UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 9, 2006
BRT REALTY TRUST
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(Exact name of Registrant as specified in charter)
Massachusetts 001-07172 13-2755856
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
-- Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
-- Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
-- Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
-- Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
On January 9, 2006, registrant consummated a $150 million revolving credit
facility with North Fork Bank, Valley National Bank, Merchants Bank Division,
Signature Bank and Manufacturers and Traders Trust Company. The $150 million
facility replaces an $85 million facility and a $17 million facility (an
aggregate of $102 million) the registrant had with North Fork Bank, Valley
National Bank, Merchants Bank Division and Signature Bank. The new facility has
an interest rate equal to LIBOR plus 2.25%, matures on February 1, 2008, and
permits the registrant to extend the facility for two one-year periods for a fee
of $375,000 for each one-year extension. Under the new facility, the registrant
is required to maintain cash or marketable securities at all times of not less
than $15 million. The maximum amount of the loan outstanding cannot be more than
(i) 65% of the first mortgages pledged to the lenders, plus (ii) 50% of
subordinated collateral and 50% of the fair market value of real property
acquired by the registrant in a foreclosure of a defaulted loan; provided that
the collateral set forth in (ii) may not exceed 15% of the borrowing base.
Additionally, unless accelerated pursuant to the new facility, the new facility
requires a debt service coverage ratio of 1.25:1.00 until May 1, 2006 and
1.5:1.0 thereafter, and a shareholders' equity ratio to certain debt of not less
than 0.8:1.0 until May 1, 2006 and 1.0:1.0 thereafter.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is hereby incorporated by
reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits.
10.1 Revolving Credit Agreement, dated as of January 9, 2006,
between by BRT Realty Trust and North Fork Bank.
10.2 Secured Promissory Note, dated January 9, 2006, by
BRT Realty Trust in favor of North Fork Bank, in the
aggregate principal amount of $150,000,000.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRT REALTY TRUST
Date: January 11, 2006 By: /s/ Simeon Brinberg
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Simeon Brinberg
Senior Vice President and Secretary
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
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THIS REVOLVING CREDIT AGREEMENT (this ("Agreement") is made as of the
9th day of January, 2006, between BRT REALTY TRUST, a Massachusetts business
trust, with offices at 60 Cutter Mill Road, Suite 303, Great Neck, New York
10021 (the "Borrower") and NORTH FORK BANK, a corporation organized under the
Banking Law of the State of New York having its principal offices at 275
Broadhollow Road, Melville, New York 11747 (the "Lender").
W I T N E S S E T H
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WHEREAS, the Borrower or an affiliate of Borrower is and will be the
owner and holder of certain loans set forth on Exhibit A annexed hereto and made
a part hereof and from time to time updated as set forth herein (the "Pledged
Loans"), and the notes evidencing same (the "Pledged Notes"), which notes are or
will be secured by mortgages encumbering real property (the "Pledged Mortgages",
and together with the Pledged Notes, the Pledged Loans and the Pledged REO, as
hereinafter defined, the Substitute Collateral (as hereinafter defined) and any
other collateral now or in the future pledged to the Lender as security
hereunder, the "Collateral"); and
WHEREAS, the Lender has agreed to make available to the Borrower a
credit facility (the "Facility") in the maximum principal amount of up to ONE
HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00) DOLLARS (the "Facility
Amount"), provided, however, that at no time shall the outstanding principal
balance exceed the Borrowing Base (as defined in that certain North Fork Bank
Promissory Note bearing even date herewith (the "Note" and, together with this
Agreement and the other documents executed in connection herewith, the "Facility
Documents"), payable in accordance with the Note, together with any additional
sums due under the terms of the Note and this Agreement.
NOW, THEREFORE, in consideration of ten ($10.00) dollars, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower hereby covenants and agrees with the Lender that:
1. The Borrower will pay the amounts due with respect to the Facility
as provided herein and in the Note.
2. A. The Borrower will keep in effect such insurance with respect to
the Collateral as the Lender may reasonably require and shall pay the premiums
for such insurance as same become due and payable. All policies of insurance
(the "Policies") shall be issued by an insurer acceptable to the Lender. The
Borrower will assign and deliver the Policies to the Lender. Not later than
fifteen (15) days prior to the expiration date of each of the Policies the
Borrower will deliver to the Lender satisfactory evidence of the renewal of each
of the Policies. Sums paid to the Lender by any insurer shall be retained and
applied by the Lender toward payment of the sums due with respect to the
Facility in such priority and proportions as the Lender in its discretion shall
deem proper. If the Lender shall receive and retain such insurance money, the
then-outstanding amount due with respect to the Facility shall be reduced only
by the amount thereof received after expenses of collection and retained by the
Lender and actually applied by the Lender in reduction of the outstanding amount
of the Facility. The Lender shall be entitled, in the event of other insurance
and contribution between the insurers, to receive from the insurance moneys to
be paid such an amount as would have been payable under the policy or policies
held for the benefit of the Lender in case there had been no contribution.
(b) The Borrower shall at all times cause the mortgagors under
the Pledged Mortgages (each a "Mortgagor" and collectively, the "Mortgagors") to
keep the properties encumbered thereby (each, a "Mortgaged Property" and
collectively, the "Mortgaged Properties") insured in accordance with the
provisions of the Pledged Mortgages, and shall provide Lender with evidence of
not less than fifteen (15) days prior to the expiration of such insurance
policies, and at such other times as Lender may reasonably request. In the event
that the Borrower is at any time entitled, pursuant to the provisions of any
Pledged Mortgage, to receive and retain the proceeds of any such insurance
policy, such proceeds shall be received by the Borrower as trustee for the
Lender, and paid to the Lender to the extent necessary to reduce the
then-outstanding amount due with respect to the Facility so that same shall be
no more than the Borrowing Base (unless the Lender shall agree to Substitute
Collateral, as provided for in paragraph 8 hereof). If the Lender shall receive
and retain such insurance money, the sums due with respect to the Facility shall
be reduced only by the amount thereof received after reasonable expenses of
collection and retained by the Lender and actually applied by the Lender in
reduction of the sums due with respect to the Facility.
3. The Borrower will cause the Mortgagors to pay all taxes,
assessments, water rates, sewer rents and other charges, including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Mortgaged Properties, now or hereafter levied or
assessed against the Mortgaged Properties (the "Taxes") as same become due and
payable. The Borrower will deliver to the Lender, upon request, evidence
satisfactory to the Lender that the Taxes are not delinquent.
4. In the event that the Borrower shall collect escrow from any
Mortgagor to pay Taxes, insurance premiums, ground rents or any other sums
payable by Mortgagor, or in the event that the Borrower shall require any
Mortgagor to deposit any repair reserve, replacement reserve, leasing commission
reserve, interest reserve or other reserve or escrow of any kind or nature
whatsoever in connection with any Mortgaged Property, the Borrower shall cause
all such amounts to be maintained in one or more accounts with the Lender
(except to the extent that the documents executed in connection with the
relevant Pledged Mortgage require otherwise). In addition, to the extent
permitted under the Pledged Mortgages, the Borrower shall cause all tenant
security deposit accounts with respect to the Mortgaged Properties to be
maintained with the Lender.
5. In the event that the Borrower shall receive any condemnation or
similar award with respect to any Mortgaged Property, such award shall be
received by the Borrower as trustee for the Lender, and paid to the Lender in
reduction of the sums due with respect to the Facility to the extent necessary
to reduce the outstanding principal balance of the Facility so that same shall
be no more than the Borrowing Base (unless the Lender shall agree to Substitute
Collateral, as provided for in paragraph 8 hereof). If the Lender shall receive
and retain any such condemnation award, the sums due with respect to the
Facility shall be reduced only by the amount thereof received after reasonable
expenses of collection and retained by the Lender and actually applied by the
Lender in reduction of the sums due with respect to the Facility. The Lender may
apply any such award to the repayment of the sums due with respect to the
Facility whether or not then due and payable.
6. All sums due and payable under the Facility will, at the option of
the Lender, become immediately due and payable, and no further funds will be
advanced under the Facility, in the event of a Change of Control (as hereinafter
defined) of the Borrower without the express written consent of the Lender,
which may be granted or withheld in the Lender's sole and absolute discretion.
For purposes of this paragraph 6, a "Change in Control" shall mean the
occurrence of any event which causes Gould Investors, L.P. (acting through its
general partner, its officers and/or its employees) to no longer control the
management and operation of the Borrower, or any event which causes the current
principals of Gould Investors, L.P. to own, directly or indirectly, less than
51% of the general partnership interests in Gould Investors, L.P.
7 No material modifications or amendments shall be made with respect to
any Pledged Note, Pledged Mortgage or any other document executed in connection
therewith (collectively, "Other Documents" and each an "Other Document") without
the express prior written consent of the Lender, which may be granted or
withheld in the Lender's sole and absolute discretion. In addition, no
extensions of the maturity date of any Pledged Loans shall extend such maturity
date beyond six (6) years from the origination thereof without the express
written consent of the Lender, which may be granted or withheld in the Lender's
sole and absolute discretion.
8. In the event that a default (other than escrow shortfalls in an
amount not in excess of two (2%) percent of the unpaid principal balance of the
Pledged Loan to which such escrow shortfall relates) shall occur under any
Pledged Note, Pledged Mortgage or any of the Other Documents executed in
connection with any Pledged Loans (after such default, a "Defaulted Pledge
Loan"), and such default shall continue for a period of sixty (60) days from the
commencement thereof, the Pledged Mortgage securing such Defaulted Pledged Loan,
together with the Pledged Note and the Other Documents executed in connection
therewith, shall be reassigned to the Borrower and the Borrower shall
simultaneously be required to either (a) repay the principal amount of the
Facility to the extent necessary to cause the outstanding principal balance of
due with respect to the Facility to be less than or equal to the Borrowing Base
or (b) replace the Defaulted Pledged Loan with one of the following (each,
"Substitute Collateral") (i) a different Pledged Loan of equivalent or greater
comparable value, as determined by the Lender in its sole and absolute
discretion, which Pledged Loan shall (A) be secured by (x) a first Pledged
Mortgage held by the Borrower or an affiliate of the Borrower (which affiliate
shall execute and deliver a guarantee of the Facility in favor of the Lender and
grant the Lender a security interest in such Pledged Loan) encumbering income
producing properties located in the 48 contiguous continental United States or
the District of Columbia (as held by the Borrower from time to time, the "First
Mortgage Collateral") or (y) a second Pledged Mortgage or a wrap-around Pledged
Mortgage held by the Borrower or an affiliate of the Borrower (which affiliate
shall execute and deliver a guarantee of the Facility in favor of the Lender),
or a pledged participation interest held by the Borrower in a mortgage made by
the Borrower or a third party lender (the "Subordinate Collateral"), provided
that, in the case of a pledged participation interest in a mortgage made by a
third party lender, such mortgage would meet the requirements of this Agreement
with respect to the qualification of such mortgage as Substitute Collateral if
same were made by the Borrower, (B) not be monetarily delinquent (other than
escrow shortages in an amount not in excess of two (2%) percent of the unpaid
principal balance of the Pledged Loan to which such escrow shortfall relates)
for more than sixty (60) days or otherwise in default, (C) not have a
significantly impaired value (in the reasonable opinion of the Lender), (D) not
have a term in excess of five (5) years and (E) not be made to a joint venture
in which the Borrower or an affiliate is a member or venturer or (ii) a pledge
and security interest in one hundred (100%) percent of the ownership interests
in the fee owner of real property obtained by the Borrower as a result of the
foreclosure of a Defaulted Loan (hereinafter referred to as "Pledged REO"). The
Pledged Mortgage, Pledged Note and Other Documents with respect to any such
Substitute Collateral shall (i) be prepared on standard forms (the "Forms")
which have been preapproved by the Lender and (ii) be acceptable to Lender in
all respects in its reasonable discretion. Without limiting the generality of
the foregoing, prior to the Lender accepting any such Substitute Collateral, the
Lender will receive (i) the original Pledged Mortgage, Pledged Note, Other
Documents, original title insurance policy or a certified true copy of the
insurance policy or, if the title policy has not yet been issued, a copy of the
marked-up title report, and evidence of property and casualty insurance (all
satisfactory to the Lender in all respects in its reasonable discretion) with
respect to the Substitute Collateral, along with a written explanation of all
changes that have been made to the Forms in connection with such Substitute
Collateral, which changes shall be subject to review and approval by the Lender
and the Lender's counsel prior to the Lender accepting any such Pledged Loans
for assignment; (ii) an affidavit executed by a knowledgeable representative of
the Borrower, stating that such Pledged Loan or Pledged Loans being assigned are
not in default except to the extent permitted herein, and setting forth the
unpaid principal balance thereof; and (iii) an executed Collateral Assignment
with respect to such Substitute Collateral, in the form annexed hereto as
Exhibit B. With respect to any Substitute Collateral that is Pledged REO, the
Borrower shall provide the Lender with (i) copies of all organizational
documents of the fee owner thereof (certified as true, correct and complete);
(ii) the Borrower's original title insurance policy or a certified true copy of
the insurance policy or, if the title policy has not yet been issued, a copy of
the marked-up title report with respect to such Pledged REO, which shall
evidence that the fee owner thereof shall own fee simple title thereto, free and
clear of all material liens, claims and encumbrances; (iii) a signed and
notarized Pledge and Security Agreement (in form and substance satisfactory to
the Lender in its sole and absolute discretion), which Pledge and Security
Agreement shall provide, inter alia, that the Pledged REO and the ownership
interests in the fee owner of the Pledged REO shall not be sold, transferred or
further encumbered; (iv) signed and notarized assignments of membership or
partnership interests or stock powers in connection with the ownership interests
in the fee owner of such Pledged REO; and (v) if the ownership interests in such
Pledged REO are certificated, the original certificates therefor. The ownership
interests in the fee owner of any Pledged REO are hereinafter referred to as the
"Pledged REO Ownership Interests". The Bank reserves the right to obtain an
appraisal of any Pledged REO, at the Borrower's sole cost and expense, and to
use the value determined thereby to determine the amount that will be included
in the Borrowing Base as a result of the pledge of any such Pledged REO
Ownership Interests.
9. After request by the Lender, the Borrower, within ten (10) days and
at its expense, will furnish to the Lender a statement, duly acknowledged and
certified, setting forth the principal amount outstanding with respect to the
Facility, the rate of interest thereon, the date installments were last paid,
the offsets or defenses thereto, if any, and that the Note and this Agreement
have not been modified or, if modified, giving particulars of such modification.
10. Any notice, demand, statement, request or consent made hereunder
shall be in writing and will be deemed given when postmarked, addressed and
mailed to the address, as set forth above, of the party to whom such notice is
to be given, or to such other address as the Borrower or the Lender, as the case
may be, shall designate in writing in the manner hereinabove set forth.
11. The Lender shall assign any Pledged Note, Pledged Mortgage, Pledged
REO Ownership Interests and Other Documents (i) back to the Borrower upon (A)
payment to the Lender of an amount sufficient to reduce the outstanding
principal amount outstanding under the Facility (calculated exclusive of
Defaulted Loans) to an amount not less than the Borrowing Base, plus accrued and
unpaid interest thereon or (B) delivery of Substitute Collateral meeting the
requirements of paragraph 8 hereof to the Lender and the acceptance of same by
the Lender or (ii) to or at the direction of the Mortgagor, upon the payment to
the Lender of all amounts due with respect to the applicable Pledged Loans. The
Borrower will pay the Lender's reasonable expenses in connection with such
assignment, including, but not limited to, recording charges and reasonable
attorneys fees.
12. If any law or ordinance is enacted or adopted which imposes a tax,
either directly or indirectly, on the Note, this Agreement or the Facility, the
Borrower will pay such tax with interest and penalties thereon, if any. In the
event that the Lender shall be advised by counsel chosen by it that the payment
of such tax or interest and penalties by the Borrower would be unlawful, taxable
to the Lender or unenforceable or would provide the basis for a defense of
usury, then and in that event the Lender shall have the option, by written
notice of not less than ninety (90) days, to declare all amounts then
outstanding with respect to the Facility immediately due and payable and to
refuse to make any additional advances with respect to the Facility.
13. If at any time the United States of America, any state thereof or
any subdivision of any such state shall require revenue or other stamps to be
affixed to the Note or this Agreement, or shall impose any other tax or charge
on the same, the Borrower will pay for the same with interest and penalties
thereon, if any.
14. The Borrower will keep proper books of records and account with
respect to their operations in accordance with generally accepted accounting
principles, and will furnish the Lender with annual accounting statements within
ninety (90) days after the end of each calendar year, in form and substance
satisfactory to the Lender in all respects, which shall disclose in reasonable
detail all earnings and expenses of the Borrower, certified by independent
certified public accountants of recognized standing satisfactory to the Lender.
In addition, the Borrower shall submit to the Lender within fifteen (15) days of
the end of each calendar month (a) a monthly aging report with respect to the
Pledged Loans, which aging report shall be in form and substance satisfactory to
the Lender in its sole and absolute discretion, (b) a schedule of any Pledged
Loans modified or extended during such month, and a description of such
modification or extension and (c) a description of any uncured monetary or other
material events of default under any of the Pledged Notes, the Pledged Mortgages
and/or any of the Other Documents. Additionally, the Borrower will submit to the
Lender within fifteen (15) days of the end of each calendar quarter a quarterly
Borrowing Base report, a quarterly report of delinquent or defaulted Pledged
Loans and detailed portfolio information, in the form previously submitted to
and approved by the Lender. The Borrower shall also submit to the Lender copies
of its annual 10K statement to the SEC, its quarterly 10-Q statement to the SEC,
its annual report and any interim 8-K filings with the SEC, within ten (10) days
of the completion of same.
15. The Borrower will observe and perform each and every term to be
observed or performed by the Borrower pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Collateral.
16. The Lender shall not make an advance under the Facility unless and
until, with respect to each advance, the Borrower has satisfied the following
conditions precedent:
(a) The Lender shall have received all documents and
agreements comprising the Collateral, including without limitation an assignment
of each Pledged Mortgage from the Borrower to the Lender in form annexed hereto
as Exhibit B and each Pledged Note and Pledged Mortgage.
(b) Receipt of Borrowing Notice. The Lender shall have
received, no later than 12:00 noon (New York City time) on the Business Day on
which the Loan is requested to be made hereunder, a borrowing notice (a
"Borrowing Notice") from an authorized officer of Borrower, specifying the
amount of the requested advance, and the date on which it is requested to be
made. Each Borrowing Notice shall be in writing signed by Borrower, shall
certify the then outstanding principal amount of all existing Pledged Loans
under the Facility, and certify that both before and after funding the requested
advance, Borrower continues to be in compliance with the covenants, terms and
conditions set forth in the Agreement.
(c) All of the representations and warranties of Borrower
contained herein and in each other Facility Document shall be true and correct
in all material respects to the same extent as though made on and as of any date
of funding each advance.
(d) No Event of Default (as hereinafter defined) or event
which upon notice, lapse of time or both, would constitute an Event of Default
shall exist or have occurred or shall result from the making of the requested
advance,.
(e) No law or regulation shall prohibit, and no order,
judgment or decree of any court, arbitrator or governmental authority shall
enjoin or restrain, the Lender from making the requested advance.
(f) After giving effect to the amount of the requested
advance, the aggregate outstanding principal balance under the Facility shall
not exceed the lesser of (x) the Borrowing Base and (y) Facility Amount.
(g) The Borrower shall have paid all of the Lender's and
Participant's (as defined in the Note) reasonable fees and expenses, including,
without limitation, the reasonable legal fees and expenses of the Lender's and
Participant's counsel incurred in connection with the acceptance, review and
retention of the documents from time to time delivered to the Lender as
Collateral.
17. To secure the Obligations (as hereinafter defined), the Borrower
hereby grants to the Lender a first priority perfected and continuing security
interest in and to the Collateral, including the following property of the
Borrower now owned or hereafter acquired, wherever located and of every kind,
nature and description, including but not limited to: (i) all Pledged Loans
and/or Pledged REO Ownership Interests; (ii) all Supporting Obligations (as
defined under the UCC); (iii) the Pledged Notes assigned or negotiated by
Borrower to the Lender pursuant to this Agreement; (iv) the Pledged Mortgages;
(v) an assignment of each Pledged Mortgage from the Borrower to the Lender in
recordable form but unrecorded, along with the original recorded intervening
assignments (or if the original assignments have not been returned from the
applicable recording office, a copy of the assignments certified by Borrower or
the settlement agent to be a true and complete copy of the original assignment
submitted for recording); (vi) all monies, securities or other property and
deposit accounts of the Borrower held by the Lender or any of its affiliates;
(vii) all books and records relating to the business of the Borrower including
any computer programming data relating to the foregoing; (viii) each of the
Other Documents; (ix) each title policy, title binder or commitment to issue
title insurance insuring the Pledged Mortgages and the lien thereof, (x) each
policy of hazard insurance, rental interruption insurance, boiler insurance,
liability insurance or other forms of insurance now or hereafter issued with
respect to the Mortgaged Properties and improvements encumbered by the Pledged
Mortgages and the proceeds thereof, in which policies and proceeds the Borrower
shall have an interest as a mortgagee or otherwise; (xi) all deposit accounts,
credits, moneys, property or other security of any nature whatsoever now or
hereafter available to the Borrower for application in reduction, in whole or in
part, of the Pledged Loans; (xii) all accessions and additions to, substitutions
and replacements, products and proceeds of each of the foregoing in any form
whatsoever; and (xiii) the Collateral. As used in this Agreement, "Obligations"
shall mean all obligations, liabilities and indebtedness of the Borrower to the
Lender, whether now existing or hereafter created, absolute or contingent,
direct or indirect, due or not, whether created directly or acquired by
assignment or otherwise, including without limitation, all obligations,
liabilities, and indebtedness of the Borrower arising under or relating to this
Agreement, the Note or any other Facility Document, which shall include, without
limitation, all obligations, liabilities and indebtedness of the Borrower with
respect to the principal of and interest on the Loans, and all fees, costs,
expenses and indemnity obligations of the Borrower hereunder, or under any other
Facility Document.
18. The Borrower represents and warrants to the Lender as follows:
(a) The Borrower owns the Collateral free and clear of any
lien, security interest, charge or encumbrance, except the security interest
created hereby, and such security interests to which the Lender has consented in
writing. No effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Lender relating to this
Agreement;
(b) This Agreement creates a valid and perfected first
priority security interest in the Collateral, securing the payment of the
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been duly taken;
(c) No authorization, approval or other action by, and no
notice to or filing with, (except for the filing of UCC-l financing statements
in appropriate jurisdictions) any governmental authority or regulatory body is
required either (i) for the grant by the Borrower of the security interest
granted hereby or for the execution, delivery or performance of this Agreement
by the Borrower; or (ii) for the perfection of or the exercise by the Lender of
its rights and remedies hereunder;
(d) The Borrower (i) is a Massachusetts business trust in good
standing under the laws of the Commonwealth of Massachusetts and is duly
qualified in all other jurisdictions wherein the nature of the Borrower's
business or the character of its properties makes qualification necessary; (ii)
has the power and authority to carry on its business as now conducted and to own
or hold under lease the assets and properties it purports to own or hold under
lease; (iii) is duly qualified, licensed or registered to transact its business
and is in good standing in every jurisdiction in which failure to be so
qualified, licensed or registered could have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of the
Borrower ("Material Adverse Effect"); (iv) has the power and authority to
execute and deliver this Agreement, and each of the other Facility Documents to
which it is or will be a party and to perform all its obligations thereunder;
(v) no action by, and no notice to or filing with (except for the filing of
UCC-1 financing statements in appropriate jurisdictions, and except for the
requirement that the Borrower file a Form 8-K with the Securities and Exchange
Commission upon the signing of this Agreement), any governmental authority or
regulatory body is required either for the grant by the Borrower of the security
interest granted hereby or for the execution, delivery or performance of this
Agreement by the Borrower; or for the perfection of or the exercise by the
Lender of its rights and remedies hereunder and (vi) has its executive office
and principal place of business at 60 Cutter Mill Road, Suite 303, Great Neck,
New York 10021.
(e) The execution and delivery by the Borrower of this
Agreement, the Note and each of the other documents and certificates executed in
connection herein on the date hereof or from time to time hereafter,
(collectively, the "Facility Documents") to which it is or will be a party and
the performance by the Borrower of all of its obligations thereunder: (i) will
not violate or be in conflict with (A) any provision of applicable law
(including, without limitation, any applicable usury or similar law) or (B) any
order, rule or regulation of any court or other governmental authority; (ii)
will not violate, be in conflict with, result in a breach of or constitute
default (with or without the giving of notice or the passage of time or both)
under any material instrument, indenture, agreement or other obligation to which
it is a party or by which it or any of its assets and properties is or may be
bound or subject; and (iii) except as specifically contemplated by this
Agreement, will not result in the creation or imposition of any lien, charge or
encumbrance of any nature upon any of its assets and properties. This Agreement
and each of the other Facility Documents to which the Borrower is, or will be a
party, when executed and delivered, will be the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its respective terms
and provisions.
(f) There are no actions, suits or proceedings (whether or not
purportedly on behalf of the Borrower) pending or, to the best of the Borrower's
knowledge, threatened or contemplated at law, in equity, in arbitration or
before any authority involving or affecting: (i) the Borrower that, if adversely
determined, could have a Material Adverse Effect; (ii) the Obligations; (iii)
the Collateral; or (iv) this Agreement and the other Facility Documents; nor to
the best of the Borrower's knowledge is it in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any authority, which
default could have or has had a Material Adverse Effect.
(g) Any financial statements of the Borrower provided to the
Lender in connection with this transaction: (i) were prepared in good faith to
be accurate statements of the Borrower's business, (ii) show all indebtedness
and other liabilities, direct or contingent, of the Borrower as of the date
thereof (including, without limitation, liabilities for taxes and material
commitments), and (iii) are complete, accurate and a fair presentation, in all
material respects, of the Borrower's financial condition as of the date thereof
and results of operations for the period covered thereby. Since the date of such
financial statements, no event or events have occurred that individually or in
the aggregate has had a Material Adverse Effect.
(h) Each of the Pledged Notes, the Pledged Mortgages, the
Other Documents and each instrument, receivable, document of title, contract and
other intangible included in the Collateral is valid, legally binding and
enforceable in accordance with its respective terms and provisions, does not
violate or conflict with any provision of applicable law, has not been amended
or modified in any material respect or prepaid, and is assignable and has been
duly assigned to the Lender in accordance with the terms hereof; and, to the
best of the Borrower's knowledge, each such instrument or other document was
executed by persons of full age and legal capacity and contains no forgeries or
unauthorized signatures.
(i) No representation or warranty of the Borrower made or
contained in this Agreement or any other Facility Document and no report,
statement, certificate, schedule or other document or information furnished or
to be furnished by or on behalf of the Borrower in connection with the
transactions contemplated by this Agreement and the other Facility Documents
contains or will contain a misstatement of a material fact or omits or will omit
to state a material fact required to be stated therein in order to make it, in
the light of the circumstances under which made, not misleading.
(j) That the Borrower will furnish to the Lender from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection herewith and in such form as the Lender may
reasonably request. Exhibit A annexed hereto and made a part hereof shall be
deemed to be supplemented, updated and amended, effective upon funding of each
Advance, to add each new Pledged Loan relating thereto, to be part of the
Collateral listed thereon. Exhibit A annexed hereto and made a part hereof shall
be deemed to be amended automatically and immediately upon the addition to,
substitution or replacement of the Collateral pledged by Borrower hereunder to
Lender, and such addition, substitution or replacement shall be further
evidenced by receipt by the Lender of the monthly summary statements as
described herein in Paragraph 14.
(k) The Mortgagors are and (at the funding of any new Pledged
Loan by Borrower, shall be) the fee owners of the premises encumbered by the
Pledged Mortgages and the obligor under the Pledged Notes, and notices may be
sent to such Mortgagors at the addresses set forth in Exhibit A to this
Agreement.
(l) The Pledged Mortgages constitute valid and enforceable
liens encumbering the Mortgaged Properties.
(m) There are no defenses, claims, counterclaims, set-offs,
rights of recoupment, abatements or other claims or determinations of any nature
whatsoever with respect to the Pledged Notes, the Pledged Mortgages or the
indebtedness evidenced and secured thereby or with respect to any other
instruments or documents evidencing, securing or guaranteeing payment of the
Pledged Loans, the Other Documents and all of the provisions of the Pledged
Notes, the Pledged Mortgages and the Other Documents are in full force and
effect.
(n) There are no defaults existing under the Pledged Notes,
the Pledged Mortgages or the Other Documents, which have remained uncured for a
period of more than sixty (60) days.
(o) No condemnation or eminent domain proceedings have been
commenced or, to the best of the Borrower's knowledge, threatened with respect
to the Mortgaged Properties and no such condemnation or eminent domain
proceedings are about to be commenced.
(p) The Pledged Notes, the Pledged Mortgages and the Other
Documents and the provisions thereof have not been amended, modified or altered
in any manner whatsoever.
(q) The Borrower knows of no fact or circumstance which would
affect the enforceability, validity or priority of the Pledged Notes, the
Pledged Mortgages or the Other Documents, other than those facts or
circumstances set forth in the title policies, if any, insuring the Pledged
Mortgages and the lien thereof or which would affect the ability of the Owner(s)
and any other person or parties liable under the Pledged Notes, the Pledged
Mortgages and the Other Documents to continue to perform and observe the terms,
covenants and provisions of the Pledged Notes, the Pledged Mortgages and any
Other Documents. The Borrower represents and warrants that as of the date
hereof, the aggregate unpaid principal balance of the Pledged Notes is
$164,688,000.
19. The Borrower covenants and agrees that, from the date hereof and
until the Obligations have been fully paid and satisfied, unless the Lender
shall consent otherwise in a writing signed by the Lender:
(a) Borrower shall monitor and remain in compliance with the
Borrowing Base limitations set forth in this Agreement.
(b) Upon request of the Lender, from time to time, the
Borrower shall permit representatives designated by the Lender to (i) have
access to the premises of the Borrower, the books and records of the Borrower
and the Collateral, (ii) make copies of, or excerpts from, those books and
records and (iii) discuss the Collateral or the accounts, assets, business,
operations, properties or condition, financial or otherwise, of the Borrower
with its officers, directors, employees and accountants. The Lender agrees to
keep such documents confidential and shall not disclose any such information
except: (w) pursuant to court order; (x) as required by any regulatory agency;
(y) in connection with any action or proceeding to enforce its rights in
connection with the Facility Documents or otherwise; or (z) to any assignee or
participant in the Pledged Loans or the Facility.
(c) The Borrower shall defend and enforce its right, title and
interest in and to any portion of (i) the Collateral, or (ii) its assets and
properties, the loss of which could have a Material Adverse Effect, and the
Borrower, at its sole expense, shall defend the Lender's right, title and
interest in and to the Collateral, each against all manner of claims and demands
on a timely basis to the full extent permitted by applicable law.
(d) The Borrower shall not, without the prior written approval
of the Lender, directly or indirectly consolidate or merge with or acquire
control of any other person or entity or offer or agree to do so.
(e) The Borrower shall execute and deliver, upon the Lender's
written request, any reasonable notice, statement, instrument, document,
agreement or other papers and/or to perform any act reasonably requested by the
Lender which may be necessary to create, perfect, preserve, validate or
otherwise protect any security interest granted pursuant hereto or to enable the
Lender to exercise and enforce its rights hereunder or with respect to such
security interest.
(f) The Borrower will furnish to the Lender from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection herewith and such other documents and
information with respect to any Pledged Loan, all in such form and substance as
the Lender may reasonably request. The Borrower further agrees to provide the
Lender with such information as the Lender may from time to time request with
respect to the location of any of its respective places of business. In
addition, the Lender will be notified promptly in writing of any change in its
legal name, its jurisdiction or form of organization, or the location of any
office where records concerning any of the accounts that constitute a portion of
the Collateral are maintained or of a change in location of the Borrower's
principal place of business.
(g) The Borrower shall notify the Lender of the occurrence of
any material default under the Pledged Notes and/or the Pledged Mortgages or of
the occurrence of any event, which but for the passage of time or the giving of
notice or both, would constitute a material default under the Pledged Notes
and/or the Pledged Mortgages, on the same day that the Borrower shall first be
given notice of or shall first become aware of the occurrence of any such
default or event and the Borrower shall immediately upon request by the Lender
give any notice which shall be required to cause any such event to constitute a
default under the Pledged Notes and/or the Pledged Mortgages (any such default
or event being hereinafter referred to as a "Collateral Event of Default").
(h) The Borrower shall not, without the prior consent of the
Lender, enter into any agreement, which shall materially adversely affect the
Collateral or which shall release from the lien of the Pledged Mortgages any
portion of any Mortgaged Property or which shall release any party, now or
hereafter liable or guaranteeing the payment of any portion of the indebtedness
evidenced and secured by the Pledged Notes and the Pledged Mortgages or
performance of the terms, covenants and provisions of the Pledged Notes, the
Pledged Mortgages or the Other Documents or which shall release any other
security of any nature whatsoever, now or hereafter, held by the Borrower for
the payment of any portion of the indebtedness evidenced and secured by the
Pledged Notes and the Pledged Mortgages.
(i) At all times throughout the term hereof, the Borrower
shall maintain cash or readily marketable securities (net of margin loans due to
brokers) equal to not less than Fifteen Million and 00/100 ($15,000,000.00)
Dollars, of which the cash portion shall be not less than the greater of (i)
sixty six and two thirds (66.67%) percent of the Borrower's operating expenses
for the immediately preceding fiscal quarter (net of advisor's fees and non-cash
items) or (ii) Two Million and 00/100 ($2,000,000.00) Dollars. At all times
throughout the term hereof, the Borrower shall not have any other credit
facilities (other than the Facility contemplated hereby) other than margin
investment accounts.
(j) Until the earlier of (i) the date that the Borrower shall
obtain any additional equity financing or (ii) May 1, 2006, the Borrower shall
maintain a Debt Service Coverage Ratio of not less than 1.25:1.00. From and
after the earlier of (i) the date that the Borrower shall obtain an additional
equity financing or (ii) May 1, 2006, the Borrower shall maintain a Debt Service
Coverage Ratio of not less than 1.50:1.00 for the previous four (4) quarters.
"Debt Service Coverage Ratio" shall mean, for any fiscal quarter, the ratio of
(a) net income, plus, to the extent deducted in determining net income, the sum
of (A) interest expense, and (B) all depreciation and amortization expenses or
charges to (b) the sum of (i) interest expense plus (ii) the scheduled
installments of principal on all indebtedness (including capital leases) having
a final maturity of one year or more from the date of incurrence thereof and the
outstanding principal amount of the Pledged Loans. All of the foregoing
categories shall be determined with respect to the Borrower in accordance with
generally accepted accounting principles applied on a consistent basis and shall
be calculated (without duplication) on a quarterly basis on a rolling four (4)
fiscal quarter basis.
(k) On the date hereof, and until the earlier of (i) the date
that the Borrower shall obtain any additional equity financing or (ii) May 1,
2006, the Borrower shall not permit its ratio of shareholder equity to the
aggregate of its outstanding credit facility amounts and its margin loan debt,
determined in accordance with generally accepted accounting principles applied
on a consistent basis on a quarterly basis, to be less than 0.8:1.00. From and
after the earlier of (i) the date that the Borrower shall obtain an additional
equity financing or (ii) May 1, 2006, the Borrower shall not permit at any time
its ratio of shareholder equity to indebtedness for borrowed money, determined
in accordance with generally accepted accounting principles applied on a
consistent basis, to be less than 1.0:1.00.
(l) The Borrower shall on the date hereof increase its reserve
for loan losses to no less than 0.5% of its outstanding portfolio of Loans for
purposes of making the calculations under this paragraph 19, and shall maintain
such reserve at such increased amount until the Facility is repaid in full and
closed.
(m) Borrower shall deliver to the Lender on a quarterly basis,
and at other times within ten (10) days of Lender's request a certificate
certifying the Borrower's compliance with the covenants set forth in the
preceding clauses (i), (j), (k) and (l), which certification shall show the
quantitative computation of the financial covenants set forth in those clauses.
20. The outstanding amount due with respect to the Facility, together
with all accrued and unpaid interest thereon and all other sums due in
connection therewith, shall become due, and the Lender shall have no obligation
to make any further advances with respect to the Facility, at the option of the
Lender upon any one or more of the following events (each, an "Event of
Default"):
(a) if any payment due hereunder is not paid within ten
(10) days after the same is due;
(b) Intentionally omitted;
(c) if the Policies are not kept in full force and effect
or if the Policies are not assigned and delivered to the Lender upon request;
(d) if the Borrower does not furnish a statement, in the
manner provided herein, of the amount then due and owing with respect to the
Facility and the offsets or defenses thereto, if any;
(e) if without the consent of the Lender any material
modification, amendment or extension is made to any of the Pledged Notes, the
Pledged Mortgages and/or the Other Documents;
(f) if, within ninety (90) days of the occurrence a Collateral
Event of Default, the Borrower shall not have complied with the provisions of
paragraph 8 hereof.
(g) if any covenant, representation or warranty of the
Borrower or of any person (a "Guarantor") guaranteeing payment of the sums due
with respect to the Facility or any portion thereof or the performance by the
Borrower of any of the terms, this Agreement or the Note made herein or in any
such guaranty or in any certificate, report, financial statement or other
instrument furnished in connection with the making of the Note, this Agreement
or any such guaranty, shall prove false or misleading in any material respect;
(h) if the Borrower or any Guarantor shall make an assignment
for the benefit of creditors;
(i) if a receiver, liquidator or trustee of the Borrower or of
any Guarantor shall be appointed or if the Borrower or any Guarantor shall be
adjudicated a bankrupt or insolvent or if any petition for bankruptcy,
reorganization or arrangement pursuant to the Federal Bankruptcy Code or any
similar federal or state statute shall be filed by or against the Borrower or
any Guarantor or if any proceeding for the dissolution or liquidation of the
Borrower or of any Guarantor shall be instituted and, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by the
Borrower or such Guarantor, upon the same not being discharged, stayed or
dismissed within ninety (90) days;
(j) if the Borrower does not reimburse the Lender upon demand
for all reasonable expenses incurred in remedying any default of the Borrower
hereunder or in appearing in, defending or bringing any action or proceeding to
protect the Lender's interest in the Collateral, including reasonable attorneys'
fees, with interest as provided herein;
(k) the Borrower shall fail to comply with the requirements of
paragraph 19(i), (j); (k) or (l) hereof or if for fifteen (15) days after notice
from the Lender the Borrower shall continue to be in default under any other
covenant of the Borrower hereunder or under the Note (not covered by any other
clause of this paragraph 20);
(l) if, after a default thereunder, the Lender elects to
enforce its rights under the Note or any instrument which may be held by the
Lender as additional security for the repayment of the sums due with respect to
the Facility.
21. Upon the occurrence of an Event of Default, the Lender shall have
all of the rights and remedies provided to a secured party by the Uniform
Commercial Code in effect in New York State or the Commonwealth of
Massachusetts, as applicable, at that time. The Lender shall also have the right
to set-off against any sums owed to the Lender and reduce to the Lender's
immediate possession any and all amounts, balances, proceeds and funds held by
the Lender on any account of the Borrower or its affiliates maintained by the
Lender. Furthermore, in any such event, to the extent permitted under applicable
law, full power and authority are hereby given to the Lender to sell, assign,
and deliver the whole of the Collateral or any part thereof, at any time at any
broker's board, or at public or private sale, at the Lender's option, and no
delay on the Lender's part in exercising any power of sale or any other rights
or options hereunder, shall constitute a waiver thereof, or limit or impair the
Lender's right to take any action or to exercise any power of sale or any other
rights hereunder, without notice or demand, or prejudice the Lender's rights as
against the Borrower in any respect. In addition thereto, the Borrower further
agrees that (a) written notice mailed to the Borrower at its regular address
given ten (10) days prior to the date of public sale of any of the Collateral
subject to the security interest created herein or prior to the date after which
private sale or any other disposition of said Collateral will be made shall
constitute reasonable notice; (b) in the event of the sale or other disposition
of any such Collateral the Lender may apply the proceeds of any such sale or
disposition to the satisfaction of the Lender's reasonable attorneys' fees,
legal expenses, and other reasonable costs and expenses incurred in connection
with the Lender's taking, re-taking, holding, preparing for sale, and selling of
the Collateral; (c) without precluding any other methods of sale, the sale of
Collateral shall have been made in a commercially reasonable manner if, among
other ways, it is conducted in conformity with reasonable commercial practices
of creditors disposing of similar property; (d) the Lender may require the
Borrower to assemble the Collateral, taking all necessary or appropriate action
to preserve and keep it in good condition and make the Collateral available to
the Lender at a place and time convenient to all parties, all at the expense of
the Borrower; (e) the Lender shall have the right to: (i) prohibit the Borrower
from taking any action otherwise permitted by this Agreement and the other
Facility Documents; (ii) notify each of the owners, Mortgagors, obligors,
lessees, custodians and other parties with respect to or interested in any item
of the Collateral of the Lender's interest therein or of any action proposed to
be taken with respect thereto, and direct one or more of those parties to make
all payments, distributions and proceeds otherwise payable to the Borrower with
respect thereto directly to the Lender or its order until notified by the Lender
that all the Obligations have been fully paid and satisfied; (iii) receive and
retain all payments, distributions and proceeds of any kind with respect to any
and all of the Collateral; (iv) take any action with respect to the offer, sale,
lease or other disposition, and delivery of the whole of, or from time to time
any one or more items of, the Collateral, including, without limitation: (A) to
sell, assign, lease or otherwise dispose of the whole of, or from time to time
any part of, the Collateral, for cash, credit or any other asset or property,
for immediate or future delivery, and for such consideration and upon such terms
and subject to such conditions as the Lender in its sole and absolute discretion
may determine, and the Lender may purchase (the consideration for which may
consist in part of cancellation of indebtedness) or any other person may
purchase the whole or any one or more items of the Collateral so sold free and
clear of any and all rights, powers, privileges, remedies and interest of the
Borrower (which the Borrower has expressly waived); or (B) to postpone or
adjourn any such auction, sale or other disposition or cause the same to be
postponed or adjourned from time to time to a subsequent time and place or
abandon or cause the abandonment of the same, all without any advertisement or
other notice thereof; (v) transfer or cause the transfer of the ownership of all
or any part of the Collateral to its own name and have such transfer recorded in
any jurisdiction(s) and publicized in any manner deemed appropriate by the
Lender; and (vi) in addition to, and not by way of limitation of, any of the
rights specified above, exercise or enforce any and all provisions of applicable
law, whether as a secured party in possession of collateral or otherwise; (f)
the Lender shall collect the cash proceeds received from any sale or other
disposition or from any other source in connection with such collection and sale
or disposition of Collateral and apply the same to the payment of all sums due
to Lender under the Facility Documents in such order as the Lender shall
determine in its sole and absolute discretion; (g) any funds received from or on
behalf of the Borrower (whether pursuant to the terms and provisions of this
Agreement or otherwise) by the Lender and in the event any of the Pledged Notes
are repaid to the Borrower, any funds received by the Lender as a result
thereof, shall be applied to the following items in such manner and order as the
Lender may determine in its sole and absolute discretion: (i) the payment to or
reimbursement of the Lender for any expenses for which it is entitled to be paid
or reimbursed pursuant to any of the provisions of this Agreement and the other
Facility Documents (including reasonable attorneys' disbursements, expenses and
fees); (ii) the payment of accrued and unpaid interest on the Obligations; (iii)
the payment of the outstanding principal on the Obligations; (iv) the
establishment or maintenance of any cash collateral required or permitted under
this Agreement or any other Facility Documents; and (v) the payment in full of
all other Obligations under this Agreement and the other Facility Documents. In
the event any funds remain after satisfaction in full of the Obligations, then
the remainder shall be returned to the Borrower or any other party entitled to
same, subject, however, to any rights or interest the Lender may have therein
under any other instrument, agreement or document or applicable law. All
advances and payments made pursuant to this Agreement and the other Facility
Documents may be recorded by the Lender, and such records shall be presumptive
as to the existence and amounts thereof; (h) if the amount of all proceeds
received with respect to any liquidation of the Collateral that shall be applied
to payment of the Obligations shall be insufficient to pay and satisfy all of
the Obligations in full, the Borrower acknowledges that it shall remain liable
for any deficiency, together with interest thereon and costs of collection
thereof (including reasonable attorneys' disbursements, expenses and fees), in
accordance with the terms and provisions of this Agreement and the other
Facility Documents; (i) the Borrower hereby expressly waives, to the extent such
waiver is permitted by applicable law, any and all rights, powers, privileges,
remedies and interest accorded to it now or at any time in the future under
applicable law respecting (y) counterclaim, set-off, recoupment, abatement,
reduction, and other claims and determinations against the Lender and any other
person, and (z) notice, appraisal, evaluation, stay, extension, moratorium,
marshaling of assets, exemption and equity of redemption, provided, however,
that none of the terms and provisions of this Agreement and the other Facility
Documents are intended to confer upon the Lender any right, power, privilege,
remedy or interest not permissible under applicable law notwithstanding the
foregoing waivers; and (j) the rights, powers, privileges, remedies and interest
conferred upon the Lender in respect of the Collateral by this Agreement, the
other Facility Documents and applicable law are solely to enable the Lender to
protect and preserve the Collateral, as well as to realize upon it in accordance
with the Agreement and the other Facility Documents, all in such manner as the
Lender in its sole and absolute discretion may elect, and shall not impose upon
the Lender any duty or other obligation to exercise or enforce any such right,
power, privilege, remedy or interest. Any exercise or other enforcement of any
such right, power, privilege, remedy or interest, if undertaken by the Lender,
in its sole and absolute discretion, may be delayed, discontinued or otherwise
not pursued or exhausted for any reason whatsoever (whether intentionally or
otherwise). Without limiting the generality of the foregoing, the Lender shall
be under no duty or obligation to protect or preserve any of the Collateral,
perform any obligation or duty of the Borrower under any of the Collateral, or
take any action to mitigate or otherwise reduce any damage or other loss or to
otherwise collect, exercise or enforce any claim, right or other interest
arising under or with respect to the Collateral.
22. After the occurrence of an Event of Default, which shall then be
uncured or unremedied, the Lender shall have the unconditional right to notify
the Mortgagors of the security interest granted and assigned by the Borrower to
the Lender pursuant to this Agreement and to direct the Mortgagors to make all
payments of sums due or hereafter becoming due pursuant to the Pledged Notes
and/or the Pledged Mortgages directly to the Lender. The Borrower shall, upon
request by the Lender, sign and consent to all notices and directions given by
the Lender to the Mortgagors pursuant to this paragraph. The Lender's cost of
collection and enforcement, including reasonable attorneys' fees and
out-of-pocket expenses, shall be borne solely by the Borrower. Such costs of
collection and enforcement shall be paid by the Borrower to the Lender, on
demand, and shall be secured by this Agreement and the other Facility Documents.
The Lender shall have the unconditional right, at its option, to apply all sums
received by the Lender pursuant to this paragraph against the payment of sums
outstanding with respect to the Facility in such priority and proportions as the
Lender, in its sole and absolute discretion, shall deem proper. The balance of
any sums held by the Lender, if any, after payment of the outstanding Loans in
full shall be paid over to the Borrower or any other party entitled to same by
the Lender.
23. The Lender is authorized, at the Lender's option, and is hereby
irrevocably designated as attorney-in-fact with full power of substitution, as
the Borrower's true and lawful attorney-in- fact with full irrevocable power and
authority in the place and stead of the Borrower and in the name of the Borrower
or in the Lender's own name, and the Borrower hereby gives the Lender the power
and right, on behalf of the Borrower, without notice to or assent by the
Borrower to do the following:
(a) File any financing statements or amendments thereto in any
jurisdiction the Lender deems appropriate with respect to any of the Collateral;
and the Borrower agrees to reimburse the Lender for the reasonable expense of
any such filing, including reasonable attorneys' fees.
(b) After the occurrence of an Event of Default, which shall
then be uncured or unremedied, ask, demand, collect, sue for, recover, receive,
compound, and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;
(c) receive, endorse and collect any drafts or other
instruments, documents, chattel paper or other evidence of indebtedness,
supporting obligations or letters of credit or other installment made payable to
the Borrower in connection with any of the Collateral and to credit to the
account of the Borrower with the proceeds thereof;
(d) After the occurrence of an Event of Default, which shall
then be uncured or unremedied, file any claims or take any action or institute
any proceeding which the Lender deems necessary or desirable, including, but not
limited to, a foreclosure proceeding or action for the collection of any
Collateral or otherwise to enforce or protect its rights with respect to the
Collateral, including but not limited to any notification to any account debtors
of the Borrower;
(e) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs insurance called for by the terms of this Agreement and to
pay all or any part of the premiums therefor and the costs thereof; and
(f) After the occurrence of an Event of Default, which shall
then be uncured or unremedied, (A) to direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due, and to
become due thereunder, directly to the Lender or as the Lender shall direct; (B)
to receive payment of and receipt for any and all moneys, claims and other
amounts due, and to become due at any time, in respect of or arising out of any
Collateral; (C) to sign and indorse any invoices, assignments, verifications and
notices in connection with accounts and other documents constituting or relating
to the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or proceeding brought
against the Borrower with respect to any Collateral; (F) to settle, compromise
or adjust any suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Lender may deem
appropriate; (G) to license or, to the extent permitted by an applicable
license, sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any patent or trademark, throughout the world
for such term or terms, on such conditions, and in such manner, as the Lender
shall in the Lender's sole and absolute discretion determine; and (H) generally
to sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Lender were the
absolute owner thereof for all purposes, and to do, at the Lender's option and
the Borrower's expense, at any time, or from time to time, all acts and things
which the Lender reasonably deems necessary to protect, preserve or realize upon
the Collateral and the Lender's lien therein, in order to effect the intent of
this Agreement, all as fully and effectively as the Borrower might do.
(i) The Borrower hereby ratifies, to the extent
permitted by law, all that the attorneys acting pursuant to this paragraph shall
lawfully, and in good faith do or cause to be done by virtue hereof. The power
of attorney granted pursuant to this paragraph 23 is a power coupled with an
interest and shall be irrevocable until the Obligations are indefeasibly paid
in full.
(ii) The powers conferred on the Lender hereunder are
solely to protect the Lender's interest in the Collateral and shall not impose
any duty upon the Lender to exercise any such powers. The Lender shall be
accountable only for amounts that the Lender actually receives as a result of
the exercise of such powers and neither the Lender nor any of its officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act, except for the Lender's own gross negligence or willful
misconduct.
(iii) The Borrower also authorizes the Lender, at any
time and from time to time upon an Event of
Default (i) to communicate in the Lender's own name with any party to any
contract with regard to the assignment of the right, title and interest of the
Borrower in and under the contracts hereunder and other matters relating
thereto, and (ii) to execute, in connection with the sale provided for in this
Agreement, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
24. Upon the occurrence of an Event of Default and upon the Lender
exercising its option to declare all sums due with respect to the Facility
immediately due and payable by reason thereof, the Borrower will pay, from the
date of that event, interest at the rate of 24% per annum (the "Default Rate").
Notwithstanding anything contained in this paragraph 24 to the contrary, except
with respect to monetary defaults, Lender shall provide Borrower with thirty
(30) days written notice of defaults hereunder prior to the Lender exercising
its option to declare all sums due with respect to the Facility immediately due
and payable by reason thereof.
25. If the Borrower fails to make any payment or to do any act as
herein provided, the Lender may, but without any obligation to do so and without
notice to or demand on the Borrower and without releasing the Borrower from any
obligation hereunder, make or do the same in such manner and to such extent as
the Lender may deem necessary to protect the security hereof, the Lender being
authorized to appear in, defend or bring any action or proceeding to protect its
interests in the Mortgaged Properties or collect the sums due with respect to
the Facility. The cost and expense thereof (including reasonable attorneys'
fees), with interest as provided in this paragraph, shall be due from Borrower
upon demand made by the Lender. All such costs and expenses incurred by the
Lender in remedying such default or in appearing in, defending or bringing any
such action or proceeding shall be paid with interest at the Default Rate for
the period after notice from the Lender that such cost or expense was incurred
to the date of payment to the Lender. All such costs and expenses incurred by
the Lender pursuant to the terms hereof, with interest, shall be deemed to be
secured by the Collateral.
26. The failure of the Lender to insist upon strict performance of any
term of the Note or this Agreement shall not be deemed to be a waiver of any
term of the Note or this Agreement. The Borrower shall not be relieved of the
Borrower's obligations hereunder by reason of (a) the failure of the Lender to
comply with any request of the Borrower or any Guarantor to take any action to
enforce any of the provisions hereof or of the Note, (b) the release, regardless
of consideration, of the whole or any part of the Collateral, or (c) any
agreement or stipulation by the Lender extending the time of payment or
otherwise modifying or supplementing the terms of the Note or this Agreement.
The Lender may resort for the payment of sums outstanding with respect to the
Facility to any other security held by the Lender in such order and manner as
the Lender, in its sole and absolute discretion, may elect. The rights of the
Lender under this Agreement shall be separate, distinct and cumulative and none
shall be given effect to the exclusion of the others. No act of the Lender shall
be construed as an election to proceed under any one provision herein to the
exclusion of any other provision.
27. If the Borrower consists of more than one person, the obligations
and liabilities of each such person hereunder shall be joint and several.
28. The terms of the Note and this Agreement shall be construed by the
laws of the State of New York, without reference to principals of conflicts of
law.
29. Intentionally Omitted Prior to Execution.
30. If any term, covenant or condition of the Note or this Agreement is
held to be invalid, illegal or unenforceable in any respect, the Note and this
Agreement shall be construed without such provision.
31. This Agreement may be executed in any number of duplicate originals
and each such duplicate original shall be deemed to constitute but one and the
same instrument.
32. Unless the context clearly indicates a contrary intent or unless
otherwise specifically provided herein, words used in this Agreement shall be
used interchangeably in singular or plural form. The word "Lender" shall mean
"the Lender or any subsequent holder of the Note". The word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association, government, governmental authority or other
entity. The word "Collateral" shall include any portion of the Collateral or
interest therein. The words "Mortgaged Property" shall include any portion of
the Mortgaged Property or interest therein. Whenever the context may require,
any pronouns used herein shall include the corresponding masculine, feminine or
neuter forms and the singular form of nouns and pronouns shall include the
plural and vice versa. All references in this Agreement to the Collateral
Assignments shall be deemed to refer to such Collateral Assignments as are now
or shall be from time to time in the possession of the Lender. All references in
this Agreement to Pledged Notes, the Pledged Mortgages and the Other Documents
shall be deemed to refer to such Pledged Notes, Pledged Mortgages and Other
Documents as are now or shall be from time to time in the possession of the
Lender. All references in this Agreement to Pledged Loans shall be deemed to
refer to such Pledged Loans evidenced and secured by those Pledged Notes,
Pledged Mortgages and Other Documents as are now or shall be from time to time
in the possession of the Lender.
33. This Agreement cannot be changed orally but only in writing by
Lender and Borrower.
34. The Borrower hereby agrees that upon its failure to pay all sums
due and owing with respect to the Facility on the maturity date the Borrower
will pay to the Lender interest on the then unpaid principal at the Default Rate
from the maturity date and until the actual receipt and collection of all sums
due and owing with respect to the Facility by the Lender. This paragraph,
however, shall not be construed as an agreement or privilege to extend this
Agreement, nor as a waiver of any other right or remedy accruing to the Lender
by reason of any such default.
35. THE BORROWER HEREBY WAIVES THE RIGHT TO ASSERT A COUNTERCLAIM OTHER
THAN A COMPULSORY COUNTERCLAIM IN ANY ACTION OR PROCEEDING BROUGHT AGAINST IT BY
THE LENDER AND WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY
EITHER PARTY HERETO AGAINST THE OTHER OR IN ANY COUNTERCLAIM ASSERTED BY THE
LENDER AGAINST THE BORROWER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE NOTE, THIS AGREEMENT OR THE FACILITY.
36. This Agreement is subject to the express condition that at no time
shall the Borrower be obligated or required to pay interest on the principal
balance due hereunder at a rate which could subject the Lender to either civil
or criminal liability as a result of being in excess of the maximum interest
rate which the Borrower is permitted by law to contract or agree to pay. If by
the terms of this Agreement or the Note the Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of such maximum rate, the rate of interest under this Agreement and/or
the Note shall be deemed to be immediately reduced to such maximum rate and all
previous payments in excess of the maximum rate shall be deemed to have been
payments toward the reduction of principal and not to the interest due
hereunder.
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Borrower and the Lender as of the date first above written.
BRT REALTY TRUST
By: /s/ Mark H. Lundy
----------------------------------
Mark H. Lundy, Senior Vice President
NORTH FORK BANK
By: Walter E. Malek
--------------------------------
Walter E. Malek, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ___ day of January, 2006, before me, the undersigned, personally
appeared Mark H. Lundy, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
------------------------------
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ___ day of January, 2006, before me, the undersigned, personally
appeared Walter E. Malek, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
------------------------------
Notary Public
EXHIBIT A
SCHEDULE OF COLLATERAL
----------------------
Address Original Current
------- -------- -------
Principal Principal
--------- ---------
Balance Balance
------- -------
EXHIBIT B
FORM OF COLLATERAL ASSIGNMENT
-----------------------------
COLLATERAL ASSIGNMENT OF MORTGAGE
---------------------------------
KNOW THAT, BRT REALTY TRUST, a Massachusetts business trust, with
offices at 60 Cutter Mill Road, Suite 303, Great Neck, New York 10021
("Assignor"), in consideration of Ten ($10.00) Dollars paid by NORTH FORK BANK,
a corporation organized under the Banking Law of the State of New York having
its principal offices at 275 Broadhollow Road, Melville, New York 11747 (the
"Assignee"), hereby assigns unto the Assignee all of its right, title and
interest in and to the mortgage set forth on Schedule B annexed hereto and made
a part hereof, the mortgage secured thereby, and all other documents executed in
connection therewith
Covering premises known as and more particularly
----------------------------
described by Schedule A annexed hereto
TOGETHER with the bonds or notes or obligations described in said mortgages and
the moneys due and to grow due thereon with the interest; TO HAVE AND TO HOLD
the same unto the Assignee and its successors and assigns forever.
This assignment is made without recourse to the Assignor in any event.
This assignment is not subject to section 275 of the Real Property Law because
it is an assignment within the secondary mortgage market.
This is a collateral assignment, intended to secure repayment of that certain
Promissory Note made by Assignor in favor of Assignee of even date herewith in
the principal amount of ONE HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00)
DOLLARS, and is given pursuant to the provisions of that certain Revolving
Credit Agreement dated January ___, 2006 between Assignor and Assignee.
IN WITNESS WHEREOF, the Assignor has duly executed this Assignment this ____
day of ____, 200_.
BRT REALTY TRUST
By:
------------------------------
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On the _____ day of ____, 200_, before me, the undersigned, personally
appeared ____________________, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
------------------------------
Notary Public
SCHEDULE A
SCHEDULE B
------------------
TO
NORTH FORK BANK
===============================================================
COLLATERAL ASSIGNMENT OF MORTGAGE
===============================================================
Premises:
The within premises lie in
Block , Lot
in ________ County
Record and Return to:
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
REVOLVING CREDIT AGREEMENT
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
EXHIBIT 10.2
NORTH FORK BANK
---------------
SECURED PROMISSORY NOTE
BORROWER: BRT REALTY TRUST
PRINCIPAL: $150,000,000.00 Date: As of January 9, 2006
PROMISE TO PAY: The undersigned Borrower, jointly and severally if more than one
--------------
signer, does hereby promise to pay to the order of NORTH FORK BANK (the "Bank")
at its offices at 275 Broadhollow Road, Melville, New York 11747, or at any of
its branches, the sum of ONE HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00)
DOLLARS or the aggregate unpaid principal amount of all advances made to the
Borrower by the Bank, whichever is less, plus interest thereon, from the date
hereof in the manner set forth below.
RATE AND PAYMENT: Each advance made under this Secured Promissory Note (this
----------------
"Note") shall bear interest at the Adjusted LIBOR Rate (as hereinafter defined)
plus two hundred twenty five (225) basis points (the "Interest Rate"). Interest
shall be payable monthly beginning on February 1, 2006 and on the 1st day of
each month (the "Debit Date") thereafter until February 1, 2008, when all unpaid
principal and interest shall be due in full, unless the term hereof is extended
as hereinafter provided. Interest will be calculated on the basis of a 360-day
year, and collected on the basis of the actual number of days elapsed.
For purposes of this Paragraph:
LIBOR Rate shall mean the rate at which Eurodollar deposits in
the London Interbank Market for thirty (30) days are quoted on the Telerate
screen, which rate will be reset on a monthly basis on the monthly anniversary
date of this Note.
Adjusted LIBOR Rate shall mean the LIBOR Rate, as adjusted for
statutory reserve requirements for eurocurrrency liabilities.
Until the entire unpaid principal balance hereunder, plus all accrued interest
thereon and all other sums due in connection therewith (collectively, the
"Debt"), has been repaid in full, with no further advances permitted,, the
Borrower agrees to maintain its account (account #6224002938, hereinafter the
"Account") with the Bank. Borrower hereby unconditionally and irrevocably
authorizes the Bank to automatically debit from such Account any and all
payments due hereunder and unconditionally warrant and represent to Bank that
Borrower shall, until the Debt has been repaid in full, maintain sufficient
funds in such Account to pay same. If no funds are available in such Account,
the Borrower hereby authorizes Bank to debit any such payment due from any other
account or accounts [other than tenant security deposit accounts and escrow
accounts in connection with the Collateral (as defined in the Agreement)]
maintained by Borrower with the Bank, provided, however, Bank's authorization to
debit such accounts is limited to the amounts due under this Note and/or the
other documents executed in connection herewith. Notwithstanding the foregoing,
if at any time there are insufficient funds in the Account to pay any amounts
due hereunder, the Borrower shall remain fully liable to pay same when due.
Payments shall be applied first to interest on unpaid principal balances to the
date payment is received by the Bank and then to reduction of principal.
GRID NOTE: This Note is the promissory note referenced in that certain Revolving
---------
Credit Agreement between the Borrower and the Bank dated of even date herewith
(the "Agreement") and shall be governed by the terms thereof. The Borrower may
borrow and repay (in whole or in part) on a revolving basis aggregate amounts up
to ONE HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00) DOLLARS, subject to
the provisions of this Note and the Agreement. The date and amount of each
advance made and each payment of principal and interest received by the Bank
hereunder shall be recorded and entered on the books and records of the Bank,
which shall, in absence of manifest error, be presumptive evidence as to the
outstanding principal amount due hereunder; provided, however, that the failure
to record any advance or repayment shall not limit or otherwise affect the
obligation of Borrower under this Note and the Agreement.
PREPAYMENT: Prepayment in whole or in part may be made at any time without
----------
penalty. Prepayment must be made in the event and to the extent that the
outstanding amount hereunder exceeds the Borrowing Base (as hereinafter
defined). During the Term hereof, any funds so prepaid may be re-advanced
pursuant to the terms hereof.
DEFAULT INTEREST RATE: The unpaid principal sum under this Note shall bear
---------------------
interest at a rate equal to twenty four (24%) percent on and after the
occurrence of any event of default hereunder or under the Agreement, beyond
applicable notice, grace and cure periods, if any and upon the Bank exercising
its option to declare all sums due hereunder immediately due and payable by
reason thereof, and until the entire principal sum hereof has been fully paid,
both before and after the entry of any judgment with respect to such event, but
in no event shall the rate either before or after the occurrence of an event of
default exceed the highest rate of interest, if any, permitted under applicable
New York or Federal Law.
SECURITY: This Note is secured by the Collateral (as defined in the Agreement).
--------
RIGHT OF OFFSET: If any payment is not made on time, or if the entire balance
---------------
becomes due and payable and is not paid, all or part of the amount due may be
offset out of any account or other property which the Borrower has at the Bank
or any affiliate of the Bank, or with any Participant (as hereinafter defined)
or any affiliate thereof, without prior notice or demand. This provision is in
addition to any not in limitation of any of the Bank's rights by statute or at
common law.
LATE CHARGES: Borrower will pay a charge of four (4%) percent of any amount
------------
which cannot be debited from its account due to insufficient balances on the
Debit Date, as liquidated damages for failure to make timely payment and such
late charge shall be secured by the Collateral.
DEFAULT: The Bank may decline to make advances and/or may declare the entire
-------
unpaid balance of this Note due and payable on the happening of any default
hereunder or under the Agreement or any of the other documents executed in
connection therewith.
ADVANCES: All advance requests must be in writing and must be made no less than
--------
three (3) business days in advance of the date that the funds are to be
disbursed. No advance will be made if such advance will cause the amount then
outstanding under this Note to exceed the Borrowing Base. The Bank shall make
any requested advance to the Borrower on the third (3rd) business day after such
request is received, notwithstanding that the Bank may not have received the
funds required to be transferred to the Bank by Valley National Bank, Signature
Bank or Manufacturers and Traders Trust Company (collectively, the
"Participants") in accordance with the provisions of that certain Participation
Agreement of even date herewith between the Bank and the Participants.
Notwithstanding the foregoing, however, in no event shall the Bank be required
to advance in excess of Eighty Million and 00/100 ($80,000,000.00) Dollars of
its own funds hereunder, and to the extent that any advance by the Bank on
behalf of any Participant would cause the Bank to have advanced more than Eighty
Million and 00/100 ($80,000,000.00) Dollars, the Bank shall not be required to
make such advance until it shall have received the necessary funds from the
Participants.
OPTION TO EXTEND. A. Provided that: (i) the Borrower is not in default under the
----------------
terms of this Note or the Agreement as of November 1, 2007 up to and including
February 1, 2008; (ii) the Borrower has furnished all of the information and
documentation the Borrower is required to furnish to the Bank pursuant to this
Note, the Agreement, and/or any other document executed in connection herewith
(including, without limitation, copies of all required SEC filings, monthly and
quarterly loan and delinquency reports, and other information as required in
paragraph 14 of the Agreement; and (iii) the Borrower has not been late in
making the monthly payments due hereunder more than three (3) times in any
twelve (12) month period, the Borrower shall have the option to extend the term
of this Note for an additional one (1) year (the "First Extended Term") on the
same terms and conditions as set forth herein. In order to exercise its option
the Borrower must give written notice to the Bank on or before December 1, 2007
but not prior to November 1, 2007 (with time being of the essence) and must
simultaneously therewith submit to the Bank an extension fee in the sum of Three
Hundred Seventy Five Thousand and 00/100 ($375,000.00) Dollars (the "First
Extension Fee").
B. In the event that Borrower has extended the maturity date hereunder for the
First Extended Term, as provided in paragraph A hereof, and provided that: (i)
the Borrower is not in default under the terms of this Note or the Agreement as
of November 1, 2008 up to and including February 1, 2009; (ii) the Borrower has
furnished all of the information and documentation the Borrower is required to
furnish to the Bank pursuant to this Note, the Agreement, and/or any other
document executed in connection herewith and (iii) the Borrower has not been
late in making the monthly payments due hereunder more than three (3) times in
any twelve (12) month period, the Borrower shall have the option to extend the
term of this Note for an additional one (1) year (the "Second Extended Term") on
the same terms and conditions as set forth herein. In order to exercise its
option the Borrower must give written notice to the Bank on or before December
1, 2008 but not prior to November 1, 2008 (with time being of the essence) and
must simultaneously therewith submit to the Bank an extension fee in the sum of
Three Hundred Seventy Five Thousand and 00/100 ($375,000.00) Dollars (the
"Second Extension Fee" and, together with the First Extension Fee, the
"Extension Fee").
NO ORAL MODIFICATIONS. This Note may not be changed or terminated orally.
---------------------
ADMINISTRATIVE FEE. The Bank shall be entitled to an administrative fee of Two
------------------
Thousand and 00/100 ($2,000.00) per month in connection with this Note, which
shall be automatically debited from the Account on the first (1st) day of each
month.
BORROWING BASE: For purposes of this Note and the Agreement, the term "Borrowing
--------------
Base" shall mean the sum of (i) sixty-five (65%) percent of the principal amount
of the First Mortgage Collateral (as defined in the Agreement) calculated
exclusive of Defaulted Pledged Loans as defined in the Agreement; (ii) fifty
(50%) percent of the principal amount of the Subordinate Collateral (as defined
in the Agreement), calculated exclusive of Defaulted Pledged Loans (as defined
in the Agreement) and (iii) fifty (50%) percent of the fair market value (as
determined by the Bank in its sole and absolute discretion, which may, in the
Bank's sole and absolute discretion, be based upon an appraisal obtained by the
Bank at the Borrower's sole cost and expense) of real property obtained by the
Borrower as a result of the foreclosure of a Defaulted Loan, provided that the
Borrower shall pledge its ownership interests in the fee owner of such real
property as additional Collateral as provided in the Agreement. Notwithstanding
anything contained in this paragraph to the contrary, the sum of items (ii) and
(iii) of the foregoing sentence shall not at any time exceed the lesser of (x)
$22,500,000.00 or (y) fifteen (15%) percent of the Borrowing Base then existing.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the 9th day of
January, 2006.
BRT Realty Trust
By: Mark H. Lundy
------------------------
Mark H. Lundy, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the _____ day of January, 2006, before me, the undersigned,
personally appeared Mark H. Lundy, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
------------------------------
Notary Public
SECURED PROMISSORY NOTE
-----------------------
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001