIT "A"
TOGETHER WITH all improvements now or hereafter located on
said real property and all fixtures, appliances, apparatus,
equipment, furnishings, heating and air conditioning equipment,
machinery and articles of personal property and replacement
thereof (other than those owned by lessees of said real property)
now or hereafter affixed to, attached to, placed upon, or used in
any way in connection with the complete and comfortable use,
occupancy, or operation of the said real property, all licenses
and permits used or required in connection with the use of said
real property, all leases of said real property now or hereafter
entered into and all right, title and interest of Mortgagor
thereunder, including without limitation, cash or securities
deposited thereunder pursuant to said leases, and all rents,
issues, proceeds, and profits accruing from said real property
and together with all proceeds of the conversion, voluntary or
involuntary of any of the foregoing into cash or liquidated
claims, including without limitation, proceeds of insurance and
condemnation awards (the foregoing said real property, tangible
and intangible personal property hereinafter referred to
collectively as the Mortgaged Property). Mortgagor hereby grants
to Mortgagee a security interest in the foregoing described
tangible and intangible personal property.
TO HAVE AND TO HOLD the Mortgaged Property, together with
all and singular the tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining and the reversion
and reversions thereof and all the estate, right, title,
interest, homestead, dower and right of dower, separate estate,
possession, claim and demand whatsoever, as well in law as in
equity, of Mortgagor and unto the same, and every part thereof,
with the appurtenances of Mortgagor in and to the same, and every
part and parcel thereof unto Mortgagee.
Mortgagor warrants that Mortgagor has a good and marketable
title to an indefeasible fee estate in the real property
comprising the Mortgaged Property subject to no lien, charge or
encumbrance except such as Mortgagee has agreed to accept in
writing and Mortgagor covenants that this Mortgage is and will
remain a valid and enforceable mortgage on the Mortgaged property
in the manner and form herein done or intended hereafter to be
done. Mortgagor will preserve such title and will forever
warrant and defend the same to Mortgagee and will forever warrant
and defend the validity and priority of the lien hereof against
the claims of all persons and parties whomsoever.
Mortgagor will, at the cost of Mortgagor, and without
expense to Mortgagee, do, execute, acknowledge and deliver all
and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as
Mortgagee shall from time to time require in order to preserve
the priority of the lien of this Mortgage or to facilitate the
performance of the terms hereof.
PROVIDED, HOWEVER, that if Mortgagor shall pay to mortgagee
the indebtedness in the principal sum of $2,000,000.00 as
evidenced by that certain promissory note (the Note), of even
date herewith, or any renewal or replacement of such Note,
executed by Mortgagor and payable to order of Mortgagee, with
interest and upon the terms as provided therein, and together
with all other sums advanced by Mortgagee, with interest and upon
the terms as provided therein, and together with all other sums
advanced by Mortgagee to or on behalf of Mortgagor pursuant to
the Note or this Mortgage, the final maturity date of the Note
and this Mortgage as specified in the Note and shall perform all
other covenants and conditions of the Note, all of the terms of
which Note are incorporated herein by reference as though set
forth fully herein, and of any renewal, extension or
modification, thereof and of this Mortgage, then this Mortgage
and the estate hereby created shall cease and terminate.
Mortgagor further covenants and agrees with Mortgagee as
follows:
1. To pay all sums, including interest secured hereby when
due, as provided for the Note and any renewal, extension or
modification thereof and in this Mortgage, all such sums to be
payable in lawful money of the United States of America at
Mortgagee's aforesaid principal office, or at such other place as
Mortgagee may designate in writing.
2. To pay when due, and without requiring any notice from
Mortgagee, all taxes, assessments of any type or nature and other
charges levied or assessed against the Mortgaged Property or this
Mortgage and produce receipts therefore upon demand. To
immediately pay and discharge any claim, lien or encumbrance
against the Mortgaged property which may be or become superior to
this Mortgage and to permit no default or delinquency on any
other lien, encumbrance or charge against the Mortgaged Property.
3. If required by Mortgagee, to also make monthly deposits
with Mortgagee, in a non-interest bearing account, together with
and in addition to interest and principal, of a sum equal to one-
twelfth of the yearly taxes and assessments which may be levied
against the Mortgaged Property, and (if so required) one-twelfth
of the yearly premiums for insurance thereon. The amount of such
taxes, assessments and premiums, when unknown, shall be estimated
by Mortgagee. Such deposits shall be used by Mortgagee to pay
such taxes, assessments and premiums when due. Any insufficiency
of such account to pay such charges when due shall be paid by
Mortgagor to Mortgagee on demand. If, by reason of any default
by Mortgagor under any provision of this Mortgage, Mortgagee
declares all sums secured hereby to be due and payable, Mortgagee
may then apply and funds in said account against the entire
indebtedness secured hereby. The enforceability of the covenants
relating to taxes, assessments and insurance premiums herein
otherwise provided shall not be affected except insofar as those
obligations have been met by compliance with this paragraph.
Mortgagee may from time to time at its option waive, and after
any such waiver reinstate, any or all provisions hereof requiring
such deposits, by notice to Mortgagor in writing. While any such
waiver is in effect, Mortgagor shall pay taxes, assessments and
insurance premiums as herein elsewhere provided.
4. To promptly pay all taxes and assessments assessed or
levied under and by virtue of any state, federal, or municipal
law or regulation hereafter passed, against Mortgagee upon this
Mortgage or the debt hereby secured, or upon its interest under
this Mortgage, provided however, that the total amount so paid
for any such taxes pursuant to this paragraph together with the
interest payable on said indebtedness shall not exceed the
highest lawful rate of interest in Florida and provided further
that in the event of the passage of any such law or regulation
imposing a tax or assessment against Mortgagee upon this Mortgage
or the debt secured hereby, that the entire indebtedness secured
by this Mortgage shall thereupon become immediately due and
payable at the option of Mortgagee.
5. To keep the Mortgaged Property insured against loss or
damage by fire, and all perils insured against by an extended
coverage endorsement, and such other risks and perils as
Mortgagee in its discretion may require. The policy or policies
of such insurance shall be in the form in general use from time
to time in the locality in which the Mortgaged Property is
situated, shall be in such amount as Mortgagee may reasonably
require, shall be issued by a company or companies approved by
Mortgagee, and shall contain a standard mortgagee clause with
loss payable to Mortgagee. Whenever required by Mortgagee, such
policies, shall be delivered immediately to and held by
Mortgagee. Any and all amounts received by Mortgagee under any
of such policies may be applied by Mortgagee under any of such
policies may be applied by Mortgagee on the indebtedness secured
hereby in such manner as Mortgagee may, in its sole discretion,
elect or, at the option of Mortgagee, the entire amount so
received or any part thereof may be released. Neither the
application nor the release of any such amounts shall cure or
waive any default. Upon exercise of the power of sale given in
this Mortgage or other acquisition of the Mortgaged Property or
any part thereof by Mortgagee, such policies shall become the
absolute property of Mortgagee.
6. To first obtain the written consent of Mortgagee, such
consent to be granted or withheld at the sole discretion of
Mortgagee, before (a) removing or demolishing any building now or
hereafter erected on the premises, (c) making any repairs which
involve the removal of structural parts or the exposure of the
interior of such building to the elements, (d) cutting or
removing or permitting the cutting and removal of any trees or
timber on the Mortgaged Property, (e) removing or exchanging any
tangible personal property which is part of the Mortgaged
Property.
7. To maintain the Mortgaged Property in good condition
and repair, including but not limited to the making of such
repairs as Mortgagee may from time to time determine to be
necessary for the preservation of the Mortgaged Property and to
not commit or permit any waste thereof, and Mortgagee shall have
the right to inspect the Mortgaged Property on reasonable notice
to Mortgagor.
8. To comply with all laws, ordinances, regulations,
covenants, conditions and restrictions affecting the Mortgaged
Property, and not to cause or permit any violation thereof.
9. If Mortgagor fails to pay any claim, lien or
encumbrance which is superior to this Mortgage, or when due, any
tax or assessment or insurance premium, or to keep the Mortgaged
property in repair, or shall commit or permit waste, or if there
be commenced any action or proceeding affecting the Mortgaged
Property or the title thereto, or the interest of Mortgagee
therein, including, but not limited to, eminent domain and
bankruptcy or reorganization proceedings, then Mortgagee, at its
option, may pay said claim, lien, encumbrance, tax, assessment or
premium, with right of subrogation thereunder, may make such
repairs and take such steps as it deems advisable to prevent or
cure such waste, and may appear in any such action or proceeding
and retain counsel therein, and take such action therein as
Mortgagee deems advisable, and for any of such purposes Mortgagee
may advance such sums of money, including all costs, reasonable
attorney's fees and other items of expense as it deems necessary.
Mortgagee shall be the sole judge of the legality, validity and
priority of any such claim, lien, encumbrance, tax, assessment
and premium and of the amount necessary to be paid in
satisfaction thereof. Mortgagee shall not be held accountable
for any delay in making any such payment, which delay may result
in any additional interest, costs, charges, expenses or
otherwise.
10. Mortgagor will pay to Mortgagee, immediately and
without demand, all sums of money advanced by Mortgagee to
protect the security hereof pursuant to this Mortgage, including
all costs, reasonable attorney's fees and other items of expense,
together with interest on each such advancement at the highest
lawful rate of interest per annum allowed by the law of the State
of Florida, and all such sums and interest thereon shall be
secured hereby.
11. All sums of money secured hereby shall be payable
without any relief whatever from any valuation or appraisement
laws.
12. If default be made in payment of any instalment of
principal or interest of the Note or any part thereof when due,
or in payment, when due, or any other sum secured hereby, or in
performance of any of Mortgagor's obligations, covenants or
agreements hereunder, all of the indebtedness secured hereby
shall become and be immediately due and payable at the option of
Mortgagee, without notice or demand which are hereby expressly
waived, in which event Mortgagee may avail itself of all rights
and remedies, at law or in equity, and this Mortgage may be
foreclosed with all rights and remedies afforded by the laws of
Florida and Mortgagor shall pay all costs, charges and expenses
thereof, including a reasonable attorney's fee, including all
such costs, expenses and attorney's fees, for any retrial,
rehearing or appeals. The indebtedness secured hereby shall bear
interest at the highest lawful rate of interest per annum allowed
by the law of the State of Florida from and after the date of any
such default of Mortgagor. If the Note provides for instalment
payments, the Mortgagee may, at its option, collect a late charge
as may be provided for in the Note, to reimburse the Mortgagee
for expenses in collecting and servicing such instalment
payments.
13. If default be made in payment, when due, of any
indebtedness secured hereby, or in performance of any of
Mortgagor's obligations, covenants or agreement hereunder:
(a) Mortgagee is authorized at any time, without notice, in
its sole discretion to enter upon and take possession of the
Mortgaged property or any part thereof, to perform any acts
Mortgagee deems necessary or proper to conserve the security and
to collect and receive all rents, issues and profits thereof,
including those past due as well as those accruing thereafter;
and
(b) Mortgagee shall be entitled, as a matter of strict
right, without notice and exparte, and without regard to the
value or occupancy of the security, or the solvency of Mortgagor,
or the adequacy of the Mortgaged Property as security for the
Note, to have a receiver appointed to enter upon and take
possession of the Mortgaged Property, collect the rents and
profits therefrom and apply the same as the court may direct,
such receiver to have all the rights and powers permitted under
the laws of Florida.
In either such case, Mortgagee or the receiver may also take
possession of, and for these purposes use, any and all personal
property which is a part of the Mortgaged property and used by
Mortgagor in the rental or leasing thereof or any part thereof.
The expense (including receiver's fees, counsel fees, costs and
agent's compensation) incurred pursuant to the powers herein
contained shall be secured hereby. Mortgagee shall (after
payment of all costs and expenses incurred) apply such rents,
issues and profits received by it on the indebtedness secured
hereby in such order as Mortgagee determines. The right to enter
and take possession of the Mortgaged Property, to manage and
operate the same, and to collect the rents, issues and profits
thereof, whether by a receiver or otherwise, shall be cumulative
to any other right or remedy hereunder or afforded by law, and
may be exercised concurrently therewith or independently thereof.
Mortgagee shall be liable to account only for such rents, issues
and profits actually received by Mortgagee.
14. If the indebtedness secured hereby is now or hereafter
further secured by chattel mortgages, security interests,
financing statements, pledges, contracts of guaranty, assignments
of leases, or other securities, or if the Mortgaged property
hereby encumbered consists of more than one parcel of real
property, Mortgagee may at its option exhaust any one or more of
said securities and security hereunder, or such parcels of the
security hereunder, either concurrently or independently, and in
such order as it may determine.
15. This Mortgage shall secure not only existing
indebtedness, but also such future advances, whether such
advances are obligatory or to be made at the option of Mortgagee,
or otherwise, as are made within twenty (20) years from the date
hereof, to the same extent as if such future advances were made
on the date of the execution of this Mortgage, but such secured
indebtedness shall not exceed at any time the maximum principal
amount of two times the amount of the Note, plus interest
thereon, and any disbursements made for the payment of taxes,
levies, or insurance on the Mortgaged property, with interest on
such disbursements. Any such future advances, whether obligatory
or to be made at the option of the Mortgagee, or otherwise, may
be made either prior to or after the due date of the Note or any
other notes secured by this Mortgage. This Mortgage is given for
the specific purpose of securing any and all indebtedness by the
Mortgagor to Mortgagee (but in no event shall the secured
indebtedness exceed at any time the maximum principal amount set
forth in this paragraph) in whatever manner this indebtedness may
be evidenced or represented, until this Mortgage is satisfied or
record. All covenants and agreements contained in this Mortgage
shall be applicable to all further advances made by Mortgagee to
Mortgagor under this future advance clause.
16. No delay by Mortgagee in exercising any right or remedy
hereunder, or otherwise afforded by law, shall operate as a
waiver thereof or preclude the exercise thereof during the
continuance of any default hereunder. No waiver by Mortgagee of
any default shall constitute a waiver of or consent to subsequent
defaults. No failure of Mortgagee to exercise any option herein
given to accelerate maturity of the debt hereby secured, no
forbearance by Mortgagee before or after the exercise of such
option and no withdrawal or abandonment of foreclosure proceeding
by Mortgagee shall be taken or construed as a waiver of its right
to exercise such option or to accelerate the maturity of the debt
hereby secured by reason of any past, present or future default
on the part of mortgagee shall not be taken or construed as a
waiver of its right to accelerate the maturity of the debt hereby
secured.
17. Without affecting the liability of Mortgagor or any
other person (except any person expressly released in writing)
for payment of any indebtedness secured hereby or for performance
of any obligation contained herein, and without affecting the
rights of Mortgagee with respect to any security not expressly
released in writing, Mortgagee may, at any time and from time to
time, either before or after the maturity of said note, and
without notice or consent:
(a) Release any person liable for payment of all or
any part of the indebtedness or for performance of any
obligation;
(b) Make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the
indebtedness, or modifying or waiving any obligation, on
subordinating, modifying or otherwise dealing with the lien or
change hereof;
(c) Exercise or refrain from exercising or waive any
right Mortgagee may have;
(d) Accept additional security of any kind; and
(e) Release or otherwise deal with any property, real
or personal, securing the indebtedness, including all or any part
of the Mortgaged Property.
18. Any agreement hereafter made by Mortgagor and Mortgagee
pursuant to this mortgage shall be superior to the rights of the
holder of any intervening lien or encumbrance.
19. mortgagor hereby waives all right of homestead
exemption, if any, in the Mortgaged Property.
20. In the event of condemnation proceedings of the
Mortgaged property, the award or compensation payable thereunder
is hereby assigned to and shall be paid to Mortgagee. Mortgagee
shall be under no obligation to question the amount of any such
award or compensation and may accept the same in the amount in
which the same shall be paid. In any such condemnation
proceedings, Mortgagee may be represented by counsel selected by
mortgagee. The proceeds of any award or compensation so received
shall, at the option of Mortgagee, either be applied to the
prepayment of the Note and at the rate of interest provided
therein, regardless of the rate of interest payable on the award
by the condemnation authority, or at the option of Mortgagee,
such award shall be paid over to Mortgagor for restoration of the
Mortgaged Property.
21. If Mortgagee, pursuant to a construction loan agreement
or loan commitment made by Mortgagee with Mortgagor, agrees to
make construction loan advances up to the principal amount of the
Note, then Mortgagor hereby covenants that it will comply with
all of the terms, provisions and covenants of said construction
loan agreement or loan commitment, will diligently construct the
improvements to be built pursuant to the terms thereof, all of
the terms thereof which are incorporated herein by reference as
though set forth fully herein and will permit no defaults to
occur thereunder and if a default shall occur thereunder, it
shall constitute a default under this Mortgage and the Note.
22. At the option of Mortgagee, Mortgagor shall provide
Mortgagee with periodic certified audited statements of the
operations of and the financial condition of Mortgagor.
23. The loan represented by this Mortgage and the Note is
personal to the Mortgagor and the Mortgagee made the loan to the
Mortgagor based upon the credit of the Mortgagor and the
Mortgagee's judgement of the ability of the Mortgagor to repay
all sums due under this Mortgage, and therefore this Mortgage may
not be assumed by any subsequent holder of an interest in the
Mortgaged property. If all or any part of the Mortgaged
Property, or any interest therein, is sold, conveyed, transferred
(including a transfer by agreement for deed or land contract) or
further encumbered by Mortgagor without Mortgagee's prior written
consent excluding the grant of any leasehold interest in the
Mortgaged Property not containing an option to purchase, which
lease is made in the ordinary course of Mortgagor's business,
then in that event Mortgagee may declare all sums secured by this
Mortgage immediately due and payable.
24. Mortgagor represents and warrants that if a
corporation, it is duly organized and validly existing, in good
standing under the laws of the state of its incorporation, has
stock outstanding which has been duly and validly issued, and is
qualified to do business and is in good standing in the State of
Florida, with full power and authority to consummate the loan
contemplated hereby; and, if a partnership, it is duly formed and
validly existing, and is fully qualified to do business in the
State of Florida; with full power and authority to consummate the
loan contemplated hereby.
25. In the event any one or more of the provisions
contained in this Mortgage or in the Note shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall, at the option
of the Mortgagee, not affect any other provisions of this
Mortgage, but this Mortgage shall be construed as if such
invalid, illegal or unenforceable provision had never been
contained herein or therein. The total interest payable pursuant
to the Note or this Mortgage shall not in any one year exceed the
highest lawful rate of interest permitted in the State of
Florida.
26. The covenants and agreements herein contained shall
bind and the benefits and advantages shall inure to the
respective heirs, executors, administrators, successors, and
assigns of the parties hereto. Whenever used, the singular
number shall include the plural, the plural the singular, and the
use of any gender shall be applicable to all genders. All
covenants, agreements and undertakings shall be joint and
several. In the event additional numbered covenants or
paragraphs are for convenience inserted in this Mortgage, such
additional covenants shall be read and given effect as though
following this covenant in consecutive order.
27. SEE RIDER TO MORTGAGE DEED AND SECURITY AGREEMENT
INCORPORATED HEREIN.
IN WITNESS WHEREOF, Mortgagor has duly executed this
Mortgage as of the date first above written.
THIS IS A BALLOON MORTGAGE AND THE FINAL
PRINCIPAL PAYMENT OR THE PRINCIPAL
BALANCE DUE UPON MATURITY IS
$1,628,285.51, TOGETHER WITH ACCRUED
INTEREST, IF ANY, AND ALL ADVANCEMENTS
MADE BY THE MORTGAGOR UNDER THE TERMS OF
THIS MORTGAGE.
MARK CENTERS LIMITED PARTNERSHIP, a
Delaware limited partnership
By: MARK CENTERS TRUST, General Partner
BY /s/ Joshua Kane, Sr VP & CFO
Joshua Kane
As its Senior Vice President and
Chief Financial Officer
RIDER TO MORTGAGE DEED AND SECURITY AGREEMENT
This Rider to Mortgage Deed and Security Agreement ("Rider")
is made this 12th day of July, 1996, and is incorporated into and
shall be deemed to amend and supplement the Mortgage Deed and
Security Agreement (hereinafter "Security Instrument") of same
date given by the undersigned (hereinafter "Mortgagor") to secure
Borrower's promissory note to First Federal Savings Bank of New
Smyrna, the mortgagee (hereinafter "mortgagee") of even date and
covering the "Property" as defined in the Security Instrument.
Additional Covenant. In addition to the other covenants and
agreements made in this Security instrument, Mortgagor further
covenants to Mortgagee and agree as follows:
1. Environmental Condition of property; Indemnification.
Mortgagor warrants to the best of its knowledge and presents to
Mortgagee except for the small tank located near the Goodyear
site, after thorough investigation that: (a) the property is now
and at all times hereafter will continue to be in full compliance
with all Federal, State and local environmental laws and
regulations, including but not limited to, the Comprehensive
Environmental Response, Compensation and liability Act of 1980
("CERCLA"), Public Law No. 96-510, 94 Stat. 2767, 42 USC 9601 eq
sea., and the Superfund Amendments and Reauthorization as may be
amended from time to time, and the Superfund Amendments and
Reauthorization Act of 1986 (SARA), Public Law No. 99-499, 100
Stat. 1613, as may be amended from time to time; (b) (i) as of
the date hereof there are no hazardous materials, substances,
wastes or other environmentally regulated substances, wastes or
other environmentally regulated substances (including without
limitation, any materials containing asbestos) located on, in or
under the property or used in connection therewith, or (ii)
Mortgagor has fully disclosed to mortgage in writing the
existence, extent and nature of any such hazardous materials,
substances, wastes or other environmentally regulated substances,
wastes or other environmentally regulated substances, which
mortgagor is legally authorized and empowered to maintain on, in
or under the property or use in connection therewith; and (c)
Mortgagor has obtained and will maintain all licenses, permits
and approvals. Mortgagor further represents and warrants that it
will promptly notify Mortgagee of any change in the nature or
extent of any hazardous materials, substances or wastes
maintained on, in or under the Property or used in connection
therewith, and will transmit to Mortgagee copies of any
citations, orders, notices or other material governmental or
other communication received with respect to any other hazardous
materials, substances, wastes or other environmentally regulated
substances affecting the Property. Mortgagor shall indemnify and
hold Mortgagee harmless from and against any and all damages,
penalties, fines, claims, liens, suits liabilities, costs
(including clean-up costs), judgements and expenses (including
attorneys' consultants' or experts' fees and expenses) of every
kind and nature suffered by or asserted against Mortgagee as a
direct or indirect result of any warranty or representation made
by Mortgagor in the preceding paragraph being false or untrue in
any material respect or any requirement under the law, regulation
or ordinance, local, state or Federal, which requires the
elimination or removal of any hazardous materials, substances,
wastes or other environmentally regulated substances by
Mortgagee, mortgagor or any transferee of or successor of
Mortgagee or Mortgagor.
Mortgagor's obligations hereunder shall not be limited to any
extent by the term of the promissory note secured by the Security
Instrument, and, as to any act or occurrence prior to payment in
full and satisfaction of such note which gives rise to liability
hereunder, shall continue, survive and remain in full force and
effect notwithstanding payment in full and satisfaction of said
note and the Security Instrument, or delivery of a deed in lieu
of foreclosure.
2. Prohibition of additional financing, further liens. An
important component of the consideration for the extension of
credit evidenced by the note secured by this mortgage is
mortgagor's equity in the property encumbered by this mortgage
and the maintenance of such equity (as increased through future
appreciation, if any) during the term of this mortgage.
Mortgagor shall not, without the written consent of Mortgage,
obtain additional financing of any kind relating to the property
encumbered by this mortgage or cause or permit any further lien
of any kind to be imposed on the property. Any violation of this
provision will, at the option of the mortgagee, constitute a
default under this mortgage.
3. Cross default. The note secured by this mortgage is
also secured by the following instruments:
a) Promissory Note of even date herewith
b) Assignment of Rents, Leases & Profits
c) UCC-I (County & State)
A default under any of the above instruments shall constitute a
default under this mortgage, and the holder shall have all the
remedies provided herein, including the option to accelerate the
unpaid principal balance, without prior notice or demand.
Additionally, a default under any loan commitment or loan
heretofore or hereafter made by any lending institution to
mortgagor shall, at the option of the mortgagee, constitute a
default under the mortgage and note, and under all other
commitments or loans made to mortgagor by the mortgagee.
4. Waiver of Right to Jury Trial. As additional
consideration for the granting of the loan evidenced by the Note
secured by this mortgage, the mortgagor hereby waives the right
to a trial by jury with respect to any litigation based on the
Note, Mortgage (or any other loan documents), any Guaranty of the
Note or obligation evidenced thereby, the loan commitment letter
dated June 5, 1996, any obligation arising from or evidenced by
any of the foregoing instruments, or any course of dealing,
course of conduct, statements, (whether verbal or written), or
actions of mortgagor relating to any of the foregoing matter or
instruments.
5. Loan Commitment Provisions Survive Closing. The
Conditions, provisions and obligations set forth in that certain
First Federal Savings Bank of New Smyrna, loan commitment
letter, dated June 5, 1996, shall survive the closing of the loan
transaction evidenced by the Note, Mortgage or any related loan
documents, and shall be fully binding upon the Mortgagor.
6. Severability. If any term, condition or covenant of
this mortgage, the Note or any other document secured by this
Mortgage, or the application thereof to any person or
circumstances shall be invalid or unenforceable, the remainder of
this Mortgage, Note and other loan documents and the application
of such term, covenant or condition to persons or circumstances
other than those to which it is held invalid or unenforceable
shall not be affected thereby, and each term, covenant or
condition of this mortgage, the Note and other documents shall be
valid and enforceable to the fullest extent permitted by law.
By signing below, Mortgagors accept and agree to the terms
and covenants contained in this Rider.
EXECUTED, as of the date and year first stated above.
MARK CENTERS LIMITED PARTNERSHIP,
a Delaware limited Partnership
By: MARK CENTERS TRUST,
General Partner
By: /s/ Joshua Kane
Joshua Kane
Senior Vice President and
Chief Financial Officer
This instrument prepared by:
W.M. Gillespie, Esquire
Gillespie & Gillespie, P.A.
233 North Causeway
New Smyrna Beach, Florida 32170
