UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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 April 30, 2008
or
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
|
For
the transition period from __________________ to
____________________
|
|
Commission
File No.
000-25043
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
(Exact
name of registrant as specified in its charter)
|
New
Jersey
|
22-1697095
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
|
|
505
Main Street, Hackensack, New Jersey
|
07601
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
(Registrant's
telephone number, including area
code)
|
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be
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
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer
|
Accelerated
Filer
x
|
Non-Accelerated
Filer
|
Smaller
Reporting Company
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
No
x
As of
June 6, 2008, the number of shares of beneficial interest outstanding was
6,851,152
FIRST REAL ESTATE INVESTMENT
TRUST OF NEW JERSEY
Part
I: Financial Information
|
|
|
Page
|
|
|
|
|
|
Item
1:
|
Unaudited
Condensed Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
Item
2:
|
|
9
|
|
|
|
|
|
Item
3:
|
|
18
|
|
|
|
|
|
Item
4:
|
|
18
|
|
|
|
|
|
|
|
|
Part
II: Other Information
|
|
|
|
|
|
|
Item
1A:
|
|
19
|
|
|
|
|
|
Item
4:
|
|
21
|
|
|
|
|
|
Item
6:
|
|
22
|
|
|
|
|
|
Item
10:
|
|
22
|
|
|
|
|
|
|
23
|
Part
I: Financial Information
Item
1: Unaudited Condensed Consolidated Financial Statements
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
April 30,
|
|
|
October 31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In
Thousands of Dollars)
|
|
ASSETS
|
|
|
|
|
|
|
Real
estate, at cost, net of accumulated depreciation
|
|
$
|
208,683
|
|
|
$
|
204,732
|
|
Construction
in progress
|
|
|
6,263
|
|
|
|
7,331
|
|
Cash
and cash equivalents
|
|
|
11,611
|
|
|
|
12,740
|
|
Tenants'
security accounts
|
|
|
2,410
|
|
|
|
2,369
|
|
Sundry
receivables
|
|
|
4,081
|
|
|
|
4,833
|
|
Secured
loans receivable
|
|
|
3,326
|
|
|
|
3,326
|
|
Prepaid
expenses and other assets
|
|
|
2,487
|
|
|
|
2,852
|
|
Acquired
over market leases and in-place lease costs
|
|
|
985
|
|
|
|
1,104
|
|
Deferred
charges, net
|
|
|
3,579
|
|
|
|
3,454
|
|
Interest
rate swap contract
|
|
|
-
|
|
|
|
14
|
|
Totals
|
|
$
|
243,425
|
|
|
$
|
242,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgages
payable
|
|
$
|
192,613
|
|
|
$
|
189,389
|
|
Accounts
payable and accrued expenses
|
|
|
5,108
|
|
|
|
5,193
|
|
Dividends
payable
|
|
|
2,046
|
|
|
|
2,704
|
|
Tenants'
security deposits
|
|
|
3,133
|
|
|
|
3,124
|
|
Acquired
below market value leases and deferred revenue
|
|
|
3,272
|
|
|
|
3,911
|
|
Total
liabilities
|
|
|
206,172
|
|
|
|
204,321
|
|
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
13,123
|
|
|
|
13,304
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Shares
of beneficial interest without par value:
|
|
|
|
|
|
|
|
|
8,000,000
shares authorized; 6,821,152 and 6,760,652 shares issued and
outstanding
|
|
|
23,679
|
|
|
|
23,225
|
|
Undistributed
earnings
|
|
|
451
|
|
|
|
1,891
|
|
Accumulated
other comprehensive income
|
|
|
-
|
|
|
|
14
|
|
Total
shareholders' equity
|
|
|
24,130
|
|
|
|
25,130
|
|
Totals
|
|
$
|
243,425
|
|
|
$
|
242,755
|
|
See Notes
to Condensed Consolidated Financial Statements.
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS
OF INCOME, COMPREHENSIVE INCOME
AND
UNDISTRIBUTED EARNINGS
SIX AND
THREE MONTHS ENDED APRIL 30, 2008 AND 2007
(Unaudited)
|
|
Six
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
April 30,
|
|
|
April 30,
|
|
|
|
2008
|
|
|
|
2007
|
*
|
|
2008
|
|
|
|
2007
|
*
|
|
|
(In
Thousands of Dollars, Except Per Share Amounts)
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
18,064
|
|
|
$
|
17,501
|
|
|
$
|
9,084
|
|
|
$
|
8,781
|
|
Reimbursements
|
|
|
2,456
|
|
|
|
2,373
|
|
|
|
1,071
|
|
|
|
1,089
|
|
Sundry
income
|
|
|
186
|
|
|
|
181
|
|
|
|
94
|
|
|
|
78
|
|
Totals
|
|
|
20,706
|
|
|
|
20,055
|
|
|
|
10,249
|
|
|
|
9,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
5,685
|
|
|
|
5,512
|
|
|
|
2,760
|
|
|
|
2,617
|
|
Management
fees
|
|
|
916
|
|
|
|
870
|
|
|
|
460
|
|
|
|
435
|
|
Real
estate taxes
|
|
|
2,891
|
|
|
|
2,852
|
|
|
|
1,445
|
|
|
|
1,426
|
|
Depreciation
|
|
|
2,674
|
|
|
|
2,649
|
|
|
|
1,336
|
|
|
|
1,346
|
|
Totals
|
|
|
12,166
|
|
|
|
11,883
|
|
|
|
6,001
|
|
|
|
5,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
8,540
|
|
|
|
8,172
|
|
|
|
4,248
|
|
|
|
4,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
income
|
|
|
313
|
|
|
|
225
|
|
|
|
154
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense including amortization of deferred financing costs
|
|
|
(5,818
|
)
|
|
|
(6,088
|
)
|
|
|
(2,885
|
)
|
|
|
(3,045
|
)
|
Minority
interest
|
|
|
(395
|
)
|
|
|
(258
|
)
|
|
|
(280
|
)
|
|
|
(120
|
)
|
Distribution
to certain minority interests
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
-
|
|
|
|
-
|
|
Income
from continuing operations
|
|
|
2,640
|
|
|
|
1,901
|
|
|
|
1,237
|
|
|
|
1,097
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
from discontinued operations
|
|
|
-
|
|
|
|
76
|
|
|
|
-
|
|
|
|
34
|
|
Income
from discontinued operations
|
|
|
-
|
|
|
|
76
|
|
|
|
-
|
|
|
|
34
|
|
Net
income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.39
|
|
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
Discontinued
operations
|
|
$
|
-
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
Net
income
|
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.18
|
|
|
$
|
0.17
|
|
Diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.38
|
|
|
$
|
0.28
|
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
Discontinued
operations
|
|
$
|
-
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
0.01
|
|
Net
income
|
|
$
|
0.38
|
|
|
$
|
0.29
|
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
6,781
|
|
|
|
6,751
|
|
|
|
6,799
|
|
|
|
6,751
|
|
Diluted
|
|
|
6,894
|
|
|
|
6,916
|
|
|
|
6,911
|
|
|
|
6,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
Other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
(loss) on interest rate swap contract
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
-
|
|
|
|
(22
|
)
|
Comprehensive
income
|
|
$
|
2,640
|
|
|
$
|
1,948
|
|
|
$
|
1,237
|
|
|
$
|
1,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNDISTRIBUTED
EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
beginning of period
|
|
$
|
1,891
|
|
|
$
|
1,735
|
|
|
$
|
1,260
|
|
|
$
|
556
|
|
Net
income
|
|
|
2,640
|
|
|
|
1,977
|
|
|
|
1,237
|
|
|
|
1,131
|
|
Less
dividends declared
|
|
|
(4,080
|
)
|
|
|
(4,052
|
)
|
|
|
(2,046
|
)
|
|
|
(2,027
|
)
|
Balance,
end of period
|
|
$
|
451
|
|
|
$
|
(340
|
)
|
|
$
|
451
|
|
|
$
|
(340
|
)
|
Dividends
declared per share
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
* Restated
to reflect reclassification of discontinued operations.
See Notes
to Condensed Consolidated Financial Statements.
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF
CASH
FLOWS
SIX
MONTHS ENDED APRIL 30, 2008 AND 2007
(Unaudited)
|
|
Six
Months Ended
|
|
|
|
April
30,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
(In
Thousands of Dollars)
|
|
Operating
activities:
|
|
|
|
|
|
|
Net
income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
Adjustments
to reconcile net income to net cash provided by operating activities
(including discontinued operations):
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
2,674
|
|
|
|
2,655
|
|
Amortization
|
|
|
381
|
|
|
|
360
|
|
Net
amortization of acquired leases
|
|
|
(48
|
)
|
|
|
(151
|
)
|
Deferred
revenue
|
|
|
(520
|
)
|
|
|
(298
|
)
|
Minority
interest
|
|
|
395
|
|
|
|
408
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Tenants'
security accounts
|
|
|
(41
|
)
|
|
|
(51
|
)
|
Sundry
receivables, prepaid expenses and other assets
|
|
|
931
|
|
|
|
1,438
|
|
Accounts
payable, accrued expenses and other liabilities
|
|
|
1,051
|
|
|
|
(448
|
)
|
Tenants'
security deposits
|
|
|
9
|
|
|
|
91
|
|
Net
cash provided by operating activities
|
|
|
7,472
|
|
|
|
5,981
|
|
Investing
activities:
|
|
|
|
|
|
|
|
|
Capital
improvements - existing properties
|
|
|
(2,058
|
)
|
|
|
(1,464
|
)
|
Construction
and pre development costs
|
|
|
(4,605
|
)
|
|
|
(3,718
|
)
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
(6,663
|
)
|
|
|
(5,182
|
)
|
Financing
activities:
|
|
|
|
|
|
|
|
|
Repayment
of mortgages
|
|
|
(6,995
|
)
|
|
|
(18,494
|
)
|
Proceeds
from mortgages
|
|
|
6,000
|
|
|
|
28,331
|
|
Proceeds
from construction loan
|
|
|
4,219
|
|
|
|
-
|
|
Deferred financing
costs
|
|
|
(283
|
)
|
|
|
(524
|
)
|
Proceeds
from exercise of stock options
|
|
|
454
|
|
|
|
37
|
|
Dividends
paid
|
|
|
(4,738
|
)
|
|
|
(5,400
|
)
|
Distribution
to minority interest
|
|
|
(595
|
)
|
|
|
(387
|
)
|
Net
cash (used in) provided by financing activities
|
|
|
(1,938
|
)
|
|
|
3,563
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
(1,129
|
)
|
|
|
4,362
|
|
Cash
and cash equivalents, beginning of period
|
|
|
12,740
|
|
|
|
9,616
|
|
Cash
and cash equivalents, end of period
|
|
$
|
11,611
|
|
|
$
|
13,978
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow data:
|
|
|
|
|
|
|
|
|
Interest
paid, including capitalized construction period interest of $157 in fiscal
2008.
|
|
$
|
5,720
|
|
|
$
|
5,956
|
|
Income
taxes paid
|
|
$
|
10
|
|
|
$
|
18
|
|
Supplemental
schedule of non cash financing activities:
|
|
|
|
|
|
|
|
|
Accrued
capital expenditures, construction costs and pre-development
costs
|
|
$
|
774
|
|
|
$
|
34
|
|
Dividends
declared but not paid
|
|
$
|
2,046
|
|
|
$
|
2,027
|
|
See Notes
to Condensed Consolidated Financial Statements.
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 -
Basis of presentation:
The
accompanying condensed consolidated financial statements have been prepared
without audit, in accordance with accounting principles generally accepted in
the United States of America (“GAAP”) for interim financial statements and
pursuant to the rules of the Securities and Exchange Commission (“SEC”).
Accordingly, certain information and footnotes required by GAAP for complete
financial statements have been omitted. It is the opinion of management that all
adjustments considered necessary for a fair presentation have been included, and
that all such adjustments are of a normal recurring nature.
The
consolidated results of operations for the six and three months ended April 30,
2008 are not necessarily indicative of the results to be expected for the full
year. The unaudited condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements and related notes
included in the Annual Report on Form 10-K for the year ended October 31, 2007
of First Real Estate Investment Trust of New Jersey (“FREIT”).
Reclassification:
Certain
accounts in the 2007 financial statements have been reclassified to conform to
the current presentation. (See Note 4 for a more detailed
discussion.)
Note 2 -
Earnings per share:
Basic
earnings per share is calculated by dividing net income by the weighted average
number of shares outstanding during each period (denominator). The calculation
of diluted earnings per share is similar to that of basic earnings per share,
except that the denominator is increased to include the number of additional
shares that would have been outstanding if all potentially dilutive shares, such
as those issuable upon the exercise of stock options and warrants, were issued
during the period.
In
computing diluted earnings per share for the six and three months ended April
30, 2008 and 2007, the assumed exercise of all of FREIT’s outstanding stock
options, adjusted for application of the treasury stock method, would have
increased the weighted average number of shares outstanding as shown in the
table below.
|
|
Six
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
April 30,
|
|
|
April 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
Basic
weighted average shares outstanding
|
|
|
6,780,740
|
|
|
|
6,750,873
|
|
|
|
6,799,219
|
|
|
|
6,751,101
|
|
Shares
arising from assumed exercise of stock options
|
|
|
113,470
|
|
|
|
165,091
|
|
|
|
111,944
|
|
|
|
164,016
|
|
Dilutive
weighted average shares outstanding
|
|
|
6,894,210
|
|
|
|
6,915,964
|
|
|
|
6,911,163
|
|
|
|
6,915,117
|
|
Basic and
diluted earnings per share, based on the weighted average number of shares
outstanding during each period, are comprised of ordinary income for the six and
three months ended April 30, 2008 and the prior year’s comparable
periods.
Note 3 -
Equity incentive plan:
On
September 10, 1998, the Board of Trustees approved FREIT’s Equity Incentive Plan
(the "Plan") which was ratified by FREIT's shareholders on April 7, 1999,
whereby up to 920,000 of FREIT's shares of beneficial interest were available
for issuance to key personnel in the form of stock options, restricted share
awards and other share-based awards.
Upon
ratification of the Plan on April 7, 1999, FREIT issued 754,000 stock options
(adjusted for stock splits), which it had previously granted to key personnel on
September 10, 1998. The fair value of the options on the date of grant was $7.50
per share. As of April 30, 2008, options for 172,000 shares were outstanding.
The total intrinsic value of the options outstanding at April 30, 2008 was
approximately $2.5 million.
On April
4, 2007, FREIT shareholders approved amendments to FREIT’s Equity Incentive Plan
as follows: (a) reserving an additional 300,000 shares for issuance under the
Plan; and (b) extending the term of the Plan until September 10,
2018.
Note 4 -
Discontinued operations:
On June
26, 2007, FREIT closed on its contract for the sale of the Lakewood Apartments
in Lakewood, New Jersey. The sales price for the property was $4 million. For
financial reporting purposes, FREIT recognized a gain of approximately $3.7
million from the sale. In compliance with current accounting guidance (SFAS No.
144 – “Accounting for the Impairment or Disposal of Long-Lived Assets”), the
prior year’s earnings of the Lakewood operation have been reclassified to
“Income from discontinued operations”. Revenue attributable to discontinued
operations was $207,000 and $100,000 for the prior year’s six and three month
periods ended April 30, 2007.
Note 5 -
Segment information:
FREIT has
determined that it has two reportable segments: commercial properties and
residential properties. These reportable segments offer different types of
space, have different types of tenants, and are managed separately because each
requires different operating strategies and management expertise. The commercial
segment contains ten (10) separate properties and the residential segment
contains nine (9) properties. The accounting policies of the segments are the
same as those described in Note 1 in FREIT’s Annual Report on Form 10-K for the
year ended October 31, 2007.
The chief
operating and decision-making group of FREIT's commercial segment, residential
segment and corporate/other is comprised of FREIT’s Board of
Trustees.
FREIT
assesses and measures segment operating results based on net operating income
("NOI"). NOI, a standard used by real estate professionals, is based on
operating revenue and expenses directly associated with the operations of the
real estate properties, but excludes deferred rents (straight lining), lease
amortization, depreciation, and financing costs. NOI is not a measure of
operating results or cash flows from operating activities as measured by GAAP,
and is not necessarily indicative of cash available to fund cash needs and
should not be considered an alternative to cash flows as a measure of
liquidity.
Real
estate rental revenue, operating expenses, NOI and recurring capital
improvements for the reportable segments are summarized below and reconciled to
consolidated net income for the six and three months ended April 30, 2008 and
2007. Asset information is not reported since FREIT does not use this measure to
assess performance.
|
|
Six
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
April 30,
|
|
|
April 30,
|
|
|
|
2008
|
|
|
|
2007
|
*
|
|
2008
|
|
|
|
2007
|
*
|
|
|
(In
Thousands of Dollars)
|
|
Real
estate rental revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
$
|
11,039
|
|
|
$
|
10,735
|
|
|
$
|
5,415
|
|
|
$
|
5,272
|
|
Residential
|
|
|
9,527
|
|
|
|
9,055
|
|
|
|
4,765
|
|
|
|
4,542
|
|
Totals
|
|
|
20,566
|
|
|
|
19,790
|
|
|
|
10,180
|
|
|
|
9,814
|
|
Real
estate operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
4,412
|
|
|
|
4,303
|
|
|
|
2,121
|
|
|
|
2,138
|
|
Residential
|
|
|
4,270
|
|
|
|
4,128
|
|
|
|
2,124
|
|
|
|
1,927
|
|
Totals
|
|
|
8,682
|
|
|
|
8,431
|
|
|
|
4,245
|
|
|
|
4,065
|
|
Net
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
|
|
|
6,627
|
|
|
|
6,432
|
|
|
|
3,294
|
|
|
|
3,134
|
|
Residential
|
|
|
5,257
|
|
|
|
4,927
|
|
|
|
2,641
|
|
|
|
2,615
|
|
Totals
|
|
$
|
11,884
|
|
|
$
|
11,359
|
|
|
$
|
5,935
|
|
|
$
|
5,749
|
|
Recurring
capital improvements-residential
|
|
$
|
258
|
|
|
$
|
239
|
|
|
$
|
118
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
NOI
|
|
$
|
11,884
|
|
|
$
|
11,359
|
|
|
$
|
5,935
|
|
|
$
|
5,749
|
|
Deferred
rents - straight lining
|
|
|
92
|
|
|
|
114
|
|
|
|
45
|
|
|
|
59
|
|
Amortization
of acquired leases
|
|
|
48
|
|
|
|
151
|
|
|
|
24
|
|
|
|
75
|
|
Net
investment income
|
|
|
313
|
|
|
|
225
|
|
|
|
154
|
|
|
|
138
|
|
Minority
interest in earnings of subsidiaries
|
|
|
(395
|
)
|
|
|
(258
|
)
|
|
|
(280
|
)
|
|
|
(120
|
)
|
Distribution
to certain minority interests
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
-
|
|
|
|
-
|
|
General
and administrative expenses
|
|
|
(810
|
)
|
|
|
(803
|
)
|
|
|
(420
|
)
|
|
|
(413
|
)
|
Depreciation
|
|
|
(2,674
|
)
|
|
|
(2,649
|
)
|
|
|
(1,336
|
)
|
|
|
(1,346
|
)
|
Financing
costs
|
|
|
(5,818
|
)
|
|
|
(6,088
|
)
|
|
|
(2,885
|
)
|
|
|
(3,045
|
)
|
Income
from continuing operations
|
|
|
2,640
|
|
|
|
1,901
|
|
|
|
1,237
|
|
|
|
1,097
|
|
Income
from discontinued operations
|
|
|
-
|
|
|
|
76
|
|
|
|
-
|
|
|
|
34
|
|
Net
income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
* Restated
to reflect reclassification of discontinued operations.
Note 6 -
Mortgages & notes payable:
On February 12, 2008, Damascus Centre,
LLC (“Damascus Centre”) closed on a $27.3 million construction loan that is
available to fund already expended and future construction costs. This loan has
a term of forty-eight (48) months, with one twelve (12) month extension option.
FREIT has guaranteed 30% of the loan, and the minority interests, who have a 30%
investment in the Damascus Centre, have agreed to indemnify FREIT for their
share of the guarantee. Draws against this loan bear interest at a floating rate
equal to LIBOR +1.35%. As of April 30, 2008, Damascus drew down $4.2 million
from this loan to cover construction costs.
FREIT had
a variable interest rate mortgage secured by its Patchogue, NY property. To
limit interest rate volatility on this loan, FREIT entered into an interest rate
swap contract. This loan came due on January 2, 2008. The due date of the loan
was extended to February 29, 2008. The interest rate swap contract terminated on
January 2, 2008. On February 29, 2008, the unpaid principal amount of this loan
of approximately $5.9 million was refinanced with a $6 million mortgage loan
bearing a fixed interest rate of 6.125%, with a ten (10) year term, and payable
according to a thirty (30) year amortization schedule. Under the terms of the
mortgage loan agreement, FREIT can request, during the term of the loan,
additional fundings that will bring the outstanding principal balance up to 75%
of loan-to-value (percentage of mortgage loan to total appraised value of
property securing the loan).
Note 7 –
Commitments & contingencies:
A
modernization and expansion is underway at our Damascus Center in Damascus, MD
(owned by our 70% owned affiliate, Damascus Centre). FREIT has issued a bond of
approximately $1 million to guaranty completion of off-site improvements. Total
construction costs will be approximately $21.9 million. Construction on Phase I
began in June 2007 with completion expected no later than June 2008. Phase I
construction costs will approximate $4 - $4.5 million of which $4.2 million has
already been expended. Construction financing for approximately $27.3 million
has been committed that will be available to fund future and already expended
construction costs, and will be drawn upon as needed. As of April 30, 2008,
Damascus drew down $4.2 million from this loan to cover construction
costs.
Note 8–
Share repurchase program:
On April
9, 2008, FREIT’s Board of Trustees authorized up to $2 million for the
repurchase of FREIT shares commencing three (3) days after the announcement of
its operating results for the quarter ended April 30, 2008. Share repurchases
under this program may be made from time to time in the open market or through
privately negotiated transactions, depending on trading prices of FREIT shares
and other market conditions. This share repurchase program may be limited or
terminated at any time and without prior notice.
Note 9–
Subsequent events:
FREIT
owns a 60% membership interest in and is the managing member of Grande Rotunda,
LLC (“Grande Rotunda”). Rotunda 100, LLC, a New Jersey limited liability
company, owns a 40% interest in Grande Rotunda. Employees of Hekemian & Co.,
Inc. (“Hekemian & Co.”), the managing agent of FREIT, including members of
the immediate family of Robert S. Hekemian, Chairman and Chief Executive Officer
of FREIT, own Rotunda 100, LLC, and the members of Mr. Hekemian’s family have
majority management control of this entity. Grande Rotunda is the owner of a
mixed-use (office/retail) property in Baltimore, MD.
As an
incentive to the employees of Hekemian & Co. to identify and provide real
estate investment opportunities to FREIT, FREIT has agreed to advance the
Hekemian & Co. employees, who are members of Rotunda 100, LLC, 50% of the
amount which such employees are required to contribute toward the acquisition
and operation of the Grande Rotunda, up to $2 million. The Hekemian & Co.
employees have pledged their interests in Rotunda 100, LLC to FREIT as
collateral security for these loans. FREIT collects a market level interest rate
on the outstanding principal balance of such loans, and the loans are full
recourse loans to the borrowers.
On May 8,
2008, FREIT’s Board of Trustees approved amendments to the existing loan
agreements with the Hekemian & Co. employees to increase the aggregate
amount that FREIT may advance to such employees from $2 million to $4 million.
No other terms of the loan agreements were amended.
Item
2:
Management’s
Discussion and Analysis of Financial
Condition and Results of Operations
Cautionary
Statement Identifying Important Factors That Could Cause FREIT’s Actual Results
to Differ From Those Projected in Forward Looking Statements.
Readers
of this discussion are advised that the discussion should be read in conjunction
with the unaudited condensed consolidated financial statements of FREIT
(including related notes thereto) appearing elsewhere in this Form 10-Q, and the
consolidated financial statements included in FREIT’s most recently filed Form
10-K. Certain statements in this discussion may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements reflect FREIT’s current expectations
regarding future results of operations, economic performance, financial
condition and achievements of FREIT, and do not relate strictly to historical or
current facts. FREIT has tried, wherever possible, to identify these
forward-looking statements by using words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or
words of similar meaning.
Although
FREIT believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements are subject to
risks and uncertainties, which may cause the actual results to differ materially
from those projected. Such factors include, but are not limited to the
following: general economic and business conditions, which will, among other
things, affect demand for rental space, the availability of prospective tenants,
lease rents, the financial condition of tenants and the default rate on leases,
operating and administrative expenses and the availability of financing; adverse
changes in FREIT’s real estate markets, including, among other things,
competition with other real estate owners, competition confronted by tenants at
FREIT’s commercial properties, governmental actions and initiatives;
environmental/safety requirements; and risks of real estate development and
acquisitions. The risks with respect to the development of real estate include:
increased construction costs, inability to obtain construction financing, or
unfavorable terms of financing that may be available, unforeseen construction
delays and the failure to complete construction within
budget.
OVERVIEW
FREIT is
an equity real estate investment trust ("REIT") that owns a portfolio of
residential apartment and commercial properties. Our revenues consist primarily
of fixed rental income from our residential and commercial properties and
additional rent in the form of expense reimbursements derived from our income
producing commercial properties. Our properties are primarily located
in northern New Jersey and Maryland. We acquire existing properties for
investment. We also acquire properties, which we feel have redevelopment
potential, and make changes and capital improvements to these properties. We
develop and construct properties on our vacant land. Our policy is to acquire
and develop real property for long-term investment.
During
the past six and three month period ended April 30, 2008, we have identified the
following trends that have had an effect on our operating results and cash
flow:
Increased
occupancy and rental rates at our residential rental
properties:
As a result of the sub-prime mortgage fall-out,
generally homebuyers are experiencing less mortgage availability and higher
credit standards, coupled with higher interest costs. This has put a damper on
home and condominium purchases. It has, however, increased demand for apartment
rentals. The occupancy rates at our residential properties remain high, and we
have been aggressively increasing rental rates where possible.
Availability
of financing capital and interest rates:
Since the start of our
fiscal year, benchmark interest indexes, such as Treasury bond and LIBOR rates
have come down, although slight up ticks were registered in April and May 2008.
As a result of the volatility in the interest rate market, fewer lenders are in
the market for new loans, and the lenders that are in the market have increased
their spreads (the margin that lenders charge over current interest rates)
resulting in higher interest costs to borrowers. In this respect, FREIT has
benefited with respect to its variable rate mortgages since the spread on these
loans was fixed in prior periods at the time that these loans were closed,
resulting in lower interest costs during the last six-month period. Conversely,
the cost of financing at our future development projects at the Rotunda and
South Brunswick may prove more costly.
SIGNIFICANT
ACCOUNTING POLICIES AND ESTIMATES
Pursuant
to the Securities and Exchange Commission ("SEC") disclosure guidance for
"Critical Accounting Policies," the SEC defines Critical Accounting Policies as
those that require the application of management's most difficult, subjective,
or complex judgments, often because of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.
Our
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, the preparation of which takes
into account estimates based on judgments and assumptions that affect certain
amounts and disclosures. Accordingly, actual results could differ from these
estimates. The accounting policies and estimates used, which are outlined in
Note 1 to our Consolidated Financial Statements included in our Annual Report on
Form 10-K for the year ended October 31, 2007, have been applied consistently as
at April 30, 2008 and October 31, 2007, and for the six and three months ended
April 30, 2008 and 2007. We believe that the following accounting policies or
estimates require the application of management's most difficult, subjective, or
complex judgments:
Revenue
Recognition: Base rents, additional rents based on tenants' sales volume and
reimbursement of the tenants' share of certain operating expenses are generally
recognized when due from tenants. The straight-line basis is used to recognize
base rents under leases if they provide for varying rents over the lease terms.
Straight-line rents represent unbilled rents receivable to the extent
straight-line rents exceed current rents billed in accordance with lease
agreements. Before FREIT can recognize revenue, it is required to assess, among
other things, its collectibility. If we incorrectly determine the collectibility
of revenue, our net income and assets could be overstated.
Valuation
of Long-Lived Assets: We periodically assess the carrying value of long-lived
assets whenever we determine that events or changes in circumstances indicate
that their carrying amount may not be recoverable. When FREIT determines that
the carrying value of long-lived assets may be impaired, the measurement of any
impairment is based on a projected discounted cash flow method determined by
FREIT's management. While we believe that our discounted cash flow methods are
reasonable, different assumptions regarding such cash flows may significantly
affect the measurement of impairment.
All
references to per share amounts are on a diluted basis unless otherwise
indicated.
RESULTS
OF OPERATIONS
Real
Estate revenue for the six months ended April 30, 2008 (“Current Six Months”)
increased 3.2% to $20,706,000 compared to $20,055,000 for the six months ended
April 30, 2007 (“Prior Six Months”). Real Estate revenue for the three months
ended April 30, 2008 (“Current Quarter”) increased 3.0% to $10,249,000 compared
to $9,948,000 for the three months ended April 30, 2007 (“Prior Year’s
Quarter”). The increase in real estate revenues was principally
attributable to FREIT’s residential operations, primarily at The Boulders and
The Pierre Towers, which accounted for 58% and 56% of the increase for the
current six and three month periods, respectively.
Net
income for the Current Six Months was $2,640,000 ($0.38 diluted) compared to
$1,977,000 ($0.29 diluted) for the Prior Six Months. Net income for the Current
Quarter was $1,237,000 ($0.18 diluted) compared to $1,131,000 ($0.16 diluted)
for the Prior Year’s Quarter. Refer to the schedule below for a detailed
analysis of the major changes that impacted revenue and net income for the six
and three months ended April 30, 2008 and 2007:
NET
INCOME COMPONENTS
|
|
|
|
Six
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
April
30,
|
|
|
April
30,
|
|
|
|
2008
|
|
|
2007*
|
|
|
Change
|
|
|
2008
|
|
|
2007*
|
|
|
Change
|
|
|
|
(thousands
of dollars)
|
|
|
(thousands
of dollars)
|
|
Commercial
Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Properties
(1)
|
|
$
|
6,623
|
|
|
$
|
6,504
|
|
|
$
|
119
|
|
|
$
|
3,273
|
|
|
$
|
3,186
|
|
|
$
|
87
|
|
Damascus Center
- undergoing renovation
|
|
|
144
|
|
|
|
193
|
|
|
|
(49
|
)
|
|
|
90
|
|
|
|
82
|
|
|
|
8
|
|
Total
Commercial Properties
|
|
|
6,767
|
|
|
|
6,697
|
|
|
|
70
|
|
|
|
3,363
|
|
|
|
3,268
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
Properties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Properties
(1)
|
|
|
5,257
|
|
|
|
4,927
|
|
|
|
330
|
|
|
|
2,641
|
|
|
|
2,615
|
|
|
|
26
|
|
Total
Residential Properties
|
|
|
5,257
|
|
|
|
4,927
|
|
|
|
330
|
|
|
|
2,641
|
|
|
|
2,615
|
|
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
income from real estate operations
|
|
|
12,024
|
|
|
|
11,624
|
|
|
|
400
|
|
|
|
6,004
|
|
|
|
5,883
|
|
|
|
121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
rate mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Properties
(1)
|
|
|
(5,179
|
)
|
|
|
(5,271
|
)
|
|
|
92
|
|
|
|
(2,618
|
)
|
|
|
(2,647
|
)
|
|
|
29
|
|
Floating
Rate - Rotunda
|
|
|
(639
|
)
|
|
|
(817
|
)
|
|
|
178
|
|
|
|
(267
|
)
|
|
|
(398
|
)
|
|
|
131
|
|
Total
financing costs
|
|
|
(5,818
|
)
|
|
|
(6,088
|
)
|
|
|
270
|
|
|
|
(2,885
|
)
|
|
|
(3,045
|
)
|
|
|
160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
income
|
|
|
313
|
|
|
|
225
|
|
|
|
88
|
|
|
|
154
|
|
|
|
138
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
expenses
|
|
|
(497
|
)
|
|
|
(461
|
)
|
|
|
(36
|
)
|
|
|
(286
|
)
|
|
|
(301
|
)
|
|
|
15
|
|
Accounting
|
|
|
(313
|
)
|
|
|
(342
|
)
|
|
|
29
|
|
|
|
(134
|
)
|
|
|
(112
|
)
|
|
|
(22
|
)
|
Minority
interest in earnings of subsidiaries
|
|
|
(395
|
)
|
|
|
(258
|
)
|
|
|
(137
|
)
|
|
|
(280
|
)
|
|
|
(120
|
)
|
|
|
(160
|
)
|
Distribution
to Westwood Hills minority interests (2)
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
150
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Properties
(1)
|
|
|
(2,674
|
)
|
|
|
(2,649
|
)
|
|
|
(25
|
)
|
|
|
(1,336
|
)
|
|
|
(1,346
|
)
|
|
|
10
|
|
Total
depreciation
|
|
|
(2,674
|
)
|
|
|
(2,649
|
)
|
|
|
(25
|
)
|
|
|
(1,336
|
)
|
|
|
(1,346
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
|
2,640
|
|
|
|
1,901
|
|
|
|
739
|
|
|
|
1,237
|
|
|
|
1,097
|
|
|
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
|
|
-
|
|
|
|
76
|
|
|
|
(76
|
)
|
|
|
-
|
|
|
|
34
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
|
$
|
663
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
|
$
|
106
|
|
* Restated
to reflect reclassification of discontinued operations.
(1)
Properties operated since the beginning of fiscal 2007.
(2) Prior
to change of Terms of LLC Operating Agreement effective June 1, 2007 with
respect to recovery of
distributions
in excess of cumulative net income of the LLC.
The
consolidated results of operations for the Current Six Months and Current
Quarter are not necessarily indicative of the results to be expected for the
full year.
SEGMENT
INFORMATION
The
following table sets forth comparative net operating income ("NOI")
data for
FREIT’s real estate segments and reconciles the NOI to consolidated net income
for the Current Six Months and Current Quarter, as compared to the prior year’s
comparable periods:
Six Months Ended April
30:
|
|
|
|
Commercial
|
|
|
Residential
|
|
|
Combined
|
|
|
|
Six
Months Ended
April
30,
|
|
|
Increase (Decrease)
|
|
|
Six
Months Ended
April
30,
|
|
|
Increase (Decrease)
|
|
|
Six
Months Ended
April
30,
|
|
|
|
2008
|
|
|
2007
|
|
|
$
|
|
|
%
|
|
|
2008
|
|
|
2007*
|
|
|
$
|
|
|
%
|
|
|
2008
|
|
|
2007*
|
|
|
|
($
in thousands)
|
|
|
|
|
|
($
in thousands)
|
|
|
|
|
|
|
($
in thousands)
|
|
Rental
income
|
|
$
|
8,486
|
|
|
$
|
8,262
|
|
|
$
|
224
|
|
|
|
2.7
|
%
|
|
$
|
9,438
|
|
|
$
|
8,974
|
|
|
$
|
464
|
|
|
|
5.2
|
%
|
|
$
|
17,924
|
|
|
$
|
17,236
|
|
Reimbursements
|
|
|
2,456
|
|
|
|
2,373
|
|
|
|
83
|
|
|
|
3.5
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
2,456
|
|
|
|
2,373
|
|
Other
|
|
|
97
|
|
|
|
100
|
|
|
|
(3
|
)
|
|
|
-3.0
|
%
|
|
|
89
|
|
|
|
81
|
|
|
|
8
|
|
|
|
9.9
|
%
|
|
|
186
|
|
|
|
181
|
|
Total
revenue
|
|
|
11,039
|
|
|
|
10,735
|
|
|
|
304
|
|
|
|
2.8
|
%
|
|
|
9,527
|
|
|
|
9,055
|
|
|
|
472
|
|
|
|
5.2
|
%
|
|
|
20,566
|
|
|
|
19,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
4,412
|
|
|
|
4,303
|
|
|
|
109
|
|
|
|
2.5
|
%
|
|
|
4,270
|
|
|
|
4,128
|
|
|
|
142
|
|
|
|
3.4
|
%
|
|
|
8,682
|
|
|
|
8,431
|
|
Net
operating income
|
|
$
|
6,627
|
|
|
$
|
6,432
|
|
|
$
|
195
|
|
|
|
3.0
|
%
|
|
$
|
5,257
|
|
|
$
|
4,927
|
|
|
$
|
330
|
|
|
|
6.7
|
%
|
|
|
11,884
|
|
|
|
11,359
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
%
|
|
|
90.0
|
%
|
|
|
89.7
|
%
|
|
|
|
|
|
|
0.3
|
%
|
|
|
95.2
|
%
|
|
|
94.3
|
%
|
|
|
|
|
|
|
0.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
rents - straight lining
|
|
|
|
92
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of acquired leases
|
|
|
|
48
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
313
|
|
|
|
225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
|
(810
|
)
|
|
|
(803
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
(2,674
|
)
|
|
|
(2,649
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
costs
|
|
|
|
(5,818
|
)
|
|
|
(6,088
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to certain minority interests
|
|
|
|
-
|
|
|
|
(150
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
|
(395
|
)
|
|
|
(258
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
|
|
2,640
|
|
|
|
1,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
|
|
|
-
|
|
|
|
76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
* Restated
to reflect reclassification of discontinued operations.
Three Months Ended
April 30:
|
|
|
|
Commercial
|
|
|
Residential
|
|
|
Combined
|
|
|
|
Three
Months Ended
April 30,
|
|
|
Increase (Decrease)
|
|
|
Three
Months Ended
April 30,
|
|
|
Increase (Decrease)
|
|
|
Three
Months Ended
April 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
$
|
|
|
%
|
|
|
2008
|
|
|
2007*
|
|
|
$
|
|
|
%
|
|
|
2008
|
|
|
2007*
|
|
|
|
($
in thousands)
|
|
|
|
|
|
($
in thousands)
|
|
|
|
|
|
($
in thousands)
|
|
Rental
income
|
|
$
|
4,292
|
|
|
$
|
4,126
|
|
|
$
|
166
|
|
|
|
4.0
|
%
|
|
$
|
4,723
|
|
|
$
|
4,521
|
|
|
$
|
202
|
|
|
|
4.5
|
%
|
|
$
|
9,015
|
|
|
$
|
8,647
|
|
Reimbursements
|
|
|
1,071
|
|
|
|
1,089
|
|
|
|
(18
|
)
|
|
|
-1.7
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
1,071
|
|
|
|
1,089
|
|
Other
|
|
|
52
|
|
|
|
57
|
|
|
|
(5
|
)
|
|
|
-8.8
|
%
|
|
|
42
|
|
|
|
21
|
|
|
|
21
|
|
|
|
100.0
|
%
|
|
|
94
|
|
|
|
78
|
|
Total
revenue
|
|
|
5,415
|
|
|
|
5,272
|
|
|
|
143
|
|
|
|
2.7
|
%
|
|
|
4,765
|
|
|
|
4,542
|
|
|
|
223
|
|
|
|
4.9
|
%
|
|
|
10,180
|
|
|
|
9,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
2,121
|
|
|
|
2,138
|
|
|
|
(17
|
)
|
|
|
-0.8
|
%
|
|
|
2,124
|
|
|
|
1,927
|
|
|
|
197
|
|
|
|
10.2
|
%
|
|
|
4,245
|
|
|
|
4,065
|
|
Net
operating income
|
|
$
|
3,294
|
|
|
$
|
3,134
|
|
|
$
|
160
|
|
|
|
5.1
|
%
|
|
$
|
2,641
|
|
|
$
|
2,615
|
|
|
$
|
26
|
|
|
|
1.0
|
%
|
|
|
5,935
|
|
|
|
5,749
|
|
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupancy
%
|
|
|
90.7
|
%
|
|
|
89.9
|
%
|
|
|
|
|
|
|
0.8
|
%
|
|
|
94.7
|
%
|
|
|
94.7
|
%
|
|
|
|
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
to consolidated net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
rents - straight lining
|
|
|
|
45
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of acquired leases
|
|
|
|
24
|
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
|
154
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
|
(420
|
)
|
|
|
(413
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
(1,336
|
)
|
|
|
(1,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
costs
|
|
|
|
(2,885
|
)
|
|
|
(3,045
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions
to certain minority interests
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
|
(280
|
)
|
|
|
(120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations
|
|
|
|
1,237
|
|
|
|
1,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from discontinued operations
|
|
|
|
-
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
* Restated
to reflect reclassification of discontinued operations.
NOI is
based on operating revenue and expenses directly associated with the operations
of the real estate properties, but excludes deferred rents (straight lining),
lease amortization, depreciation, and financing costs. FREIT assesses and
measures segment operating results based on NOI. NOI is not a measure of
operating results or cash flow as measured by generally accepted accounting
principles, and is not necessarily indicative of cash available to fund cash
needs and should not be considered an alternative to cash flows as a measure of
liquidity.
SUPPLEMENTARY
SEGMENT INFORMATION
Commercial
lease expirations as at October 31, 2007, assuming none of the tenants exercise
renewal options:
|
|
|
|
|
|
|
|
|
|
|
Annual
Rent of Expiring Leases
|
|
|
|
Number
of
Expiring
Leases
|
|
|
|
|
|
Percent
of
Commercial Sq.
Ft.
|
|
|
Total
|
|
|
Per
Sq. Ft.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Month
to month
|
|
24
|
|
|
59,092
|
|
|
5.4%
|
|
|
$
|
1,082,497
|
|
|
$
|
18.32
|
|
2008
|
|
20
|
|
|
67,554
|
|
|
6.2%
|
|
|
$
|
1,339,565
|
|
|
$
|
19.83
|
|
2009
|
|
15
|
|
|
44,143
|
|
|
4.1%
|
|
|
$
|
801,213
|
|
|
$
|
18.15
|
|
2010
|
|
19
|
|
|
89,719
|
|
|
8.3%
|
|
|
$
|
1,283,854
|
|
|
$
|
14.31
|
|
2011
|
|
15
|
|
|
57,081
|
|
|
5.2%
|
|
|
$
|
1,342,052
|
|
|
$
|
23.51
|
|
2012
|
|
10
|
|
|
191,758
|
|
|
17.6%
|
|
|
$
|
1,384,803
|
|
|
$
|
7.22
|
|
2013
|
|
4
|
|
|
33,346
|
|
|
3.1%
|
|
|
$
|
641,326
|
|
|
$
|
19.23
|
|
2014
|
|
4
|
|
|
20,121
|
|
|
1.9%
|
|
|
$
|
318,276
|
|
|
$
|
15.82
|
|
2015
|
|
7
|
|
|
76,104
|
|
|
7.0%
|
|
|
$
|
862,806
|
|
|
$
|
11.34
|
|
2016
|
|
3
|
|
|
20,576
|
|
|
1.9%
|
|
|
$
|
172,432
|
|
|
$
|
8.38
|
|
2017
|
|
1
|
|
|
2,786
|
|
|
0.3%
|
|
|
$
|
65,471
|
|
|
$
|
23.50
|
|
The
following tables present the average rental income on a per unit and square foot
basis for each of our Residential and Commercial properties, respectively for
the Current Six Months and Prior Six Months:
Residential
Apartment Properties:
|
|
|
|
|
Commercial
Properties:
|
|
|
|
|
|
|
|
Property
& Location
|
|
No.
of Units
|
|
|
Average
Occupancy Rate @ 4/30/08
|
|
|
Average
Monthly Rent per Unit @ 4/30/08
|
|
|
Average
Monthly Rent per Unit @ 4/30/07
|
|
Property
& Location
|
|
Leaseable
Space - Approximate Sq. Ft.
|
|
|
Average
Occupancy Rate @ 4/30/08
|
|
|
Average
Annualized Rent per Sq. Ft. @ 4/30/08
|
|
|
Average
Annualized Rent per Sq. Ft. @ 4/30/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Palisades
Manor
|
|
12
|
|
|
100.0%
|
|
|
$1,058
|
|
|
$1,031
|
|
Franklin Crossing
|
|
87,041
|
|
|
93.2%
|
|
|
$22.91
|
|
|
$21.92
|
|
Palisades
Park, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Franklin Lakes,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grandview
Apts.
|
|
20
|
|
|
100.0%
|
|
|
$1,138
|
|
|
$1,086
|
|
Westwood Plaza
|
|
173,854
|
|
|
100.0%
|
|
|
$12.77
|
|
|
$12.85
|
|
Hasbrouck
Heights, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Westwood,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Heights
Manor
|
|
79
|
|
|
92.4%
|
|
|
$1,127
|
|
|
$1,079
|
|
Westridge
Square
|
|
256,620
|
|
|
90.8%
|
|
|
$12.37
|
|
|
$12.25
|
|
Spring
Lake Heights, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Frederick,
MD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hammel Gardens
|
|
80
|
|
|
97.3%
|
|
|
$1,179
|
|
|
$1,157
|
|
Pathmark
Super Store
|
|
63,962
|
|
|
100.0%
|
|
|
$19.99
|
|
|
$18.49
|
|
Maywood,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Patchogue,
NY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steuben
Arms
|
|
100
|
|
|
97.0%
|
|
|
$1,251
|
|
|
$1,207
|
|
Glen Rock,
NJ
|
|
4,800
|
|
|
100.0%
|
|
|
$20.48
|
|
|
$20.48
|
|
River
Edge, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Berdan
Court
|
|
176
|
|
|
98.0%
|
|
|
$1,389
|
|
|
$1,337
|
|
Preakness Center
|
|
322,136
|
|
|
97.4%
|
|
|
$12.63
|
|
|
$12.13
|
|
Wayne,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Wayne,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pierre Towers
|
|
269
|
|
|
93.9%
|
|
|
$1,764
|
|
|
$1,703
|
|
Damascus Center*
|
|
139,878
|
|
|
52.3%
|
|
|
$8.02
|
|
|
$9.56
|
|
Hackensack,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Damascus,
MD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Westwood
Hills
|
|
210
|
|
|
93.7%
|
|
|
$1,402
|
|
|
$1,376
|
|
The
Rotunda
|
|
216,645
|
|
|
89.9%
|
|
|
$18.22
|
|
|
$17.95
|
|
Westwood
Hills, NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
Baltimore,
MD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boulders
|
|
129
|
|
|
94.7%
|
|
|
$1,358
|
|
|
$1,262
|
|
*
Undergoing renovation and expansion.
|
|
|
|
|
|
|
|
Rockaway,
NJ
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL
SEGMENT
FREIT’s
commercial properties consist of ten (10) properties totaling approximately
1,127,000 sq. ft. of retail space and 138,000 sq. ft. of office
space. Seven (7) are multi-tenanted retail or office centers, and one
is a single tenanted store. In addition, FREIT has two parcels of leased land,
from which it receives rental income. One is from a tenant who has built and
operates a bank branch on land FREIT owns in Rockaway, NJ. The other is from a
tenant who intends to build and operate a bank branch on land FREIT owns in
Rochelle Par, NJ.
As
indicated in the above Segment Information table, revenue from FREIT’s
commercial segment for the Current Six Months and Current Quarter increased by
2.8% and 2.7%, respectively, over the comparable prior year’s periods. NOI for
the Current Six Months and Current Quarter increased by 3.0% and 5.1%, over the
comparable prior year’s periods. The favorable increase in both revenue and NOI
was primarily attributable to our land in Rochelle Park, purchased in September
2007, which was generating revenue for the full Current Six Month period.
However, the current year increases in both revenues and NOI were adversely
affected by the anticipated planned renovation at our Damascus Shopping Center
property located in Damascus, MD (the “Damascus Center”), which caused a
temporary decline in occupancy levels at the Damascus Center. Average occupancy
rates for FREIT’s commercial segment for the Current Six Months was at 94.7%,
exclusive of the Damascus Center, compared to 93.8% for the prior year’s period.
As a result of this renovation, temporary declines in both revenue and NOI were
experienced at the Damascus Center of $61,000 and $50,000, respectively for the
Current Six Month period. (See discussion below
).
The
impact of the Damascus renovation on the six and three month results of the
commercial segment is reflected in the following table:
|
|
|
Six
Months Ended April 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
Commercial
|
|
|
|
|
|
Same
|
|
|
Commercial
|
|
|
|
|
|
Same
|
|
($000)
|
|
|
Properties
|
|
|
Damascus
|
|
|
Properties
|
|
|
Properties
|
|
|
Damascus
|
|
|
Properties
|
|
Revenues
|
|
|
$
|
11,039
|
|
|
$
|
354
|
|
|
$
|
10,685
|
|
|
$
|
10,735
|
|
|
$
|
415
|
|
|
$
|
10,320
|
|
Expenses
|
|
|
|
4,412
|
|
|
|
208
|
|
|
|
4,204
|
|
|
|
4,303
|
|
|
|
219
|
|
|
|
4,084
|
|
NOI
|
|
|
$
|
6,627
|
|
|
$
|
146
|
|
|
$
|
6,481
|
|
|
$
|
6,432
|
|
|
$
|
196
|
|
|
$
|
6,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended April 30,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
Commercial
|
|
|
|
|
|
|
Same
|
|
|
Commercial
|
|
|
|
|
|
|
Same
|
|
($000)
|
|
|
Properties
|
|
|
Damascus
|
|
|
Properties
|
|
|
Properties
|
|
|
Damascus
|
|
|
Properties
|
|
Revenues
|
|
|
$
|
5,415
|
|
|
$
|
202
|
|
|
$
|
5,213
|
|
|
$
|
5,272
|
|
|
$
|
216
|
|
|
$
|
5,056
|
|
Expenses
|
|
|
|
2,121
|
|
|
|
110
|
|
|
|
2,011
|
|
|
|
2,138
|
|
|
|
131
|
|
|
|
2,007
|
|
NOI
|
|
|
$
|
3,294
|
|
|
$
|
92
|
|
|
$
|
3,202
|
|
|
$
|
3,134
|
|
|
$
|
85
|
|
|
$
|
3,049
|
|
DEVELOPMENT
ACTIVITIES
A
modernization and expansion is underway at our Damascus Center in Damascus, MD
(owned by our 70% owned affiliate, Damascus Centre, LLC). Total construction
costs are expected to approximate $21.9 million. Building plans for
Phase I have been approved and construction on Phase I began in June 2007 with
completion expected no later than June 2008. Phase I construction costs will
approximate $4 - $4.5 million of which approximately $4.2 million has already
been expended. On February 12, 2008, Damascus Centre, LLC closed on a $27.3
million construction loan that is available to fund already expended and future
construction costs. This loan will be drawn upon as needed. As of
April 30, 2008, Damascus drew down $4.2 million from this loan to cover`
construction costs. (See “Liquidity and Capital Resources” for additional
information regarding this loan.) Because of this expansion, leases for certain
tenants have been allowed to expire and not renewed. This has caused occupancy
to decline, on a temporary basis, during the construction phase.
Development
plans and studies for the expansion and renovation of our Rotunda property in
Baltimore, MD (owned by our 60% owned affiliate Grande Rotunda, LLC) continues.
The Rotunda property, on an 11.5-acre site, currently consists of an office
building containing 138,000 sq. ft. of office space and 78,000 sq. ft. of retail
space on the lower floor of the main building. The building plans incorporate an
expansion of approximately 180,500 sq ft. of retail space, approximately 302
residential rental apartments, 56 condominium units and 120 hotel rooms, and
structured parking. These development costs are expected to approximate $145
million. City Planning Board approval has been received, and construction is
expected to start during calendar 2008.
FREIT
recently completed the re-configuration and renovation of the space formerly
occupied by a movie theater at its Westridge Square Shopping Center in
Frederick, MD at a cost approximating $1 million. The former movie theater
operator, as part of its lease termination fee, supplied the funds for this
re-configuration.
RESIDENTIAL
SEGMENT
FREIT
operates nine (9) multi-family apartment communities totaling 1,075 apartment
units. As indicated in the table above, revenue from our residential segment for
the Current Six Months increased 5.2% to $9,527,000 and NOI for the same period
is also up 6.7% to $5,257,000. For the Current Quarter, revenue increased 4.9%
to $4,765,000 and NOI is also up slightly by 1.0% to $2,641,000. The primary
reason for the increase was higher occupancy levels, specifically at The
Boulders and The Pierre Towers, which continue to be strong contributors to
FREIT’s residential operations, accounting for 81% of the increase in revenue
and 88% of the increase in NOI for the Current Six Months.
Revenues
from FREIT’s residential properties continue to increase. Average occupancy
rates for the Current Six Months increased to 95.2%, compared to 94.3% for the
Prior Six Months. The occupancy level at The Boulders was in excess of 96% at
the end of April 2008, and averaged 94.7% during the Current Six Month
period.
Our
residential revenue is principally composed of monthly apartment rental income.
Total rental income is a factor of occupancy and monthly apartment rents.
Monthly average residential rents at the end of the Current Six Months and the
Prior Six Month period were $1,547 and $1,472, respectively. A 1% decline in
annual average occupancy, or a 1% decline in average rents from current levels,
results in an annual revenue decline of approximately $199,600 and $187,900,
respectively.
Capital
expenditures: Since all of our apartment communities, with the exception of The
Boulders, were constructed more than 25 years ago, we tend to spend more in any
given year on maintenance and capital improvements than may be spent on newer
properties. A major renovation program is ongoing at The Pierre Towers apartment
complex (“The Pierre”). We intend to modernize, where required, all apartments
and some of the buildings’ mechanical services. This renovation is expected to
cost approximately $3 - $4 million, and apartments are to be renovated as they
become temporarily vacant, over the next several years. These costs will be
financed from operating cash flow and cash reserves. Through April 30, 2008, we
expended approximately $2.8 million in capital improvements at The Pierre,
including approximately $78,000 during the Current Six Months.
FINANCING
COSTS
|
|
Six
Months Ended
|
|
|
Three Months
Ended
|
|
|
|
April 30,
|
|
|
April 30,
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
|
|
($
in thousands)
|
|
|
($
in thousands)
|
|
Fixed
rate mortgages:
|
|
|
|
|
|
|
|
|
|
|
|
|
1st
Mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
Existing
|
|
$
|
4,365
|
|
|
$
|
3,815
|
|
|
$
|
1,996
|
|
|
$
|
1,422
|
|
New
|
|
|
61
|
|
|
|
-
|
|
|
|
61
|
|
|
|
|
|
2nd
Mortgages
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Existing
|
|
|
597
|
|
|
|
1,168
|
|
|
|
467
|
|
|
|
1,035
|
|
Variable
rate mortgages:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
loan-Rotunda
|
|
|
678
|
|
|
|
788
|
|
|
|
286
|
|
|
|
383
|
|
Construction
loan-Damascus
|
|
|
18
|
|
|
|
-
|
|
|
|
18
|
|
|
|
|
|
Other
|
|
|
115
|
|
|
|
185
|
|
|
|
60
|
|
|
|
138
|
|
|
|
|
5,834
|
|
|
|
5,956
|
|
|
|
2,888
|
|
|
|
2,978
|
|
Amortization
of Mortgage Costs
|
|
|
141
|
|
|
|
132
|
|
|
|
68
|
|
|
|
67
|
|
Total
Financing Costs
|
|
|
5,975
|
|
|
|
6,088
|
|
|
|
2,956
|
|
|
|
3,045
|
|
Less
amount capitalized
|
|
|
(157
|
)
|
|
|
-
|
|
|
|
(71
|
)
|
|
|
-
|
|
Financing
costs expensed
|
|
$
|
5,818
|
|
|
$
|
6,088
|
|
|
$
|
2,885
|
|
|
$
|
3,045
|
|
Financing
costs before capitalized amounts for the Current Six Months and Current Quarter
decreased 1.9% and 2.9%, over the prior year’s comparable periods. This decrease
was primarily attributable to our $22.5 million acquisition loan for The Rotunda
property, which bears a floating interest rate. Lower interest rates over the
course of the Current Six Month period decreased the level of interest expense
for the Rotunda by approximately $178,000 and $131,000, to $639,000 and $267,000
for the Current Six Months and Current Quarter, respectively.
NET
INVESTMENT INCOME
Net
investment income for the Current Six Months and Current Quarter increased 39%
and 12% to $313,000 and $154,000, respectively, over the comparable prior year’s
periods. Net investment income is principally derived from interest earned from
cash on deposit in institutional money market funds and interest earned from
secured loans receivable (loans made to Hekemian employees, including certain
members of the immediate family of Robert S. Hekemian, FREIT’s CEO and Chairman
of the Board, for their equity investment in Grande Rotunda, LLC, a limited
liability company, in which FREIT owns a 60% equity interest and Damascus
Center, LLC, a limited liability company, in which FREIT owns a 70% equity
interest). The increase in net investment income was primarily attributable to
higher interest income for the Current Six Months and Current Quarter due to
higher interest rates on the Company’s investments.
GENERAL
AND ADMINISTRATIVE EXPENSES (“G & A”)
During
the Current Six Months and Current Quarter, G & A was $810,000 and $420,000,
respectively, as compared to $803,000 and $413,000 for the prior year’s periods.
The increases for the Current Six Month and Current Quarter periods were
primarily attributable to increased office overhead costs and Trustees’ fees
offset by reduced accounting fees.
DEPRECIATION
Depreciation
expense for the Current Six Months and Current Quarter was $2,674,000 and
$1,336,000, respectively, an increase of $25,000 from the Prior Six Months and a
decrease of $10,000 from the Prior Year’s Quarter. The increase was primarily
attributable to FREIT’s residential operations, specifically with respect to
current renovation and construction projects becoming operational at both The
Pierre and The Boulders during FREIT’s first quarter ended January 31,
2008.
LIQUIDITY
AND CAPITAL RESOURCES
Our
financial condition remains strong. Net Cash Provided By Operating Activities
was $7.5 million for the Current Six Months compared to $6.0 million for the
Prior Six Months. We expect that cash provided by operating activities will be
adequate to cover mandatory debt service payments, recurring capital
improvements and dividends necessary to retain qualification as a REIT (90% of
taxable income).
As at
April 30, 2008, we had cash and marketable securities totaling $11.6 million
compared to $12.7 million at October 31, 2007.
Credit
Line:
FREIT has
an $18 million line of credit provided by the Provident Bank. The line of credit
is for three years but can be cancelled by the bank, at its will, at each
anniversary date. Draws against the credit line can be used for general
corporate purposes, for property acquisitions, construction activities, and
letters of credit. Draws against the credit line are secured by mortgages on
FREIT’s Franklin Crossing Shopping Center, Franklin Lakes, NJ, retail space in
Glen Rock, NJ, Palisades Manor Apartments, Palisades Park, NJ, and Grandview
Apartments, Hasbrouck Heights, NJ.
.
Interest rates on
draws will be set at the time of each draw for 30, 60, or 90-day periods, based
on our choice of the prime rate or at 175 basis points over the 30, 60, or
90-day LIBOR rates at the time of the draws.
In
connection with its construction activities at The Boulders in Rockaway, NJ,
FREIT had drawn down $1.5 million and further utilized the credit line for the
issuance of a $2 million Letter of Credit (“LoC”). The $1.5 million was repaid
during the Prior Year’s 1
st
Quarter
and the $2 million LoC was retired on May 16, 2007. $18 million is currently
available under the line of credit.
We are planning an expansion and
redevelopment of The Rotunda in Baltimore, MD and have begun the rebuilding of
the Damascus Shopping Center, in Damascus, MD. The total capital required for
these projects is estimated at $145 million, and $21.9 million, respectively.
Financing for the Rotunda project will be, in part, from mortgage financing and,
in part, from funds available in our institutional money market investment. On
February 12, 2008, Damascus Centre, LLC (“Damascus Centre”) closed on a $27.3
million construction loan that is available to fund already expended and future
construction costs. This loan has a term of forty-eight (48) months, with one
twelve (12) month extension option. FREIT has guaranteed 30% of the loan, and
the minority interests, who have a 30% investment in the Damascus Centre, have
agreed to indemnify FREIT for their share of the guarantee. Draws against this
loan bear interest at a floating rate equal to LIBOR +1.35%. On April 30, 2008,
Damascus drew down $4.2 million of this loan to cover construction costs.
We expect
these development projects to add to revenues, income, cash flow, and
shareholder value.
April 30,
2008, FREIT’s aggregate outstanding mortgage debt was $192.6 million and bears a
weighted average interest rate of 5.99%, and an average life of approximately
5.8 years. These fixed rate mortgages are subject to amortization schedules that
are longer than the term of the mortgages. As such, balloon payments (unpaid
principal amounts at mortgage due date) for all mortgage debt will be required
as follows:
Fiscal
Year
|
|
2008
|
|
|
2010
|
|
|
2013
|
|
|
2014
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2022
|
|
($
in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
"Balloon" Payments
|
|
$
|
22.5
|
|
|
$
|
12.2
|
|
|
$
|
8.0
|
|
|
$
|
25.9
|
|
|
$
|
24.5
|
|
|
$
|
22.0
|
|
|
$
|
5.9
|
|
|
$
|
28.1
|
|
|
$
|
14.4
|
|
|
|
April 30,
|
|
|
October 31,
|
|
($
in Millions)
|
|
2008
|
|
|
2007
|
|
Fair
Value
|
|
$199.0
|
|
|
$188.7
|
|
|
|
|
|
|
|
|
Carrying
Value
|
|
$192.6
|
|
|
$189.4
|
|
The
following table shows the estimated fair value and carrying value of our
long-term debt at April 30, 2008 and October 31, 2007:
Fair
values are estimated based on market interest rates at April 30, 2008 and
October 31, 2007 and on discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value
estimates.
FREIT
expects to refinance the individual mortgages with new mortgages when their
terms expire. To this extent we have exposure to interest rate risk. If interest
rates, at the time any individual mortgage note is due, are higher than the
current fixed interest rate, higher debt service may be required, and/or
refinancing proceeds may be less than the amount of mortgage debt being retired.
For example, at April 30, 2008 a 1% interest rate increase would reduce the fair
value of our debt by $10.1 million, and a 1% decrease would increase the fair
value by $11.0 million.
FREIT
also has interest rate exposure on its floating rate loans. Currently, FREIT has
$26.7 million in floating rate loans outstanding, of which $22.5 million relates
to the acquisition loan for The Rotunda and $4.2 million relates to the
construction loans for the Damascus redevelopment project. A 1% rate fluctuation
would impact FREIT’s annual interest cost by approximately
$267,000.
We
believe that the values of our properties will be adequate to command
refinancing proceeds equal to or higher than the mortgage debt to be refinanced.
We continually review our debt levels to determine if additional debt can
prudently be utilized for property acquisition additions to our real estate
portfolio that will increase income and cash flow to our
shareholders.
FREIT had
a variable interest rate mortgage secured by its Patchogue, NY property. To
limit interest rate volatility on this loan, FREIT entered into an interest rate
swap contract. This loan came due on January 2, 2008. The due date of the loan
was extended to February 29, 2008.The interest rate swap contract terminated on
January 2, 2008. On February 29, 2008, the unpaid principal amount of this loan
of approximately $5.9 million was refinanced with a $6 million mortgage loan
bearing a fixed interest rate of 6.125%, with a ten (10) year term, and payable
according to a thirty (30) year amortization schedule. Under the terms of the
mortgage loan agreement, FREIT can request, during the term of the loan,
additional fundings that will bring the outstanding principal balance up to 75%
of loan-to-value (percentage of mortgage loan to total appraised value of
property securing the loan).
Share
repurchase program:
On April
9, 2008, FREIT’s Board of Trustees authorized up to $2 million for the
repurchase of FREIT shares commencing three (3) days after the announcement of
its operating results for the quarter ended April 30, 2008. Share repurchases
under this program may be made from time to time in the open market or through
privately negotiated transactions, depending on trading prices of FREIT shares
and other market conditions. This share repurchase program may be limited or
terminated at any time and without prior notice.
FUNDS
FROM OPERATIONS (“FFO”)
Many
consider FFO as the standard measurement of a REIT’s performance. We compute FFO
as follows:
Funds From Operations
("FFO")
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months Ended
|
|
|
Three
Months Ended
|
|
|
|
April 30,
|
|
|
April 30,
|
|
|
|
2008
|
|
|
2007*
|
|
|
2008
|
|
|
2007*
|
|
|
|
($
in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
2,640
|
|
|
$
|
1,977
|
|
|
$
|
1,237
|
|
|
$
|
1,131
|
|
Depreciation
|
|
|
2,674
|
|
|
|
2,649
|
|
|
|
1,336
|
|
|
|
1,346
|
|
Amortization
of deferred mortgage costs
|
|
|
141
|
|
|
|
132
|
|
|
|
68
|
|
|
|
67
|
|
Deferred
rents (Straight lining)
|
|
|
92
|
|
|
|
(114
|
)
|
|
|
45
|
|
|
|
(59
|
)
|
Amortization
of acquired leases
|
|
|
(48
|
)
|
|
|
(151
|
)
|
|
|
(24
|
)
|
|
|
(75
|
)
|
Capital
Improvements - Apartments
|
|
|
(258
|
)
|
|
|
(239
|
)
|
|
|
(118
|
)
|
|
|
(65
|
)
|
Discontinued
operations
|
|
|
-
|
|
|
|
(76
|
)
|
|
|
-
|
|
|
|
(34
|
)
|
Minority
interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
in earnings of affiliates
|
|
|
395
|
|
|
|
408
|
|
|
|
280
|
|
|
|
120
|
|
Distributions
to minority interests
|
|
|
(595
|
)
|
|
|
(387
|
)
|
|
|
(268
|
)
|
|
|
(87
|
)
|
FFO
|
|
$
|
5,041
|
|
|
$
|
4,199
|
|
|
$
|
2,556
|
|
|
$
|
2,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per
Share - Basic
|
|
$
|
0.74
|
|
|
$
|
0.62
|
|
|
$
|
0.38
|
|
|
$
|
0.35
|
|
Per
Share - Diluted
|
|
$
|
0.73
|
|
|
$
|
0.61
|
|
|
$
|
0.37
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding:
|
|
Basic
|
|
|
6,781
|
|
|
|
6,751
|
|
|
|
6,799
|
|
|
|
6,751
|
|
Diluted
|
|
|
6,894
|
|
|
|
6,916
|
|
|
|
6,911
|
|
|
|
6,915
|
|
|
* Restated
to reflect reclassification of discontinued
operations
|
FFO does
not represent cash generated from operating activities in accordance with
accounting principles generally accepted in the United States of America, and
therefore should not be considered a substitute for net income as a measure of
results of operations or for cash flow from operations as a measure of
liquidity. Additionally, the application and calculation of FFO by certain other
REITs may vary materially from that of FREIT’s, and therefore FREIT’s FFO and
the FFO of other REITs may not be directly comparable.
INFLATION
Inflation
can impact the financial performance of FREIT in various ways. Our commercial
tenant leases normally provide that the tenants bear all or a portion of most
operating expenses, which can reduce the impact of inflationary increases on
FREIT. Apartment leases are normally for a one-year term, which may allow us to
seek increased rents as leases renew or when new tenants are
obtained.
Item
3:
Quantitative
and Qualitative Disclosures About Market
Risk
See
“Residential Segment” and “Liquidity and Capital Resources” under Item 2 above
for a detailed discussion of FREIT’s quantitative and qualitative market risk
disclosures.
At the
end of the period covered by this report, we carried out an evaluation of the
effectiveness of the design and operation of FREIT’s disclosure controls and
procedures. This evaluation was carried out under the supervision and with
participation of FREIT’s management, including FREIT’s Chairman and Chief
Executive Officer and Chief Financial Officer, who concluded that FREIT’s
disclosure controls and procedures are effective. There has been no change in
FREIT’s internal control over financial reporting during the first six months of
fiscal 2008 that has materially affected, or is reasonably likely to materially
affect, FREIT’s internal control over financial reporting.
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in FREIT’s reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and
reported, within the time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
FREIT’s reports filed under the Exchange Act is accumulated and communicated to
management, including FREIT’s Chief Executive Officer and Chief Financial
Officer as appropriate, to allow timely decisions regarding required
disclosure.
Part
II: Other Information
Almost
all of FREIT’s income and cash flow is derived from the net rental income
(revenues after expenses) from our properties. FREIT’s business and financial
results are affected by the following fundamental factors:
|
§
|
the
national and regional economic
climate;
|
|
§
|
occupancy
rates at the properties;
|
|
§
|
tenant
improvement and leasing costs;
|
|
§
|
cost
of and availability of capital;
|
|
§
|
new
acquisitions and development projects;
and
|
|
§
|
changes
in governmental regulations, real estate tax rates and similar
matters.
|
A
negative quality change in the above factors could potentially cause a
detrimental effect on FREIT’s revenue, earnings and cash flow. If rental
revenues decline, we would expect to have less cash available to pay our
indebtedness and distribute to our shareholders.
Changes
in General Economic Climate
: FREIT derives the majority of its
revenues from renting apartments to individuals or families, and from retailers
renting space at its shopping centers. A decline in general economic conditions,
particularly in New Jersey and Maryland, where a majority of our properties are
located, may cause reductions in rental revenues. A decline in general economic
conditions may cause apartment tenants to double-up or vacate, causing increases
in vacancies, or to resist monthly rent increases. Additionally, a general
decline in economic conditions may cause a lack of consumer confidence,
resulting in lower levels of consumer spending that could adversely affect the
financial condition of some of our retail tenants, resulting in their inability
to pay rent and/or expense recovery charges (represents recovery of certain
common area maintenance charges, including insurance and real estate taxes).
These retail tenants may vacate or fail to exercise renewal options for their
space.
Tenants
unable to pay rent:
Financially distressed
tenants may be unable to pay rents and expense recovery charges, where
applicable, and may default on their leases. Enforcing our rights as landlord
could result in substantial costs and may not result in a full recovery of
unpaid rent. If a tenant files for bankruptcy, the tenant’s lease may be
terminated. In each such instance FREIT’s income and cash flow would be
negatively impacted.
Costs of
re-renting space
: If tenants fail to renew leases, fail to exercise
renewal options, or terminate their leases early, the lost rents due to vacancy
and the costs of re-renting the space could prove costly to FREIT. In addition
to cleaning and renovating the vacated space, we may be required to grant
concessions to a new tenant, and may incur leasing brokerage
commissions. The lease terms to a new tenant may be less favorable
than the prior tenant’s lease terms, and will negatively impact FREIT’s income
and cash flow and adversely affect our ability to pay mortgage debt and interest
or make distributions to our shareholders.
Inflation
may adversely affect our financial condition and results of
operations:
Increased inflation
could have a pronounced negative impact on our operating and administrative
expenses, as these costs may increase at a higher rate than our rents. While
increases in most operating expenses at our commercial properties can be passed
on to retail tenants, increases in expenses at our residential properties cannot
be passed on to residential tenants. Unreimbursed increased
operating
expenses may reduce cash flow available for payment of mortgage debt and
interest, and for distributions to shareholders.
Development
and construction risks
:
As part of
its investment strategy, FREIT seeks to acquire property for development and
construction, as well as to develop and build on land already in its portfolio.
FREIT is currently renovating its shopping center located in Damascus, Maryland,
and is planning a major development at its Rotunda property in Baltimore,
Maryland. In addition it is contemplating the construction of an industrial
building on its South Brunswick, New Jersey property. Development and
construction activities are challenged with the following risks, which may
adversely affect our cash flow:
|
·
|
financing
may not be available in the amounts we seek, or may not be on favorable
terms;
|
|
·
|
long-term
financing may not be available upon completion of the construction;
and
|
|
·
|
failure
to complete construction on schedule or within budget may increase debt
service costs and construction
costs.
|
Debt
financing could adversely affect income and cash flow:
FREIT relies on debt
financing to fund its growth through acquisitions and development activities. To
the extent third party debt financing is not available, or not available on
favorable terms, acquisitions and development activities will be
curtailed.
FREIT
currently has approximately $166 million of non-recourse mortgage debt subject
to fixed interest rates, and $26.7 million of partial recourse mortgage debt
subject to variable interest rates ($22.5 million relates to the acquisition of
the Rotunda property, and $4.2 million relates to the Damascus redevelopment
project). These mortgages are being repaid over periods (amortization schedules)
that are longer than the terms of the mortgages. Accordingly, when the mortgages
become due (at various times) significant balloon payments (the unpaid principal
amounts) will be required. FREIT expects to refinance the individual
mortgages with new mortgages when their terms expire. To this extent we have
exposure to capital availability and interest rate risk. If interest rates, at
the time any individual mortgage note is due, are higher than the current fixed
interest rate, higher debt service may be required and/or refinancing proceeds
may be less than the amount of the mortgage debt being retired.
To the
extent we are unable to refinance our indebtedness on acceptable terms, we may
need to dispose of one or more of our properties upon disadvantageous
terms.
Our
revolving $18 million credit line (currently unutilized and fully available) and
our acquisition mortgage loan contain financial covenants that could restrict
our acquisition activities and result in a default on these loans if we fail to
satisfy these covenants.
Real
estate is a competitive business:
FREIT
is subject to normal competition with other investors to acquire real property
and to profitably manage such property. Numerous other REITs, banks, insurance
companies and pension funds, as well as corporate and individual developers and
owners of real estate, compete with FREIT in seeking properties for acquisition
and for tenants. Many of these competitors have significantly greater financial
resources than FREIT. In addition, retailers at FREIT's commercial properties
face increasing competition from discount shopping centers, outlet malls, sales
through catalogue offerings, discount shopping clubs, marketing and shopping
through cable and computer sources, particularly over the internet, and
telemarketing. In many markets, the trade areas of FREIT's commercial properties
overlap with the trade areas of other shopping centers. Renovations and
expansions at those competing shopping centers and malls could negatively affect
FREIT's commercial properties by encouraging shoppers to make their purchases at
such new, expanded or renovated shopping centers and malls. Increased
competition through these various sources could adversely affect the viability
of FREIT's tenants, and any new commercial real estate competition developed in
the future could potentially have an adverse effect on the revenues of and
earnings from FREIT's commercial properties.
Illiquidity
of real estate investment:
Real estate investments
are relatively difficult to buy and sell quickly. Accordingly, the ability of
FREIT to vary its portfolio in response to changing economic, market or other
conditions is limited. Also, FREIT’s interests in its partially owned
subsidiaries are subject to transfer constraints by the operating agreements,
which govern FREIT’s investment in these partially owned
subsidiaries.
Environmental
problems may be costly:
Both federal and state
governments are concerned with the impact of real estate construction and
development programs upon the environment. Environmental legislation affects the
cost of selling real estate, the cost to develop real estate, and the risks
associated with purchasing real estate.
Under
various federal, state and local environmental laws, statutes, ordinances, rules
and regulations, an owner of real property may be liable for the costs of
removal or remediation of certain hazardous or toxic substances at, on, in or
under such property, as well as certain other potential costs relating to
hazardous or toxic substances (including government fines and penalties and
damages for injuries to persons and adjacent property). Such laws often impose
such liability without regard to whether the owners knew of, or were responsible
for, the presence or disposal of such substances. Such liability may be imposed
on the owner in connection with the activities of any operator of, or tenant at
the property. The cost of any required remediation, removal, fines or personal
or property damages and the owner's liability therefore could exceed the value
of the property and/or the aggregate assets of the owner. In addition, the
presence of such substances, or the failure to properly dispose of or remediate
such substances, may adversely affect the owner's ability to sell or rent such
property or to borrow using such property as collateral. If FREIT incurred any
such liability, it could reduce FREIT's revenues and ability to make
distributions to its shareholders.
A
property can also be negatively impacted by either physical contamination or by
virtue of an adverse effect upon value attributable to the migration of
hazardous or toxic substances, or other contaminants that have or may have
emanated from other properties.
FREIT
may fail to qualify as a REIT:
Since its inception in
1961, FREIT has elected, and will continue to operate so as to qualify as a REIT
for federal income tax purposes. In order to qualify as a REIT, we must satisfy
a number of highly technical and complex provisions of the Internal Revenue
Code. Governmental legislation, new regulations, administrative interpretations
may significantly change the tax laws with respect to the requirements for
qualification as a REIT, or the federal income tax consequences of qualifying as
a REIT. Although FREIT intends to continue to operate in a manner to allow it to
qualify as a REIT, future economic, market, legal, tax or other considerations
may cause it to revoke the REIT election or fail to qualify as a REIT. Such a
revocation would subject FREIT’s income to federal income tax at regular
corporate rates, and failure to qualify as a REIT would also eliminate the
requirement that we pay dividends to our shareholders.
Change
of investment and operating policies:
FREIT’s investment and
operating policies, including indebtedness and dividends, are exclusively
determined by FREIT’s Board of Trustees, and not subject to shareholder
approval.
Item
4:
Submission
of Matters to a Vote of Security
Holders
The
following matters were submitted to a vote of security holders at FREIT’s Annual
Meeting of Shareholders held on April 9, 2008:
A. Shareholders
re-elected Mr. Robert S. Hekemian, Mr. David F. McBride and Mr. Robert S.
Hekemian, Jr. to serve as Trustees for a three (3) year term. The balloting for
the elections was as follows:
|
Robert S. Hekemian
|
David F. McBride
|
Robert S. Hekemian,
Jr.
|
Votes
For
|
5,628,810
|
5,649,076
|
5,629,010
|
Votes
Withheld
|
94,966
|
74,700
|
94,766
|
The other
members of the Board of Trustees are as follows:
Name
|
Term
Expires
|
Donald W. Barney
|
April
2009
|
Ronald J. Artinian
|
April
2010
|
Alan L. Aufzien
|
April
2010
|
Herbert C. Klein,
Esq.
|
April
2009
|
Reference
is made to the Exhibit index below.
Exhibit
Index
|
|
Page
|
|
|
|
|
|
|
Exhibit
31.1 - Section 302 Certification of Chief Executive
Officer
|
|
24
|
|
|
|
Exhibit
31.2 - Section 302 Certification of Chief Financial
Officer
|
|
25
|
|
|
|
Exhibit
32.1 - Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350
|
|
26
|
|
|
|
Exhibit
32.2 - Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350
|
|
27
|
Reference
is made to the Exhibit index below
Exhibit
index
|
|
Page
|
|
|
|
|
|
|
Exhibit
10.1 –
|
Indemnification
Agreement – Damascus 100 LLC to FREIT
|
28
|
|
|
|
Exhibit
10.2 –
|
Indemnification
Agreement – Rotunda 100 LLC to FREIT
|
31
|
|
|
|
Exhibit
10.3 –
|
Sample
of notes to Hekemian employees for investment in Grande Rotunda, LLC.
(Promissory Notes, Pledge and Security Agreement, Amendment to Promissory
Notes and Pledge And Security Agreement)
|
34
|
|
|
|
Exhibit
10.4 –
|
Sample
of notes to Hekemian employees for investment in Damascus Centre, LLC.
(Promissory Notes, Pledge and Security Agreement)
|
93
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
FIRST
REAL ESTATE INVESTMENT
|
|
TRUST OF NEW
JERSEY
|
|
(Registrant)
|
|
|
Date:
June 9, 2008
|
|
|
/s/
Robert S. Hekemian
|
|
|
|
|
(Signature)
|
|
|
Robert
S. Hekemian
|
|
Chairman
of the Board and Chief Executive Officer
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
/s/
Donald W. Barney
|
|
|
|
|
(Signature)
|
|
|
Donald
W. Barney
|
|
President,
Treasurer and Chief Financial Officer
|
|
(Principal
Financial/Accounting Officer)
|
Page 23
EXHIBIT
31.1
CERTIFICATION
I, Robert
S. Hekemian, certify that:
|
1.
|
I
have reviewed this report on Form 10-Q of First Real Estate Investment
Trust of New Jersey;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: June
9, 2008
|
/s/ Robert S.
Hekemian
|
|
Robert
S. Hekemian
|
|
Chairman
of the Board and Chief Executive
Officer
|
Page 24
EXHIBIT
31.2
CERTIFICATION
I, Donald
W. Barney, certify that:
|
1.
|
I
have reviewed this report on Form 10-Q of First Real Estate Investment
Trust of New Jersey;
|
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
|
4.
|
The
registrant’s other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
|
5.
|
The
registrant’s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date: June
9, 2008
|
/s/ Donald W.
Barney
|
|
Donald
W. Barney
|
|
President,
Treasurer and Chief Financial
Officer
|
EXHIBIT
32.1
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of First Real Estate Investment Trust of
New Jersey (the “Company”) on Form 10-Q for the quarter ended April 30, 2008
(the “Report”), I, Robert S. Hekemian, Chairman of the Board and Chief Executive
Officer of the Company, do hereby certify, pursuant to 18 U.S.C.§ 1350, as
adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my
knowledge:
(1)
|
the
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934, 15 U.S.C. § 78m(a) or 78o(d),
and,
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: June
9, 2008
|
/s/ Robert S.
Hekemian
|
|
Robert
S. Hekemian
|
|
Chairman
of the Board and Chief Executive
Officer
|
EXHIBIT
32.2
CERTIFICATION
OF CHIEF FINANCIAL OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly
Report of First Real Estate Investment Trust of New Jersey (the “Company”) on
Form 10-Q for the quarter ended April 30, 2008 (the “Report”), I, Donald W.
Barney, President, Treasurer and Chief Financial Officer of the Company, do
hereby certify, pursuant to 18 U.S.C.§ 1350, as adopted pursuant to § 906 of the
Sarbanes-Oxley Act of 2002, that to my knowledge:
|
(1)
|
the
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934, 15 U.S.C. § 78m(a) or 78o(d),
and,
|
|
(2)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
Date: June
9, 2008
|
/s/ Donald W.
Barney
|
|
Donald
W. Barney
|
|
President,
Treasurer and Chief Financial
Officer
|
EXHIBIT
10.1
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“the Agreement”) dated as of February 8, 2008 made by
and between First Real Estate Investment Trust of New Jersey, a New Jersey real
estate business trust (hereinafter “FREIT”), and Damascus 100, LLC, a New Jersey
limited liability company (hereinafter “Damascus 100”).
Preliminary
Statement
WHEREAS,
Damascus Second, LLC (the “LLC”) is a Maryland limited liability company
consisting of FREIT as the Managing Member and Damascus 100, as the Limited
Member;
WHEREAS,
FREIT is the owner of 70% of the “Percentage Interests” in the LLC and Damascus
100 is the owner of 30% of the “Percentage Interests” in the LLC; the term
Percentage Interest being defined in the Operating Agreement of the LLC;
and
WHEREAS,
Damascus Centre, L.L.C. ("Centre") is the owner of a mixed use retail complex
located in Damascus, Maryland known as the “Damascus Centre” (the "Premises”);
and
WHEREAS,
the LLC is obligated to Bank of America (the “lender”) pursuant to a Promissory
Note (the "Note") in an amount up to Twenty-Seven Million Two Hundred
Ninety-Eight Thousand Dollars ($27,298,000.00) (the “loan”), the proceeds of
which are being used to reconstruct the Premises; and
WHEREAS, Centre has granted an
Indemnity Deed of Trust on the Premises to secure its Indemnity Guaranty of the
Loan in favor of the Lender; and
WHEREAS,
as a condition precedent of the granting of the Loan, the Lender required FREIT
to execute certain guarantees and indemnifications related to the Loan as
evidenced by the Note, and a certain Guaranty Agreement of even date (all of the
foregoing being, collectively referred to herein as the “Guaranty Documents”);
and
WHEREAS,
the Guaranty Documents are being executed and delivered to Lender by FREIT with
FREIT’s understanding that any loss or other costs incurred pursuant to the
terms of the Guaranty Agreement will be borne seventy (70%) by FREIT and thirty
(30%) percent by Damascus 100;
NOW
THEREFORE, the parties hereto agree as follows:
This
Agreement is executed by the undersigned in order to induce FREIT to execute and
deliver to the Lender the Guaranty Documents.
Section
2.
|
Agreement
of Indemnity.
|
(a) Damascus
100 hereby, irrevocably and unconditionally agrees to jointly and severally
defend, indemnify and hold FREIT harmless from and against any and all claims,
demands, causes of action, liabilities, losses, costs incurred by FREIT as a
result of any and all action and enforcement of the Guaranty Documents to the
extent of Damascus 100’s thirty percent (30%) share of the Percentage Interest
in the LLC.
This
Agreement shall remain in full force and effect so long as any of the parties
hereto or their successors and assigns shall be liable to Lender under the
Guaranty Documents.
Section
4.
|
Nature
of Obligations.
|
The
obligations of the Undersigned hereunder are primary obligations and such
obligations shall be absolute and unconditional irrespective of any illegality,
invalidity or unenforceability of or defect in any provision of the loan
documents prepared in connection with the Loan or of any obligations of the LLC
thereunder, the absence of any action to enforce the same, seek execution
thereof (or the lack thereof), or any other circumstance affecting the LLC
(whether or not within the control of the LLC or the Undersigned) which might
otherwise constitute a defense available to, or discharge of, the warrantor or
surety of any type. This Agreement is a continuing one and all
liabilities that apply or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.
Section
5.
|
Independence
of Obligations.
|
This
Agreement and the obligations of the Undersigned hereunder may be enforced in
full irrespective of the existence of the obligations (direct or
contingent) of the Undersigned or any other person (including, without
limitation, the LLC any other indemnitor or surety) under any other instrument
or agreement in favor of Lender, as the case may be with respect to the
obligations under the Loan or any other obligation. No payment by the
Undersigned or any other person under any other agreement shall under any
circumstance diminish, or constitute a defense to, the Undersigned obligations
hereunder until all obligations have been indefeasibly paid in
full.
Section
6.
|
Miscellaneous.
|
This
Agreement may be modified only by an instrument in writing signed by the parties
hereto.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with, and be governed by, the laws of the State of New
Jersey.
|
(c)
|
Descriptive
Headings, etc.
|
The
descriptive headings used in this Agreement are for convenience only and shall
not be deemed to affect the meaning of construction of any provision
hereof.
|
(d)
|
Benefit
of Agreement.
|
This
Agreement shall be binding upon and inure to the benefit of the Undersigned and
their respective successors, assigns, and distributes.
The
Undersigned hereby waive presentment, demand, protest or notice of any kind in
connection with this Agreement.
This
Agreement may be executed in two or more counterparts, each of which shall be an
original, but which together constitutes one and same instrument.
IN
WITNESS WHEREOF, the Undersigned has caused this Agreement to be duly executed
and executed as of the date first above written.
|
FIRST
REAL ESTATE INVESTMENT
|
|
TRUST
OF NEW JERSEY
|
|
|
|
|
By:
|
/s/ Donald
Barney
|
|
|
Donald
Barney, President
|
|
|
|
|
|
|
|
Damascus
100, LLC
|
|
|
|
|
By:
|
/s/ Robert S.
Hekemian, Jr
.
|
|
|
Robert
S. Hekemian, Jr., Managing Manager
|
Page 30
EXHIBIT
10.2
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (“the Agreement”) dated as of February 8, 2008 made by
and between First Real Estate Investment Trust of New Jersey, a New Jersey real
estate business trust (hereinafter “FREIT”), and Rotunda 100, LLC, a New Jersey
limited liability company (hereinafter “Rotunda 100”).
Preliminary
Statement
WHEREAS,
Grande Rotunda, LLC (the “LLC”) is a Maryland limited Liability Company
consisting of FREIT as the Managing Member and Rotunda 100, as the Limited
Member;
WHEREAS,
FREIT is the owner of 60% of the “Percentage Interests” in the LLC and Rotunda
100 is the owner of 40% of the “Percentage Interests” in the LLC; the term
Percentage Interest being defined in the Operating Agreement of the LLC;
and
WHEREAS,
the LLC is the owner of a mixed use retail complex located in Baltimore,
Maryland known as the “The Rotunda ” (the "Premises”); and
WHEREAS,
the LLC is obligated to Bank of America (the “lender”) pursuant to a Promissory
Note (the "Note") in an amount of Twenty Two Million Five Hundred Thousand
Dollars ($22,500,000.00) (the “loan”), the proceeds of which were used to
acquire the Premises; and
WHEREAS,
as a condition precedent of the granting of the Loan, the Lender required FREIT
to execute certain guarantees and indemnifications related to the Loan as
evidenced by the Note, and a certain Guaranty Agreement of even date (all of the
foregoing being, collectively referred to herein as the “Guaranty Documents”);
and
WHEREAS,
the Guaranty Documents have been executed and delivered to Lender by FREIT with
FREIT’s understanding that any loss or other costs incurred pursuant
to the terms of the Guaranty Agreement will be borne sixty (60%) percent by
FREIT and forty (40%) by Rotunda 100;
NOW
THEREFORE, the parties hereto agree as follows:
Section
1.
|
Agreement
of Indemnity.
|
(a) Rotunda
100 hereby, irrevocably and unconditionally agrees to jointly and severally
defend, indemnify and hold FREIT harmless from and against any and all claims,
demands, causes of action, liabilities, losses, costs incurred by FREIT as a
result of any and all action and enforcement of the Guaranty Documents to the
extent of Rotunda 100’s forty percent (40%) share of the Percentage Interest in
the LLC.
This
Agreement shall remain in full force and effect so long as any of the parties
hereto or their successors and assigns shall be liable to Lender under the
Guaranty Documents.
Section
3.
|
Nature
of Obligations.
|
The
obligations of the Undersigned hereunder are primary obligations and such
obligations shall be absolute and unconditional irrespective of any illegality,
invalidity or unenforceability of or defect in any provision of the loan
documents prepared in connection with the Loan or of any obligations of the LLC
thereunder, the absence of any action to enforce the same, seek execution
thereof (or the lack thereof), or any other circumstance affecting the LLC
(whether or not within the control of the LLC or the Undersigned) which might
otherwise constitute a defense available to, or discharge of, the warrantor or
surety of any type. This Agreement is a continuing one and all
liabilities that apply or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.
Section
4.
|
Independence
of Obligations.
|
This
Agreement and the obligations of the Undersigned hereunder may be enforced in
full irrespective of the existence of the obligations (direct or contingent) of
the Undersigned or any other person (including, without limitation, the LLC any
other indemnitor or surety) under any other instrument or agreement in favor of
Lender, as the case may be with respect to the obligations under the Loan or any
other obligation. No payment by the Undersigned or any other person
under any other agreement shall under any circumstance diminish, or constitute a
defense to, the Undersigned obligations hereunder until all obligations have
been indefeasibly paid in full.
Section
5.
|
Miscellaneous.
|
This
Agreement may be modified only by an instrument in writing signed by the parties
hereto.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with, and be governed by, the laws of the State of New
Jersey.
|
(c)
|
Descriptive
Headings, etc.
|
The
descriptive headings used in this Agreement are for convenience only and shall
not be deemed to affect the meaning of construction of any provision
hereof.
|
(d)
|
Benefit
of Agreement.
|
This
Agreement shall be binding upon and inure to the benefit of the Undersigned and
their respective successors, assigns, and distributes.
The
Undersigned hereby waive presentment, demand, protest or notice of any kind in
connection with this Agreement.
This
Agreement may be executed in two or more counterparts, each of which shall be an
original, but which together constitutes one and same instrument.
IN
WITNESS WHEREOF, the Undersigned has caused this Agreement to be duly executed
and executed as of the date first above written.
|
FIRST
REAL ESTATE INVESTMENT
|
|
TRUST
OF NEW JERSEY
|
|
|
|
|
By:
|
/s/ Donald
Barney
|
|
|
Donald
Barney, President
|
|
|
|
|
|
|
|
Rotunda
100, LLC
|
|
|
|
|
By:
|
/s/Robert S. Hekemian,
Jr.
|
|
|
Robert
S. Hekemian, Jr., Managing Manager
|
EXHIBIT
10.3.1
PROMISSORY
NOTE
$
506,000.00
|
July
19, 2005
|
Robert S. Hekemian, Jr.
,
having an address of 39 Twinbrooks Road N (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "
Maturity
Date
"), the principal sum of Five hundred and Six Thousand Dollars and no
cents
($
506,000.00
)
or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a) Interest
on this Note shall be charged at a per annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i) For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii) The
term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d) The
Borrower shall have the right to repay Loan without penalty.
(e) In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid balance on this Note,
which interest shall be due and payable to FREIT on November 1, February 1, May
1, and August 1 during the term in arrears, on the outstanding principal
balance, commencing on November 1, February 1, May 1, and August 1 during the
term of the month. Interest will be charged on all sums due to FREIT
even after a default or judgment. Each payment made to FREIT, when
paid, shall be applied first to the payment of all interest, charges and fees
accrued and unpaid, and the balance thereof to payment on account of
principal. Interest shall be calculated on the basis of a 365-day
year
and the
actual number of days elapsed. Notwithstanding anything hereinabove
to the contrary, any interest accrued from the date of the Note through October
31, 2006 shall be due and payable on November 30, 2006. Pursuant to
the Pledge and Security Agreement entered into between Borrower and FREIT, all
refinancing proceeds, distributions, and other cash flow paid to FREIT as
assignee of Borrower’s Membership Interest in Rotunda 100, LLC, shall be applied
first to accrued and unpaid interest, charges and fees, and then to any
outstanding principal.
2.
On the Maturity Date there shall be due and payable all unpaid principal
together with all accrued and unpaid interest, charges, and fees and all other
sums computed in accordance with this Note or otherwise payable pursuant to the
Loan Documents. If the Maturity Date is not a business day, this
final payment shall be due and payable on the preceding business
day.
3.
In the event any payment of interest or principal is received by FREIT
more than ten (10) days after the date due, the Borrower shall, to the extent
permitted by law, pay FREIT a late charge of five (5%) percent of the overdue
payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of default
under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT
may:
(a) declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other sums due hereunder, without
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived, anything contained herein notwithstanding;
(b) collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;
(c) sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;
(d) institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or
(e) commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.
7. The
Borrower hereby grants to FREIT, a continuing lien, security interest and right
of setoff as security for all liabilities and obligations to FREIT, whether now
existing or hereafter arising, upon and against the Borrowers Membership
Interest in Rotunda 100, LLC, and as set forth in a certain Pledge and Security
Agreement of even date herewith given by Borrower to FREIT. At any
time without demand or notice (any such notice being expressly waived by the
Borrower), FREIT may set off the same or any part thereof and apply the same to
any liability or obligation of the Borrower even though unmatured regardless of
the adequacy of any other collateral securing this Note. ANY AND ALL
RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
COLLATERAL WHICH SECURES THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
8. No
right or remedy herein conferred upon or reserved to FREIT is intended to be
exclusive of any other remedy or remedies, and each and every such remedy shall
be cumulative, and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. No delay
or omission of FREIT to exercise any right or power accruing upon any Event of
Default shall impair any such right or power, or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and every power
and remedy given by this Note may be exercised from time to time and as often as
may be deemed expedient by FREIT. Nothing in this Note contained
shall affect the obligation of the Borrower or any guarantor or endorser to pay
the principal of and interest on this Note in the manner and at the time and
place herein expressed.
9. FREIT
may, without notice to or consent of any party liable for the payment hereof as
guarantor, endorser, surety or in any capacity whatsoever, and without impairing
or affecting the liability of such party to FREIT, (a) extend the time for
payment of this Note; (b) alter any other term of this Note by agreement with
the Borrower; (c) release, settle or compromise with any other party liable for
the payment hereof; and/or (d) release, or substitute for, any collateral held
by FREIT as security for the payment of any sum owing to FREIT by any party
hereto; and any renewal and/or modification document required by FREIT and
executed by the Borrower shall be deemed consented to by all such parties
without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity
whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10. Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.
11. This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.
12. This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.
13. In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
14. In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors
=
rights or debtors
=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT
=
s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT
=
s
rights hereunder or any applicable law. In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.
15. Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.
16. This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note. This Note may not be amended or modified except by a written
instrument describing such amendment or modification executed by Borrower and
FREIT.
17. FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees
that it
shall execute or cause to be executed, such documents, including without
limitation, amendments to this Note and to any other documents, instruments and
agreements executed in connection herewith as shall be reasonably
necessary to effect the foregoing, provided same do not change the
Borrower’s rights and obligations. The loan evidence by this Note has
been made by FREIT to the Borrower as an accommodation to Borrower as and
employee of Hekemian & Co., Inc. to make an investment in Rotunda 100, LLC,
which is a limited Member of Grande Rotunda, LLC, the owner of
certain property in Baltimore, Maryland (the “Property”) in which FREIT is the
Managing Member. Notwithstanding anything else herein provided, any
monies to which Borrower is entitled as a member of Rotunda 100, LLC resulting
from a refinancing of the Property shall be first applied to the outstanding
principal balance and accrued interest, if any, to the extent
thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
/s/ Robert S.
Hekemian, Jr.
|
|
Robert
S. Hekemian, Jr.
|
|
|
/s/ Allan
Tubin
|
|
Page 39
EXHIBIT
10.3.2
PROMISSORY
NOTE
$
506,000.00
|
July
19, 2005
|
Bryan Hekemian
, having an
address of 2 Saddle Brook Drive (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "
Maturity
Date
"), the principal sum of Five hundred and Six Thousand Dollars and no
cents
($
506,000.00
)
or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a) Interest
on this Note shall be charged at a per annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i) For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii) The
term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d) The
Borrower shall have the right to repay Loan without penalty.
(e) In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid balance on
this Note, which interest shall be due and payable to FREIT on November 1,
February 1, May 1, and August 1 during the term in arrears, on the outstanding
principal balance, commencing on November 1, February 1, May 1, and August 1
during the term of the month. Interest will be charged on all sums
due to FREIT even after a default or judgment. Each payment made to
FREIT, when paid, shall be applied first to the payment of all interest, charges
and fees accrued and unpaid, and the balance thereof to payment on account of
principal. Interest shall be calculated on the basis of a 365-day
year and the actual number of days elapsed. Notwithstanding anything
hereinabove to the contrary, any
interest
accrued from the date of the Note through October 31, 2006 shall be due and
payable on November 30, 2006. Pursuant to the Pledge and Security
Agreement entered into between Borrower and FREIT, all refinancing proceeds,
distributions, and other cash flow paid to FREIT as assignee of Borrower’s
Membership Interest in Rotunda 100, LLC, shall be applied first to accrued and
unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid
principal together with all accrued and unpaid interest, charges, and fees and
all other sums computed in accordance with this Note or otherwise payable
pursuant to the Loan Documents. If the Maturity Date is not a
business day, this final payment shall be due and payable on the preceding
business day.
3.
In the event any payment of interest or principal is received
by FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of default
under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT may:
(a) declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other sums due hereunder, without
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived, anything contained herein
notwithstanding;
(b) collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;
(c) sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;
(d) institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or
(e) commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien, security interest
and right of setoff as security for all liabilities and obligations to FREIT,
whether now existing or hereafter arising, upon and against the Borrowers
Membership Interest in Rotunda 100, LLC, and as set forth in a certain Pledge
and Security Agreement of even date herewith given by Borrower to
FREIT. At any time without demand or notice (any such notice being
expressly waived by the Borrower), FREIT may set off the same or any part
thereof and apply the same to any liability or obligation of the Borrower even
though unmatured regardless of the adequacy of any other collateral securing
this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES THIS NOTE OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
8.
No right or remedy herein conferred upon or reserved to FREIT
is intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party liable for the
payment hereof as guarantor, endorser, surety or in any capacity whatsoever, and
without impairing or affecting the liability of such party to FREIT, (a) extend
the time for payment of this Note; (b) alter any other term of this Note by
agreement with the Borrower; (c) release, settle or compromise with any other
party liable for the payment hereof; and/or (d) release, or substitute for, any
collateral held by FREIT as security for the payment of any sum owing to FREIT
by any party hereto; and any renewal and/or modification document required by
FREIT and executed by the Borrower shall be deemed consented to by all such
parties without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity
whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10. Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.
11. This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.
12. This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.
13. In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
14. In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors
=
rights or debtors
=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT
=
s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT
=
s
rights hereunder or any applicable law. In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.
15. Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.
16. This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note. This Note may not be amended or modified except by a written
instrument describing such amendment or modification executed by Borrower and
FREIT.
17. FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees
that it
shall execute or cause to be executed, such documents, including without
limitation, amendments to this Note and to any other documents, instruments and
agreements executed in connection herewith as shall be reasonably
necessary to effect the foregoing, provided same do not change the
Borrower’s rights and obligations. The loan evidence by this Note has
been made by FREIT to the Borrower as an accommodation to Borrower as and
employee of Hekemian & Co., Inc. to make an investment in Rotunda 100, LLC,
which is a limited Member of Grande Rotunda, LLC, the owner of
certain property in Baltimore, Maryland (the “Property”) in which FREIT is the
Managing Member. Notwithstanding anything else herein provided, any
monies to which Borrower is entitled as a member of Rotunda 100, LLC resulting
from a refinancing of the Property shall be first applied to the outstanding
principal balance and accrued interest, if any, to the extent
thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
/s/ Bryan
Hekemian
|
|
Bryan
Hekemian
|
|
|
/s/ Allan
Tubin
|
|
Page 45
EXHIBIT
10.3.3
PROMISSORY
NOTE
$
506,000.00
|
July
19, 2005
|
David Hekemian
, having an
address of 2 Columbus Ave., Apt 19A (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "
Maturity
Date
"), the principal sum of Five hundred and Six Thousand Dollars and no
cents
($
506,000.00
)
or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a) Interest
on this Note shall be charged at a per annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i) For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii) The
term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d) The
Borrower shall have the right to repay Loan without penalty.
(e) In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid balance on
this Note, which interest shall be due and payable to FREIT on November 1,
February 1, May 1, and August 1 during the term in arrears, on the outstanding
principal balance, commencing on November 1, February 1, May 1, and August 1
during the term of the month. Interest will be charged on all sums
due to FREIT even after a default or judgment. Each payment made to
FREIT, when paid, shall be applied first to the payment of all interest, charges
and fees accrued and unpaid, and the balance
thereof
to payment on account of principal. Interest shall be calculated on
the basis of a 365-day year and the actual number of days
elapsed. Notwithstanding anything hereinabove to the contrary, any
interest accrued from the date of the Note through October 31, 2006 shall be due
and payable on November 30, 2006. Pursuant to the Pledge and Security
Agreement entered into between Borrower and FREIT, all refinancing proceeds,
distributions, and other cash flow paid to FREIT as assignee of Borrower’s
Membership Interest in Rotunda 100, LLC, shall be applied first to accrued and
unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid principal
together with all accrued and unpaid interest, charges, and fees and all other
sums computed in accordance with this Note or otherwise payable pursuant to the
Loan Documents. If the Maturity Date is not a business day, this
final payment shall be due and payable on the preceding business
day.
3.
In the event any payment of interest or principal is received by FREIT
more than ten (10) days after the date due, the Borrower shall, to the extent
permitted by law, pay FREIT a late charge of five (5%) percent of the overdue
payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of
default under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT may:
(a) declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other
sums due
hereunder, without presentment, demand, protest, or other notice of any kind,
all of which are hereby expressly waived, anything contained herein
notwithstanding;
(b) collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;
(c) sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;
(d) institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or
(e) commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien, security
interest and right of setoff as security for all liabilities and obligations to
FREIT, whether now existing or hereafter arising, upon and against the Borrowers
Membership Interest in Rotunda 100, LLC, and as set forth in a certain Pledge
and Security Agreement of even date herewith given by Borrower to
FREIT. At any time without demand or notice (any such notice being
expressly waived by the Borrower), FREIT may set off the same or any part
thereof and apply the same to any liability or obligation of the Borrower even
though unmatured regardless of the adequacy of any other collateral securing
this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES THIS NOTE OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
8.
No right or remedy herein conferred upon or reserved to FREIT
is intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party liable for the
payment hereof as guarantor, endorser, surety or in any capacity whatsoever, and
without impairing or affecting the liability of such party to FREIT, (a) extend
the time for payment of this Note; (b) alter any other term of this Note by
agreement with the Borrower; (c) release, settle or compromise with any other
party liable for the payment hereof; and/or (d) release, or substitute for, any
collateral held by FREIT as security for the payment of any sum owing to FREIT
by any party hereto; and any renewal and/or
modification
document required by FREIT and executed by the Borrower shall be deemed
consented to by all such parties without any requirement that any such party
execute any such document. The Borrower and all guarantors,
endorsers, sureties, and others liable hereunder in any capacity whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10. Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.
11. This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.
12. This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.
13. In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
14. In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors
=
rights or debtors
=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT
=
s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT
=
s
rights hereunder or any applicable law. In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.
15. Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.
16. This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note. This Note may not be
amended
or modified except by a written instrument describing such amendment or
modification executed by Borrower and FREIT.
17. FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Rotunda 100, LLC, which is a limited Member
of Grande Rotunda, LLC, the owner of certain property in Baltimore,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Rotunda 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
/s/ David
Hekemian
|
|
David
Hekemian
|
|
|
/s/ Allan
Tubin
|
|
Page 50
EXHIBIT
10.3.4
PROMISSORY
NOTE
$
69,000.00
|
July
19, 2005
|
Christopher P. Bell
, having an
address of 326 First Street (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "
Maturity
Date
"), the principal sum of Sixty Nine Thousand Dollars and no
cents
($
69,000.00
)
or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a) Interest
on this Note shall be charged at a per annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i) For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii) The
term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d) The
Borrower shall have the right to repay Loan without penalty.
(e) In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid balance on
this Note, which interest shall be due and payable to FREIT on November 1,
February 1, May 1, and August 1 during the term in arrears, on the outstanding
principal balance, commencing on November 1, February 1, May 1, and August 1
during the term of the month. Interest will be charged on all sums
due to FREIT even after a default or judgment. Each payment made to
FREIT, when paid, shall be applied first to the payment of all interest, charges
and fees accrued and unpaid, and the balance
thereof
to payment on account of principal. Interest shall be calculated on
the basis of a 365-day year and the actual number of days
elapsed. Notwithstanding anything hereinabove to the contrary, any
interest accrued from the date of the Note through October 31, 2006 shall be due
and payable on November 30, 2006. Pursuant to the Pledge and Security
Agreement entered into between Borrower and FREIT, all refinancing proceeds,
distributions, and other cash flow paid to FREIT as assignee of Borrower’s
Membership Interest in Rotunda 100, LLC, shall be applied first to accrued and
unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid principal
together with all accrued and unpaid interest, charges, and fees and all other
sums computed in accordance with this Note or otherwise payable pursuant to the
Loan Documents. If the Maturity Date is not a business day, this
final payment shall be due and payable on the preceding business
day.
3.
In the event any payment of interest or principal is received by
FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of default
under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT may:
(a) declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other
sums due
hereunder, without presentment, demand, protest, or other notice of any kind,
all of which are hereby expressly waived, anything contained herein
notwithstanding;
(b) collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;
(c) sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;
(d) institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or
(e) commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien, security interest
and right of setoff as security for all liabilities and obligations to FREIT,
whether now existing or hereafter arising, upon and against the Borrowers
Membership Interest in Rotunda 100, LLC, and as set forth in a certain Pledge
and Security Agreement of even date herewith given by Borrower to
FREIT. At any time without demand or notice (any such notice being
expressly waived by the Borrower), FREIT may set off the same or any part
thereof and apply the same to any liability or obligation of the Borrower even
though unmatured regardless of the adequacy of any other collateral securing
this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES THIS NOTE OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
8.
No right or remedy herein conferred upon or reserved to FREIT is intended
to be exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative, and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party liable for the
payment hereof as guarantor, endorser, surety or in any capacity whatsoever, and
without impairing or affecting the liability of such party to FREIT, (a) extend
the time for payment of this Note; (b) alter any other term of this Note by
agreement with the Borrower; (c) release, settle or compromise with any other
party liable for the payment hereof; and/or (d) release, or substitute for, any
collateral held by FREIT as security for the payment of any sum owing to FREIT
by any party hereto; and any renewal and/or
modification
document required by FREIT and executed by the Borrower shall be deemed
consented to by all such parties without any requirement that any such party
execute any such document. The Borrower and all guarantors,
endorsers, sureties, and others liable hereunder in any capacity whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10. Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.
11. This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.
12. This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.
13. In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
14. In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors
=
rights or debtors
=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT
=
s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT
=
s
rights hereunder or any applicable law. In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.
15. Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.
16. This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note. This Note may not be
amended
or modified except by a written instrument describing such amendment or
modification executed by Borrower and FREIT.
17. FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Rotunda 100, LLC, which is a limited Member
of Grande Rotunda, LLC, the owner of certain property in Baltimore,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Rotunda 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
/s/ Christopher P.
Bell
|
|
Christopher
P. Bell
|
|
|
/s/ Allan
Tubin
|
|
Page 56
EXHIBIT
10.3.5
PROMISSORY
NOTE
$
69,000.00
|
July
19, 2005
|
Allan Tubin
, having an address
of 142 Windsor Road (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "
Maturity
Date
"), the principal sum of Sixty Nine Thousand Dollars and no
cents
($
69,000.00
)
or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a) Interest
on this Note shall be charged at a per annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i) For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii) The
term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d) The
Borrower shall have the right to repay Loan without penalty.
(e) In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid balance on
this Note, which interest shall be due and payable to FREIT on November 1,
February 1, May 1, and August 1 during the term in arrears, on the outstanding
principal balance, commencing on November 1, February 1, May 1, and August 1
during the term of the month. Interest will be charged on all sums
due to FREIT even after a default or judgment. Each payment made to
FREIT, when paid, shall be applied first to the payment of all interest, charges
and fees accrued and unpaid, and the balance
thereof
to payment on account of principal. Interest shall be calculated on
the basis of a 365-day year and the actual number of days
elapsed. Notwithstanding anything hereinabove to the contrary, any
interest accrued from the date of the Note through October 31, 2006 shall be due
and payable on November 30, 2006. Pursuant to the Pledge and Security
Agreement entered into between Borrower and FREIT, all refinancing proceeds,
distributions, and other cash flow paid to FREIT as assignee of Borrower’s
Membership Interest in Rotunda 100, LLC, shall be applied first to accrued and
unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid
principal together with all accrued and unpaid interest, charges, and fees and
all other sums computed in accordance with this Note or otherwise payable
pursuant to the Loan Documents. If the Maturity Date is not a
business day, this final payment shall be due and payable on the preceding
business day.
3.
In the event any payment of interest or principal is received by
FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of default
under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT may:
(a) declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other
sums due
hereunder, without presentment, demand, protest, or other notice of any kind,
all of which are hereby expressly waived, anything contained herein
notwithstanding;
(b) collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;
(c) sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;
(d) institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or
(e) commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to FREIT, whether now existing or hereafter arising, upon and
against the Borrowers Membership Interest in Rotunda 100, LLC, and as set forth
in a certain Pledge and Security Agreement of even date herewith given by
Borrower to FREIT. At any time without demand or notice (any such
notice being expressly waived by the Borrower), FREIT may set off the same or
any part thereof and apply the same to any liability or obligation of the
Borrower even though unmatured regardless of the adequacy of any other
collateral securing this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES
THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY
AND IRREVOCABLY WAIVED.
8.
No right or remedy herein conferred upon or reserved to FREIT is
intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party liable for the
payment hereof as guarantor, endorser, surety or in any capacity whatsoever, and
without impairing or affecting the liability of such party to FREIT, (a) extend
the time for payment of this Note; (b) alter any other term of this Note by
agreement with the Borrower; (c) release, settle or compromise with any other
party liable for the payment hereof; and/or (d) release, or substitute for, any
collateral held by FREIT as security for the payment of any sum owing to FREIT
by any party hereto; and any renewal and/or
modification
document required by FREIT and executed by the Borrower shall be deemed
consented to by all such parties without any requirement that any such party
execute any such document. The Borrower and all guarantors,
endorsers, sureties, and others liable hereunder in any capacity whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10. Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.
11. This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.
12. This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.
13. In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.
14. In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors
=
rights or debtors
=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT
=
s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT
=
s
rights hereunder or any applicable law. In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.
15. Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.
16. This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note. This Note may not be
amended
or modified except by a written instrument describing such amendment or
modification executed by Borrower and FREIT.
17. FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Rotunda 100, LLC, which is a limited Member
of Grande Rotunda, LLC, the owner of certain property in Baltimore,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Rotunda 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
/s/ Allan
Tubin
|
|
Allan
Tubin
|
|
|
/s/ Renie
Wilman
|
|
Page 62
EXHIBIT
10.3.6
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
19
th
day of July 2005, by and between Robert S. Hekemian, Jr.,
having an address
of
39 Twinbrooks
Road N (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $506,000.00 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 60% ownership interest in Grande Rotunda,
LLC, a Maryland limited liability company pursuant to an Operating Agreement
dated July 19, 2005(the “Operating Agreement”); and
WHEREAS
, Rotunda 100, LLC a
Limited Member (the “Limited Member”) with a 40% ownership interest in Grande
Rotunda, LLC; and
WHEREAS
, Pledgor is a Member
of Rotunda 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Rotunda 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Rotunda 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either alone
or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or
accepts
substitutions for any other collateral that may serve as security for the
Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Rotunda 100, LLC’s obligations
to FREIT for any guaranty whether by way of the personal guaranty of FREIT or
through a bond a letter of credit or any other surety which FREIT is required to
make with respect to Rotunda 100, LLC, all of which are deemed to be obligations
as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this
Agreement, the Collateral and all rights arising thereunder shall be transferred
and paid over to FREIT. Prior to a Default, Pledgor may exercise any
voting rights Pledgor may have as a Member of Rotunda 100, LLC, provided any
such exercise shall not impair or diminish the Collateral or the pledge made
hereby. Additionally, FREIT may exercise any and all other rights that it has as
a secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a
“Debtor” under the terms of Article 9 of the Code in connection with FREIT’s
exercise of its remedies, to the extent such a waiver is permitted by the
Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for
the transfer of the Collateral to FREIT upon the occurrence of a Default, as
defined in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the
express prior written consent of FREIT shall constitute a default under the Note
and the Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as
FREIT may require, execute, deliver, file and record any financing statement,
specific assignment or other paper, in order to create, preserve, perfect or
validate any security interest or to enable FREIT to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes FREIT to execute and file, in
the name of the Pledgor financing statements which FREIT in its sole discretion
may deem necessary or appropriate to further perfect the security interests
provided for herein. Pledgor shall also deliver to FREIT
contemporaneously herewith, the Membership certificate or certificates, if any,
evidencing his ownership in the Rotunda 100, LLC, together with a duly executed
stock power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Robert S. Hekemian, Jr.
|
|
|
|
|
|
Robert
S. Hekemian, Jr.
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald Barney
|
|
|
By:
|
|
|
|
Donald
Barney, President
|
Page 66
EXHIBIT
10.3.7
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
19
th
day of July 2005, by and between Bryan Hekemian,
having an address
of
2 Saddle Brook
Drive (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $506,000.00 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 60% ownership interest in Grande Rotunda,
LLC, a Maryland limited liability company pursuant to an Operating Agreement
dated July 19, 2005(the “Operating Agreement”); and
WHEREAS
, Rotunda 100, LLC a
Limited Member (the “Limited Member”) with a 40% ownership interest in Grande
Rotunda, LLC; and
WHEREAS
, Pledgor is a Member
of Rotunda 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Rotunda 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Rotunda 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either
alone or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Rotunda 100, LLC’s obligations
to FREIT for any guaranty whether by way of the personal guaranty of FREIT or
through a bond a letter of credit or any other surety which FREIT is required to
make with respect to Rotunda 100, LLC, all of which are deemed to be obligations
as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this
Agreement, the Collateral and all rights arising thereunder shall be transferred
and paid over to FREIT. Prior to a Default, Pledgor may exercise any
voting rights Pledgor may have as a Member of Rotunda 100, LLC, provided any
such exercise shall not impair or diminish the Collateral or the pledge made
hereby. Additionally, FREIT may exercise any and all other rights that it has as
a secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor”
under the terms of Article 9 of the Code in connection with FREIT’s exercise of
its remedies, to the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for
the transfer of the Collateral to FREIT upon the occurrence of a Default, as
defined in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is
the address set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8. The
Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Rotunda 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Bryan Hekemian.
|
|
|
|
|
|
Bryan
Hekemian
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald Barney
|
|
|
By:
|
|
|
|
Donald
Barney, President
|
Page 70
EXHIBIT
10.3.8
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
19
th
day of July 2005, by and between David Hekemian,
having an address
of
2 Columbus Ave.,
Apt 19A (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $506,000.00 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 60% ownership interest in Grande Rotunda,
LLC, a Maryland limited liability company pursuant to an Operating Agreement
dated July 19, 2005(the “Operating Agreement”); and
WHEREAS
, Rotunda 100, LLC a
Limited Member (the “Limited Member”) with a 40% ownership interest in Grande
Rotunda, LLC; and
WHEREAS
, Pledgor is a Member
of Rotunda 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when
due of the Note, and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Rotunda 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Rotunda 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the
following events, either alone or together, shall affect FREIT's interest
in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Rotunda 100, LLC’s obligations
to FREIT for any guaranty whether by way of the personal guaranty of FREIT or
through a bond a letter of credit or any other surety which FREIT is required to
make with respect to Rotunda 100, LLC, all of which are deemed to be obligations
as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this
Agreement, the Collateral and all rights arising thereunder shall be transferred
and paid over to FREIT. Prior to a Default, Pledgor may exercise any
voting rights Pledgor may have as a Member of Rotunda 100, LLC, provided any
such exercise shall not impair or diminish the Collateral or the pledge made
hereby. Additionally, FREIT may exercise any and all other rights that it has as
a secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor”
under the terms of Article 9 of the Code in connection with FREIT’s exercise of
its remedies, to the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for
the transfer of the Collateral to FREIT upon the occurrence of a Default, as
defined in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is
the address set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without
the express prior written consent of FREIT shall constitute a default under the
Note and the Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form
as FREIT may require, execute, deliver, file and record any financing statement,
specific assignment or other paper, in order to create, preserve, perfect or
validate any security interest or to enable FREIT to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes FREIT to execute and file, in
the name of the Pledgor financing statements which FREIT in its sole discretion
may deem necessary or appropriate to further perfect the security interests
provided for herein. Pledgor shall also deliver to FREIT
contemporaneously herewith, the Membership certificate or certificates, if any,
evidencing his ownership in the Rotunda 100, LLC, together with a duly executed
stock power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10.
If any part of this Pledge and Security Agreement is deemed by
a court of law to be invalid, such other provisions as have not been declared to
be invalid shall remain in effect.
11.
This Pledge and Security Agreement shall be governed in accordance
with the laws of the State of New Jersey without regard to conflict of law
principles, and the Pledgor does hereby agree to be subject to the jurisdiction
of the Courts of the State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
David Hekemian
|
|
|
|
|
|
David
Hekemian
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald Barney
|
|
|
By:
|
|
|
|
Donald
Barney, President
|
Page 74
EXHIBIT
10.3.9
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
19
th
day of July 2005, by and between Christopher P. Bell,
having an address
of
326 First Street
(hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $69,000.00 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 60% ownership interest in Grande Rotunda,
LLC, a Maryland limited liability company pursuant to an Operating Agreement
dated July 19, 2005(the “Operating Agreement”); and
WHEREAS
, Rotunda 100, LLC a
Limited Member (the “Limited Member”) with a 40% ownership interest in Grande
Rotunda, LLC; and
WHEREAS
, Pledgor is a Member
of Rotunda 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Rotunda 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Rotunda 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either
alone or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Rotunda 100, LLC’s obligations
to FREIT for any guaranty whether by way of the personal guaranty of FREIT or
through a bond a letter of credit or any other surety which FREIT is required to
make with respect to Rotunda 100, LLC, all of which are deemed to be obligations
as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Rotunda 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the terms
of Article 9 of the Code in connection with FREIT’s exercise of its remedies, to
the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express
prior written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form
as FREIT may require, execute, deliver, file and record any financing statement,
specific assignment or other paper, in order to create, preserve, perfect or
validate any security interest or to enable FREIT to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes FREIT to execute and file, in
the name of the Pledgor financing statements which FREIT in its sole discretion
may deem necessary or appropriate to further perfect the security interests
provided for herein. Pledgor shall also deliver to FREIT
contemporaneously herewith, the Membership certificate or certificates, if any,
evidencing his ownership in the Rotunda 100, LLC, together with a duly executed
stock power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Christopher P. Bell
|
|
|
|
|
|
Christopher
P. Bell
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald Barney
|
|
|
By:
|
|
|
|
Donald
Barney, President
|
Page 78
EXHIBIT
10.3.10
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
19
th
day of July 2005, by and between Allan Tubin,
having an address
of
142 Windsor Road
(hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $69,000.00 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 60% ownership interest in Grande Rotunda,
LLC, a Maryland limited liability company pursuant to an Operating Agreement
dated July 19, 2005(the “Operating Agreement”); and
WHEREAS
, Rotunda 100, LLC a
Limited Member (the “Limited Member”) with a 40% ownership interest in Grande
Rotunda, LLC; and
WHEREAS
, Pledgor is a Member
of Rotunda 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due
of the Note, and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Rotunda 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Rotunda 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either alone or
together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Rotunda 100, LLC’s obligations
to FREIT for any guaranty whether by way of the personal guaranty of FREIT or
through a bond a letter of credit or any other surety which FREIT is required to
make with respect to Rotunda 100, LLC, all of which are deemed to be obligations
as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this
Agreement, the Collateral and all rights arising thereunder shall be transferred
and paid over to FREIT. Prior to a Default, Pledgor may exercise any
voting rights Pledgor may have as a Member of Rotunda 100, LLC, provided any
such exercise shall not impair or diminish the Collateral or the pledge made
hereby. Additionally, FREIT may exercise any and all other rights that it has as
a secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the
terms of Article 9 of the Code in connection with FREIT’s exercise of its
remedies, to the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address set
forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8. The
Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Rotunda 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the terms of this
Pledge and Security Agreement without losing such rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Renie Wilman
|
|
/s/
Allan Tubin
|
|
|
|
|
|
Allan
Tubin
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald Barney
|
|
|
By:
|
|
|
|
Donald
Barney, President
|
Page 82
EXHIBIT
10.3.11
AMENDMENT TO PROMISSORY
NOTE
-AND-
PLEDGE AND SECURITY
AGREEMENT
THIS AMENDMENT
to Promissory
Note and Pledge and Security Agreement made as of the 30 day of April, 2008, by
and between Robert S. Hekemian, Jr., (hereinafter the “Borrower” or
“Pledgor”)
and
FIRST REAL ESTATE INVESTMENT
TRUST of NEW JERSEY
, its successors and/or assigns, (hereinafter the
“FREIT” or “Pledgee”).
W
I T N E S S E T H:
WHEREAS
, Borrower borrowed the
sum of $506,000.00 from FREIT pursuant to a Promissory Note dated July 19, 2005
in the principal amount of $506,000.00 (the “Note”) and Borrower
secured the Note by entering into a Pledge and Security Agreement of even date
with the Note (the “Pledge Agreement”); and
WHEREAS
, Borrower has
requested FREIT increase the principal amount under the Note and to modify the
Pledge Agreement accordingly; and
NOW, THEREFORE,
in
consideration of the
payment of One and 00/100 Dollar ($1.00) and other good and valuable
consideration as set forth herein, the Borrower hereto agrees as
follows:
1. The
Note is hereby increased from $506,000.00 to $1,222,000.00 as of the date hereof
and in all respects the terms and conditions of the Note shall remain the same,
except for the increase in the principal amount thereof to the extent of the
amount actually advanced there under, which advances may be made from time to
time by FREIT in the same manner as if Borrower had executed a new or
replacement to include the amount advanced pursuant to this Amendment
Agreement. Interest shall be payable in accordance with the Note on
the unpaid principal balance.
2. The
Pledge Agreement is hereby amended to provide that all references therein to the
Note shall be deemed to be amended hereby as well as any and all future
modifications of the Note and any increases therein. Except as set
forth herein, the terms and conditions of the Pledge Agreement shall remain in
full force and effect.
IN WITNESS
WHEREOF,
the parties have
executed this Amendment Agreement as of the day and year first above
written.
WITNESS:
|
|
BORROWER
/ PLEDGOR:
|
|
|
|
|
|
|
/s/
Carolyn Jacob
|
|
/s/
Robert
S. Hekemian, Jr.
|
|
|
Borrower
or Pledgor
|
|
|
|
|
|
|
|
|
Robert S. Hekemian,
Jr.
|
|
|
Printed
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
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/s/ Carolyn
Jacob
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By:
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/s/ Donald
Barney
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Page 84
EXHIBIT
10.3.12
AMENDMENT TO PROMISSORY
NOTE
-AND-
PLEDGE AND SECURITY
AGREEMENT
THIS AMENDMENT
to Promissory
Note and Pledge and Security Agreement made as of the 30 day of April, 2008, by
and between Bryan Hekemian, (hereinafter the “Borrower” or “Pledgor”)
and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H:
WHEREAS
, Borrower borrowed the
sum of $506,000.00 from FREIT pursuant to a Promissory Note dated July 19, 2005
in the principal amount of $506,000.00 (the “Note”) and Borrower
secured the Note by entering into a Pledge and Security Agreement of even date
with the Note (the “Pledge Agreement”); and
WHEREAS
, Borrower has
requested FREIT increase the principal amount under the Note and to modify the
Pledge Agreement accordingly; and
NOW, THEREFORE,
in
consideration of the
payment of One and 00/100 Dollar ($1.00) and other good and valuable
consideration as set forth herein, the Borrower hereto agrees as
follows:
1. The
Note is hereby increased from $506,000.00 to $1,222,000.00 as of the date hereof
and in all respects the terms and conditions of the Note shall remain the same,
except for the increase in the principal amount thereof to the extent of the
amount actually advanced there under, which advances may be made from time to
time by FREIT in the same manner as if Borrower had executed a new or
replacement to include the amount advanced pursuant to this Amendment
Agreement. Interest shall be payable in accordance with the Note on
the unpaid principal balance.
2. The
Pledge Agreement is hereby amended to provide that all references therein to the
Note shall be deemed to be amended hereby as well as any and all future
modifications of the Note and any increases therein. Except as set
forth herein, the terms and conditions of the Pledge Agreement shall remain in
full force and effect.
IN WITNESS
WHEREOF,
the parties have
executed this Amendment Agreement as of the day and year first above
written.
WITNESS:
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BORROWER
/ PLEDGOR:
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/s/ Carolyn
Jacob
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/s/
Bryan
Hekemian
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Borrower
or Pledgor
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Bryan
Hekemian
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Printed
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FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
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/s/ Carolyn
Jacob
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By:
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/s/ Donald
Barney
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Donald Barney,
President
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Page 86
EXHIBIT
10.3.13
AMENDMENT TO PROMISSORY
NOTE
-AND-
PLEDGE AND SECURITY
AGREEMENT
THIS AMENDMENT
to Promissory
Note and Pledge and Security Agreement made as of the 30 day of April, 2008, by
and between David Hekemian, (hereinafter the “Borrower” or “Pledgor”)
and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H:
WHEREAS
, Borrower borrowed the
sum of $506,000.00 from FREIT pursuant to a Promissory Note dated July 19, 2005
in the principal amount of $506,000.00 (the “Note”) and Borrower
secured the Note by entering into a Pledge and Security Agreement of even date
with the Note (the “Pledge Agreement”); and
WHEREAS
, Borrower has
requested FREIT increase the principal amount under the Note and to modify the
Pledge Agreement accordingly; and
NOW, THEREFORE,
in
consideration of the
payment of One and 00/100 Dollar ($1.00) and other good and valuable
consideration as set forth herein, the Borrower hereto agrees as
follows:
1. The
Note is hereby increased from $506,000.00 to $1,222,000.00 as of the date hereof
and in all respects the terms and conditions of the Note shall remain the same,
except for the increase in the principal amount thereof to the extent of the
amount actually advanced there under, which advances may be made from time to
time by FREIT in the same manner as if Borrower had executed a new or
replacement to include the amount advanced pursuant to this Amendment
Agreement. Interest shall be payable in accordance with the Note on
the unpaid principal balance.
2. The
Pledge Agreement is hereby amended to provide that all references therein to the
Note shall be deemed to be amended hereby as well as any and all future
modifications of the Note and any increases therein. Except as set
forth herein, the terms and conditions of the Pledge Agreement shall remain in
full force and effect.
IN WITNESS
WHEREOF,
the parties have
executed this Amendment Agreement as of the day and year first above
written.
WITNESS:
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BORROWER
/ PLEDGOR:
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/s/ Carolyn
Jacob
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/s/
David
Hekemian
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Borrower
or Pledgor
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David
Hekemian
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Printed
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FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
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/s/ Carolyn
Jacob
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By:
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/s/ Donald
Barney
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Donald
Barney, President
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Page 88
EXHIBIT
10.3.14
AMENDMENT TO PROMISSORY
NOTE
-AND-
PLEDGE AND SECURITY
AGREEMENT
THIS AMENDMENT
to Promissory
Note and Pledge and Security Agreement made as of the 30 day of April, 2008, by
and between Allan Tubin, (hereinafter the “Borrower” or “Pledgor”)
and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H:
WHEREAS
, Borrower borrowed the
sum of $69,000.00 from FREIT pursuant to a Promissory Note dated July 19, 2005
in the principal amount of $69,000.00 (the “Note”) and Borrower
secured the Note by entering into a Pledge and Security Agreement of even date
with the Note (the “Pledge Agreement”); and
WHEREAS
, Borrower has
requested FREIT increase the principal amount under the Note and to modify the
Pledge Agreement accordingly; and
NOW, THEREFORE,
in
consideration of the
payment of One and 00/100 Dollar ($1.00) and other good and valuable
consideration as set forth herein, the Borrower hereto agrees as
follows:
1. The
Note is hereby increased from $69,000.00 to $167,000.00 as of the date hereof
and in all respects the terms and conditions of the Note shall remain the same,
except for the increase in the principal amount thereof to the extent of the
amount actually advanced there under, which advances may be made from time to
time by FREIT in the same manner as if Borrower had executed a new or
replacement to include the amount advanced pursuant to this Amendment
Agreement. Interest shall be payable in accordance with the Note on
the unpaid principal balance.
2. The
Pledge Agreement is hereby amended to provide that all references therein to the
Note shall be deemed to be amended hereby as well as any and all future
modifications of the Note and any increases therein. Except as set
forth herein, the terms and conditions of the Pledge Agreement shall remain in
full force and effect.
IN WITNESS
WHEREOF,
the parties have
executed this Amendment Agreement as of the day and year first above
written.
WITNESS:
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BORROWER
/ PLEDGOR:
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/s/ Carolyn
Jacob
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/s/
Allan
Tubin
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Borrower
or Pledgor
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Allan
Tubin
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Printed
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FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
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/s/ Carolyn
Jacob
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By:
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/s/ Donald
Barney
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Donald
Barney, President
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Page 90
EXHIBIT
10.3.15
AMENDMENT TO PROMISSORY
NOTE
-AND-
PLEDGE AND SECURITY
AGREEMENT
THIS AMENDMENT
to Promissory
Note and Pledge and Security Agreement made as of the 30 day of April, 2008, by
and between Christopher Bell, (hereinafter the “Borrower” or “Pledgor”)
and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H:
WHEREAS
, Borrower borrowed the
sum of $69,000.00 from FREIT pursuant to a Promissory Note dated July 19, 2005
in the principal amount of $69,000.00 (the “Note”) and Borrower
secured the Note by entering into a Pledge and Security Agreement of even date
with the Note (the “Pledge Agreement”); and
WHEREAS
, Borrower has
requested FREIT increase the principal amount under the Note and to modify the
Pledge Agreement accordingly; and
NOW, THEREFORE,
in
consideration of the
payment of One and 00/100 Dollar ($1.00) and other good and valuable
consideration as set forth herein, the Borrower hereto agrees as
follows:
1. The
Note is hereby increased from $69,000.00 to $167,000.00 as of the date hereof
and in all respects the terms and conditions of the Note shall remain the same,
except for the increase in the principal amount thereof to the extent of the
amount actually advanced there under, which advances may be made from time to
time by FREIT in the same manner as if Borrower had executed a new or
replacement to include the amount advanced pursuant to this Amendment
Agreement. Interest shall be payable in accordance with the Note on
the unpaid principal balance.
2. The
Pledge Agreement is hereby amended to provide that all references therein to the
Note shall be deemed to be amended hereby as well as any and all future
modifications of the Note and any increases therein. Except as set
forth herein, the terms and conditions of the Pledge Agreement shall remain in
full force and effect.
IN WITNESS
WHEREOF,
the parties have
executed this Amendment Agreement as of the day and year first above
written.
WITNESS:
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BORROWER
/ PLEDGOR:
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/s/ Carolyn
Jacob
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/s/
Christopher
Bell
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Borrower
or Pledgor
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Christopher
Bell
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Printed
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FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
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/s/ Carolyn
Jacob
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By:
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/s/ Donald
Barney
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Donald
Barney, President
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Page 92
EXHIBIT
10.4.1
PROMISSORY
NOTE
$429,883.77
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October
31, 2006
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Robert S.
Hekemian, Jr., having an address at 39 Twinbrooks Road N (herein referred to as
the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before
September 30, 2016 (the "
Maturity
Date
"), the principal sum of Four Hundred Twenty Nine Thousand, Eight
Hundred Eighty Three Dollars and Seventy Seven Cents
($429,883.77) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a)
Interest on this Note shall be charged at a per
annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i)
For the purposes hereof, any interest period to which a
LIBOR Rate applies is referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii)
The term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d)
The Borrower shall have the right to repay Loan without
penalty.
(e)
In the event Borrower's employment by Hekemian &
Co., Inc. shall terminate for any reason, then this Note shall be repaid within
90 days of demand therefor by FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid
balance on this Note, which interest shall be due and payable to FREIT on
November 1, February 1, May 1, and August 1 during the term in arrears, on the
outstanding principal balance, commencing on November 1, February 1, May 1, and
August 1 during the term of the month. Interest will be charged on
all sums due to FREIT even after a default or judgment. Each payment
made to FREIT, when paid, shall be applied first to the payment of all interest,
charges and fees accrued and unpaid, and the balance thereof to payment on
account of principal. Interest shall be calculated on the basis of a
365-day year and the actual number of days elapsed. Notwithstanding
anything hereinabove to the contrary, the first interest payment under this note
shall be due and payable on February 1, 2007. Pursuant to the Pledge
and Security Agreement entered into between Borrower and FREIT, all refinancing
proceeds, distributions, and other cash flow paid to FREIT as assignee of
Borrower’s Membership Interest in Damascus 100, LLC, shall be applied first to
accrued and unpaid interest, charges and fees, and then to any outstanding
principal.
2. On
the Maturity Date there shall be due and payable all unpaid principal together
with all accrued and unpaid interest, charges, and fees and all other sums
computed in accordance with this Note or otherwise payable pursuant to the Loan
Documents. If the Maturity Date is not a business day, this final
payment shall be due and payable on the preceding business day.
3.
In the event any payment of interest or principal is received
by FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of default
under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
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(a)
If default shall be made in the payment of any amount payable
under this Note when and as the same shall become due and
payable.
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(b)
If an Event of Default as defined in the Pledge and
Security Agreement hereinafter defined shall
occur.
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6.
If any Event of Default shall have occurred, FREIT
may:
(a)
declare the entire unpaid principal balance, together with all accrued and
unpaid interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other sums due hereunder, without
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived, anything contained herein
notwithstanding;
(b)
collect interest on any overdue principal, interest, charges, fees
and other sums owing under this Note at the highest rate set forth in this Note
or at the Default Rate, whichever is higher;
(c)
sell all or part of any collateral given to secure this Note
at public or private sale, with such notice, if any, as may be required by law,
all such notice being hereby waived to the extent permitted by law;
(d)
institute proceedings for the complete or partial
foreclosure of any property securing the within Note; and/or
(e)
commence any other proceedings or steps to protect or enforce
its rights in any sequence determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien, security
interest and right of setoff as security for all liabilities and obligations to
FREIT, whether now existing or hereafter arising, upon and against the Borrowers
Membership Interest in Damascus 100, LLC, and as set forth in a certain Pledge
and Security Agreement of even date herewith given by Borrower to
FREIT. At any time without demand or notice (any such notice being
expressly waived by the Borrower), FREIT may set off the same or any part
thereof and apply the same to any liability or obligation of the Borrower even
though unmatured regardless of the adequacy of any other collateral securing
this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES THIS NOTE OR OTHER
PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.
8.
No right or remedy herein conferred upon or reserved to
FREIT is intended to be exclusive of any other remedy or remedies, and each and
every such remedy shall be cumulative, and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party
liable for the payment hereof as guarantor, endorser, surety or in any capacity
whatsoever, and without impairing or affecting the liability of such party to
FREIT, (a) extend the time for payment of this Note; (b) alter any other term of
this Note by agreement with the Borrower; (c) release, settle or compromise with
any other party liable for the payment hereof; and/or (d) release, or substitute
for, any collateral held by FREIT as security for the payment of any sum owing
to FREIT by any party hereto; and any renewal and/or modification document
required by FREIT and executed by the Borrower shall be deemed consented to by
all such parties without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity whatsoever hereby jointly and severally
waive presentment for payment, demand, notice of non-payment, notice of protest,
protest of this Note, and all other notice of any kind.
10.
Should the indebtedness represented by this Note or any part
hereof be collected in any proceeding, or this Note be placed in the hands of
attorneys for collection after default, the Borrower agrees to pay, in addition
to the principal and interest due and payable hereon, all costs of collecting
this Note, including reasonable attorneys' fees in addition to
expenses.
11.
This Note is binding on the Borrower, any guarantors, endorsers,
sureties, and all others liable hereon and their heirs, administrators,
executors, representatives, successors and assigns, and shall inure to the
benefit of FREIT, its successors and assigns.
12.
This Note and the rights and obligations of all parties hereto
shall be subject to and governed by the laws of the State of New Jersey and
irrespective of any conflicts of laws.
13.
In case any one or more of the provisions herein or in any
note, document, instrument, agreement or writing executed in conjunction
herewith shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Note shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or
therein.
14.
In consideration of the agreements contained herein, the
Borrower hereby waives any provisions applicable in connection with any
voluntary or involuntary insolvency, bankruptcy, reorganization, fraudulent
conveyance or similar proceeding involving the Borrower under any state or
federal law regarding creditor’s rights or debtor’s obligations imposing against
the Borrower, or otherwise providing for, an automatic stay under Section 362(a)
of the Bankruptcy Code or any other prohibition against FREIT’s commencing,
maintaining or completing any proceedings in connection with or the exercise or
enforcement of any of FREIT’s rights hereunder or any applicable
law. In furtherance thereof, the Borrower agrees that, in the event
of the imposition of any such stay or other prohibition, (a) not to contest any
motion made by FREIT for the lifting thereof or for exemption therefrom; and (b)
to cooperate with FREIT, in any manner requested by FREIT, in its efforts to
obtain relief from any such stay or other prohibition.
15.
Upon receipt of an affidavit of an officer of FREIT as to the loss,
theft, destruction or mutilation of this Note or any other loan document which
is not of public record, and, in the case of any such loss, theft, destruction
or mutilation, upon surrender and cancellation of such Note or other document,
the Borrower will issue, in lieu thereof, a replacement note or other document
in the same principal amount thereof and otherwise of like tenor.
16.
This Note is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this
Note. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Note, and no party is relying on any promise, agreement or understanding not set
forth in this Note. This Note may not be amended or modified except
by a written instrument describing such amendment or modification executed by
Borrower and FREIT.
17.
FREIT shall have the unrestricted right at any time or from time to
time, and without Borrower’s or any Guarantor’s consent, to assign all or any
portion of its rights and obligations hereunder to one or more and person (each,
an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Damascus 100, LLC, which is a limited Member
of Damascus Centre, LLC, the owner of certain property in Damascus,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Damascus 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
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/s/ Robert S.
Hekemian, Jr.
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Robert
S. Hekemian, Jr.
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/s/ Allan
Tubin
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Page 98
EXHIBIT
10.4.2
PROMISSORY
NOTE
$429,883.77
|
October
31, 2006
|
Bryan
Hekemian, having an address at 2 Saddle Brook Drive (herein referred to as the
"
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before
September 30, 2016 (the "
Maturity
Date
"), the principal sum of Four Hundred Twenty Nine Thousand, Eight
Hundred Eighty Three Dollars and Seventy Seven Cents
($429,883.77) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a)
Interest on this Note shall be charged at a per annum rate (the
“
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i)
For the purposes hereof, any interest period to which a LIBOR Rate applies
is referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii)
The term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c)
LIBOR shall be adjusted each November 1,
February 1, May 1 and August 1 during the term of this Note (such day
being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d)
The Borrower shall have the right to repay Loan
without penalty.
(e)
In the event Borrower's employment by Hekemian &
Co., Inc. shall terminate for any reason, then this Note shall be repaid within
90 days of demand therefor by FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid
balance on this Note, which interest shall be due and payable to FREIT on
November 1, February 1, May 1, and August 1 during the term in arrears, on the
outstanding principal balance, commencing on November 1, February 1, May 1, and
August 1 during the term of the month. Interest will be charged on
all sums due to FREIT even after a default or judgment. Each payment
made to FREIT, when paid, shall be applied first to the payment of all interest,
charges and fees accrued and unpaid, and the balance thereof to payment on
account of principal. Interest shall be calculated on the basis of a
365-day year and the actual number of days elapsed. Notwithstanding
anything hereinabove to the contrary, the first interest payment under this note
shall be due and payable on February 1, 2007. Pursuant to the Pledge
and Security Agreement entered into between Borrower and FREIT, all refinancing
proceeds, distributions, and other cash flow paid to FREIT as assignee of
Borrower’s Membership Interest in Damascus 100, LLC, shall be applied first to
accrued and unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid principal
together with all accrued and unpaid interest, charges, and fees and all other
sums computed in accordance with this Note or otherwise payable pursuant to the
Loan Documents. If the Maturity Date is not a business day, this
final payment shall be due and payable on the preceding business
day.
3.
In the event any payment of interest or principal is
received by FREIT more than ten (10) days after the date due, the Borrower
shall, to the extent permitted by law, pay FREIT a late charge of five (5%)
percent of the overdue payment.
4.
To the extent permitted by law, upon the occurrence of an
Event of Default, as defined herein the rate of interest on the unpaid principal
balance shall, at the option of FREIT be five (5%) percent in excess
of the rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of
default under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall
occur.
|
6.
If any Event of Default shall have occurred, FREIT
may:
(a)
declare the entire unpaid principal balance,
together with all accrued and unpaid interest, charges, fees and all other sums
under this Note to be due and payable, whereupon this Note shall become
forthwith due and payable as to principal, interest, charges, fees and all other
sums due hereunder, without presentment, demand, protest, or other notice of any
kind, all of which are hereby expressly waived, anything contained herein
notwithstanding;
(b)
collect interest on any overdue principal, interest, charges,
fees and other sums owing under this Note at the highest rate set forth in this
Note or at the Default Rate, whichever is higher;
(c)
sell all or part of any collateral given to secure this Note
at public or private sale, with such notice, if any, as may be required by law,
all such notice being hereby waived to the extent permitted by law;
(d)
institute proceedings for the complete or partial foreclosure
of any property securing the within Note; and/or
(e)
commence any other proceedings or steps to protect or enforce
its rights in any sequence determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to FREIT, whether now existing or hereafter arising, upon and
against the Borrowers Membership Interest in Damascus 100, LLC, and as set forth
in a certain Pledge and Security Agreement of even date herewith given by
Borrower to FREIT. At any time without demand or notice (any such
notice being expressly waived by the Borrower), FREIT may set off the same or
any part thereof and apply the same to any liability or obligation of the
Borrower even though unmatured regardless of the adequacy of any other
collateral securing this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES
THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY
AND IRREVOCABLY WAIVED.
8.
No right or remedy herein conferred upon or
reserved to FREIT is intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative, and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. No delay or omission of FREIT to exercise any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of
any party liable for the payment hereof as guarantor, endorser, surety or in any
capacity whatsoever, and without impairing or affecting the liability of such
party to FREIT, (a) extend the time for payment of this Note; (b) alter any
other term of this Note by agreement with the Borrower; (c) release, settle or
compromise with any other party liable for the payment hereof; and/or (d)
release, or substitute for, any collateral held by FREIT as security for the
payment of any sum owing to FREIT by any party hereto; and any renewal and/or
modification document required by FREIT and executed by the Borrower shall be
deemed consented to by all such parties without any requirement that any such
party execute any such document. The Borrower and all guarantors,
endorsers, sureties, and others liable hereunder in any capacity whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.
10.
Should the indebtedness represented by this Note or any part
hereof be collected in any proceeding, or this Note be placed in the hands of
attorneys for collection after default, the Borrower agrees to pay, in addition
to the principal and interest due and payable hereon, all costs of collecting
this Note, including reasonable attorneys' fees in addition to
expenses.
11.
This Note is binding on the Borrower, any guarantors, endorsers,
sureties, and all others liable hereon and their heirs, administrators,
executors, representatives, successors and assigns, and shall inure to the
benefit of FREIT, its successors and assigns.
12.
This Note and the rights and obligations of all parties hereto
shall be subject to and governed by the laws of the State of New Jersey and
irrespective of any conflicts of laws.
13.
In case any one or more of the provisions herein or in any
note, document, instrument, agreement or writing executed in conjunction
herewith shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Note shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or
therein.
14.
In consideration of the agreements contained herein, the
Borrower hereby waives any provisions applicable in connection with any
voluntary or involuntary insolvency, bankruptcy, reorganization, fraudulent
conveyance or similar proceeding involving the Borrower under any state or
federal law regarding creditor’s rights or debtor’s obligations imposing against
the Borrower, or otherwise providing for, an automatic stay under Section 362(a)
of the Bankruptcy Code or any other prohibition against FREIT’s commencing,
maintaining or completing any proceedings in connection with or the exercise or
enforcement of any of FREIT’s rights hereunder or any applicable
law. In furtherance thereof, the Borrower agrees that, in the event
of the imposition of any such stay or other prohibition, (a) not to contest any
motion made by FREIT for the lifting thereof or for exemption therefrom; and (b)
to cooperate with FREIT, in any manner requested by FREIT, in its efforts to
obtain relief from any such stay or other prohibition.
15.
Upon receipt of an affidavit of an officer of FREIT as to the loss,
theft, destruction or mutilation of this Note or any other loan document which
is not of public record, and, in the case of any such loss, theft, destruction
or mutilation, upon surrender and cancellation of such Note or other document,
the Borrower will issue, in lieu thereof, a replacement note or other document
in the same principal amount thereof and otherwise of like
tenor.
16.
This Note is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this
Note. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Note, and no party is relying on any promise, agreement or understanding not set
forth in this Note. This Note may not be amended or modified except
by a written instrument describing such amendment or modification executed by
Borrower and FREIT.
17.
FREIT shall have the unrestricted right at any
time or from time to time, and without Borrower’s or any Guarantor’s consent, to
assign all or any portion of its rights and obligations hereunder to one or more
and person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Damascus 100, LLC, which is a limited Member
of Damascus Centre, LLC, the owner of certain property in Damascus,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Damascus 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
|
|
/s/ Bryan
Hekemian
|
|
Bryan
Hekemian
|
|
|
/s/ Allan
Tubin
|
|
Page 104
EXHIBIT
10.4.3
PROMISSORY
NOTE
$429,883.77
|
October
31, 2006
|
David
Hekemian, having an address at 2 Columbus Ave., Apt 19A (herein referred to as
the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before
September 30, 2016 (the "
Maturity
Date
"), the principal sum of Four Hundred Twenty Nine Thousand, Eight
Hundred Eighty Three Dollars and Seventy Seven Cents
($429,883.77) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a)
Interest on this Note shall be charged at a per annum
rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i)
For the purposes hereof, any interest period to
which a LIBOR Rate applies is referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii)
The term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d)
The Borrower shall have the right to repay Loan without
penalty.
(e)
In the event Borrower's employment by
Hekemian & Co., Inc. shall terminate for any reason, then this Note shall be
repaid within 90 days of demand therefor by FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid
balance on this Note, which interest shall be due and payable to FREIT on
November 1, February 1, May 1, and August 1 during the term in arrears, on the
outstanding principal balance, commencing on November 1, February 1, May 1, and
August 1 during the term of the month. Interest will be charged on
all sums due to FREIT even after a default or judgment. Each payment
made to FREIT, when paid, shall be applied first to the payment of all interest,
charges and fees accrued and unpaid, and the balance thereof to payment on
account of principal. Interest shall be calculated on the basis of a
365-day year and the actual number of days elapsed. Notwithstanding
anything hereinabove to the contrary, the first interest payment under this note
shall be due and payable on February 1, 2007. Pursuant to the Pledge
and Security Agreement entered into between Borrower and FREIT, all refinancing
proceeds, distributions, and other cash flow paid to FREIT as assignee of
Borrower’s Membership Interest in Damascus 100, LLC, shall be applied first to
accrued and unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid
principal together with all accrued and unpaid interest, charges, and fees and
all other sums computed in accordance with this Note or otherwise payable
pursuant to the Loan Documents. If the Maturity Date is not a
business day, this final payment shall be due and payable on the preceding
business day.
3.
In the event any payment of interest or principal is received
by FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the
occurrence of an Event of Default, as defined herein the rate of interest on the
unpaid principal balance shall, at the option of FREIT be five (5%)
percent in excess of the rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall
constitute an event of default under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT
may:
(a)
declare the entire unpaid principal balance, together with all
accrued and unpaid interest, charges, fees and all other sums under this Note to
be due and payable, whereupon this Note shall become forthwith due and payable
as to principal, interest, charges, fees and all other sums due hereunder,
without presentment, demand, protest, or other notice of any kind, all of which
are hereby expressly waived, anything contained herein
notwithstanding;
(b)
collect interest on any overdue principal, interest,
charges, fees and other sums owing under this Note at the highest rate set forth
in this Note or at the Default Rate, whichever is higher;
(c)
sell all or part of any collateral given to secure this
Note at public or private sale, with such notice, if any, as may be required by
law, all such notice being hereby waived to the extent permitted by
law;
(d)
institute proceedings for the complete or partial foreclosure
of any property securing the within Note; and/or
(e)
commence any other proceedings or steps to protect or enforce its rights
in any sequence determined by FREIT.
7. The
Borrower hereby grants to FREIT, a continuing lien, security interest and right
of setoff as security for all liabilities and obligations to FREIT, whether now
existing or hereafter arising, upon and against the Borrowers Membership
Interest in Damascus 100, LLC, and as set forth in a certain Pledge and Security
Agreement of even date herewith given by Borrower to FREIT. At any
time without demand or notice (any such notice being expressly waived by the
Borrower), FREIT may set off the same or any part thereof and apply the same to
any liability or obligation of the Borrower even though unmatured regardless of
the adequacy of any other collateral securing this Note. ANY AND ALL
RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
COLLATERAL WHICH SECURES THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
8.
No right or remedy herein conferred upon or reserved to
FREIT is intended to be exclusive of any other remedy or remedies, and each and
every such remedy shall be cumulative, and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. No delay or omission of FREIT to exercise any right or power
accruing upon any Event of Default shall impair any such right or power, or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party
liable for the payment hereof as guarantor, endorser, surety or in any capacity
whatsoever, and without impairing or affecting the liability of such party to
FREIT, (a) extend the time for payment of this Note; (b) alter any other term of
this Note by agreement with the Borrower; (c) release, settle or compromise with
any other party liable for the payment hereof; and/or (d) release, or substitute
for, any collateral held by FREIT as security for the payment of any sum owing
to FREIT by any party hereto; and any renewal and/or modification document
required by FREIT and executed by the Borrower shall be deemed consented to by
all such parties without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity whatsoever hereby jointly and severally
waive presentment for payment, demand, notice of non-payment, notice of protest,
protest of this Note, and all other notice of any kind.
10.
Should the indebtedness represented by this Note or any part hereof
be collected in any proceeding, or this Note be placed in the hands of attorneys
for collection after default, the Borrower agrees to pay, in addition to the
principal and interest due and payable hereon, all costs of collecting this
Note, including reasonable attorneys' fees in addition to expenses.
11.
This Note is binding on the Borrower, any guarantors, endorsers,
sureties, and all others liable hereon and their heirs, administrators,
executors, representatives, successors and assigns, and shall inure to the
benefit of FREIT, its successors and assigns.
12.
This Note and the rights and obligations of all parties hereto
shall be subject to and governed by the laws of the State of New Jersey and
irrespective of any conflicts of laws.
13.
In case any one or more of the provisions herein or in
any note, document, instrument, agreement or writing executed in conjunction
herewith shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Note shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or
therein.
14.
In consideration of the agreements contained herein, the
Borrower hereby waives any provisions applicable in connection with any
voluntary or involuntary insolvency, bankruptcy, reorganization, fraudulent
conveyance or similar proceeding involving the Borrower under any state or
federal law regarding creditor’s rights or debtor’s obligations imposing against
the Borrower, or otherwise providing for, an automatic stay under Section 362(a)
of the Bankruptcy Code or any other prohibition against FREIT’s commencing,
maintaining or completing any proceedings in connection with or the exercise or
enforcement of any of FREIT’s rights hereunder or any applicable
law. In furtherance thereof, the Borrower agrees that, in the event
of the imposition of any such stay or other prohibition, (a) not to contest any
motion made by FREIT for the lifting thereof or for exemption therefrom; and (b)
to cooperate with FREIT, in any manner requested by FREIT, in its efforts to
obtain relief from any such stay or other prohibition.
15.
Upon receipt of an affidavit of an officer of
FREIT as to the loss, theft, destruction or mutilation of this Note or any other
loan document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon surrender and cancellation of such Note
or other document, the Borrower will issue, in lieu thereof, a replacement note
or other document in the same principal amount thereof and otherwise of like
tenor.
16.
This Note is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this
Note. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Note, and no party is relying on any promise, agreement or understanding not set
forth in this Note. This Note may not be amended or modified except
by a written instrument describing such amendment or modification executed by
Borrower and FREIT.
17.
FREIT shall have the unrestricted right at any time or
from time to time, and without Borrower’s or any Guarantor’s consent, to assign
all or any portion of its rights and obligations hereunder to one or more and
person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Damascus 100, LLC, which is a limited Member
of Damascus Centre, LLC, the owner of certain property in Damascus,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Damascus 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
|
|
/s/ David
Hekemian
|
|
David
Hekemian
|
|
|
/s/ Allan
Tubin
|
|
EXHIBIT
10.4.4
PROMISSORY
NOTE
$80,603.21
|
October
31, 2006
|
Christopher
P. Bell, having an address at 326 First Street (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before
September 30, 2016 (the "
Maturity
Date
"), the principal sum of Eighty Thousand, Six Hundred Three Dollars
and Twenty One Cents
($80,603.21) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a)
Interest on this Note shall be charged at a per
annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i)
For the purposes hereof, any interest period to which a LIBOR
Rate applies is referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii)
The term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c) LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note (such day being referred to herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d)
The Borrower shall have the right to repay Loan without
penalty.
(e)
In the event Borrower's employment by Hekemian & Co., Inc.
shall terminate for any reason, then this Note shall be repaid within 90 days of
demand therefor by FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid
balance on this Note, which interest shall be due and payable to FREIT on
November 1, February 1, May 1, and August 1 during the term in arrears, on the
outstanding principal balance, commencing on November 1, February 1, May 1, and
August 1 during the term of the month. Interest will be charged on
all sums due to FREIT even after a default or judgment. Each payment
made to FREIT, when paid, shall be applied first to the payment of all interest,
charges and fees accrued and unpaid, and the balance thereof to payment on
account of principal. Interest shall be calculated on the basis of a
365-day year and the actual number of days elapsed. Notwithstanding
anything hereinabove to the contrary, the first interest payment under this note
shall be due and payable on February 1, 2007. Pursuant to the Pledge
and Security Agreement entered into between Borrower and FREIT, all refinancing
proceeds, distributions, and other cash flow paid to FREIT as assignee of
Borrower’s Membership Interest in Damascus 100, LLC, shall be applied first to
accrued and unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and payable all unpaid
principal together with all accrued and unpaid interest, charges, and fees and
all other sums computed in accordance with this Note or otherwise payable
pursuant to the Loan Documents. If the Maturity Date is not a
business day, this final payment shall be due and payable on the preceding
business day.
3.
In the event any payment of interest or principal is received by
FREIT more than ten (10) days after the date due, the Borrower shall, to the
extent permitted by law, pay FREIT a late charge of five (5%) percent of the
overdue payment.
4.
To the extent permitted by law, upon the occurrence of
an Event of Default, as defined herein the rate of interest on the unpaid
principal balance shall, at the option of FREIT be five (5%) percent
in excess of the rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute an event of
default under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT
may:
(a)
declare the entire unpaid principal balance, together with all
accrued and unpaid interest, charges, fees and all other sums under this Note to
be due and payable, whereupon this Note shall become forthwith due and payable
as to principal, interest, charges, fees and all other sums due hereunder,
without presentment, demand, protest, or other notice of any kind, all of which
are hereby expressly waived, anything contained herein
notwithstanding;
(b)
collect interest on any overdue principal, interest, charges, fees
and other sums owing under this Note at the highest rate set forth in this Note
or at the Default Rate, whichever is higher;
(c)
sell all or part of any collateral given to secure this Note
at public or private sale, with such notice, if any, as may be required by law,
all such notice being hereby waived to the extent permitted by law;
(d)
institute proceedings for the complete or partial
foreclosure of any property securing the within Note; and/or
(e)
commence any other proceedings or steps to protect or enforce
its rights in any sequence determined by FREIT.
7.
The Borrower hereby grants to FREIT, a continuing
lien, security interest and right of setoff as security for all liabilities and
obligations to FREIT, whether now existing or hereafter arising, upon and
against the Borrowers Membership Interest in Damascus 100, LLC, and as set forth
in a certain Pledge and Security Agreement of even date herewith given by
Borrower to FREIT. At any time without demand or notice (any such
notice being expressly waived by the Borrower), FREIT may set off the same or
any part thereof and apply the same to any liability or obligation of the
Borrower even though unmatured regardless of the adequacy of any other
collateral securing this Note. ANY AND ALL RIGHTS TO REQUIRE FREIT TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES
THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY
AND IRREVOCABLY WAIVED.
8.
No right or remedy herein conferred upon or
reserved to FREIT is intended to be exclusive of any other remedy or remedies,
and each and every such remedy shall be cumulative, and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. No delay or omission of FREIT to exercise any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and every power and remedy given by this Note may be
exercised from time to time and as often as may be deemed expedient by
FREIT. Nothing in this Note contained shall affect the obligation of
the Borrower or any guarantor or endorser to pay the principal of and interest
on this Note in the manner and at the time and place herein
expressed.
9.
FREIT may, without notice to or consent of any party
liable for the payment hereof as guarantor, endorser, surety or in any capacity
whatsoever, and without impairing or affecting the liability of such party to
FREIT, (a) extend the time for payment of this Note; (b) alter any other term of
this Note by agreement with the Borrower; (c) release, settle or compromise with
any other party liable for the payment hereof; and/or (d) release, or substitute
for, any collateral held by FREIT as security for the payment of any sum owing
to FREIT by any party hereto; and any renewal and/or modification document
required by FREIT and executed by the Borrower shall be deemed consented to by
all such parties without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity whatsoever hereby jointly and severally
waive presentment for payment, demand, notice of non-payment, notice of protest,
protest of this Note, and all other notice of any kind.
10.
Should the indebtedness represented by this Note or any part
hereof be collected in any proceeding, or this Note be placed in the hands of
attorneys for collection after default, the Borrower agrees to pay, in addition
to the principal and interest due and payable hereon, all costs of collecting
this Note, including reasonable attorneys' fees in addition to
expenses.
11.
This Note is binding on the Borrower, any guarantors,
endorsers, sureties, and all others liable hereon and their heirs,
administrators, executors, representatives, successors and assigns, and shall
inure to the benefit of FREIT, its successors and assigns.
12.
This Note and the rights and obligations of all parties hereto
shall be subject to and governed by the laws of the State of New Jersey and
irrespective of any conflicts of laws.
13.
In case any one or more of the provisions herein or in
any note, document, instrument, agreement or writing executed in conjunction
herewith shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Note shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or
therein.
14.
In consideration of the agreements contained herein, the
Borrower hereby waives any provisions applicable in connection with any
voluntary or involuntary insolvency, bankruptcy, reorganization, fraudulent
conveyance or similar proceeding involving the Borrower under any state or
federal law regarding creditor’s rights or debtor’s obligations imposing against
the Borrower, or otherwise providing for, an automatic stay under Section 362(a)
of the Bankruptcy Code or any other prohibition against FREIT’s commencing,
maintaining or completing any proceedings in connection with or the exercise or
enforcement of any of FREIT’s rights hereunder or any applicable
law. In furtherance thereof, the Borrower agrees that, in the event
of the imposition of any such stay or other prohibition, (a) not to contest any
motion made by FREIT for the lifting thereof or for exemption therefrom; and (b)
to cooperate with FREIT, in any manner requested by FREIT, in its efforts to
obtain relief from any such stay or other prohibition.
15.
Upon receipt of an affidavit of an officer of FREIT as to the
loss, theft, destruction or mutilation of this Note or any other loan document
which is not of public record, and, in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of such Note or other
document, the Borrower will issue, in lieu thereof, a replacement note or other
document in the same principal amount thereof and otherwise of like
tenor.
16.
This Note is intended by the parties as the
final, complete and exclusive statement of the transactions evidenced by this
Note. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Note, and no party is relying on any promise, agreement or understanding not set
forth in this Note. This Note may not be amended or modified except
by a written instrument describing such amendment or modification executed by
Borrower and FREIT.
17.
FREIT shall have the unrestricted right at any time or from time to
time, and without Borrower’s or any Guarantor’s consent, to assign all or any
portion of its rights and obligations hereunder to one or more and person (each,
an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Damascus 100, LLC, which is a limited Member
of Damascus Centre, LLC, the owner of certain property in Damascus,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Damascus 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
|
|
/s/ Christopher P.
Bell
|
|
Christopher
P. Bell
|
|
|
/s/ Allan
Tubin
|
|
Page 116
EXHIBIT
10.4.5
PROMISSORY
NOTE
$80,603.21
|
October
31, 2006
|
Allan
Tubin, having an address at 142 Windsor Road (herein referred to as the "
Borrower
"),
for value received, hereby promises to pay to the order of
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, successors and/or assigns (herein referred to as the "
FREIT
") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before
September 30, 2016 (the "
Maturity
Date
"), the principal sum of Eighty Thousand, Six Hundred Three Dollars
and Twenty One Cents
($80,603.21) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.
(a)
Interest on this Note shall be charged at a per
annum rate (the “
LIBOR
Rate
”), equal to two hundred twenty-five (225) basis points in excess of
“
LIBOR
” (as
defined below), for the corresponding “
LIBOR Interest
Period”
(being periods of three (3) months). No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note. The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.
(b) (i)
For the purposes hereof, any interest period to
which a LIBOR Rate applies is referred to as a “
LIBOR Interest
Period”
, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a
A
LIBOR
Loan.
(ii)
The term "
LIBOR
" or
“
LIBOR
Rate
” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the
Wall Street Journal
on the
business day closest to the day prior to the reset date.
(c)
LIBOR shall be adjusted each November 1, February 1, May 1 and
August 1 during the term of this Note (such day being referred to
herein as a “
Reset
Date
”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.
(d)
The Borrower shall have the right to repay Loan without
penalty.
(e)
In the event Borrower's employment by Hekemian & Co., Inc.
shall terminate for any reason, then this Note shall be repaid within 90 days of
demand therefor by FREIT.
1.
The Borrower shall pay to FREIT interest upon any unpaid
balance on this Note, which interest shall be due and payable to FREIT on
November 1, February 1, May 1, and August 1 during the term in arrears, on the
outstanding principal balance, commencing on November 1, February 1, May 1, and
August 1 during the term of the month. Interest will be charged on
all sums due to FREIT even after a default or judgment. Each payment
made to FREIT, when paid, shall be applied first to the payment of all interest,
charges and fees accrued and unpaid, and the balance thereof to payment on
account of principal. Interest shall be calculated on the basis of a
365-day year and the actual number of days elapsed. Notwithstanding
anything hereinabove to the contrary, the first interest payment under this note
shall be due and payable on February 1, 2007. Pursuant to the Pledge
and Security Agreement entered into between Borrower and FREIT, all refinancing
proceeds, distributions, and other cash flow paid to FREIT as assignee of
Borrower’s Membership Interest in Damascus 100, LLC, shall be applied first to
accrued and unpaid interest, charges and fees, and then to any outstanding
principal.
2.
On the Maturity Date there shall be due and
payable all unpaid principal together with all accrued and unpaid interest,
charges, and fees and all other sums computed in accordance with this Note or
otherwise payable pursuant to the Loan Documents. If the Maturity
Date is not a business day, this final payment shall be due and payable on the
preceding business day.
3.
In the event any payment of interest or principal is
received by FREIT more than ten (10) days after the date due, the Borrower
shall, to the extent permitted by law, pay FREIT a late charge of five (5%)
percent of the overdue payment.
4.
To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five (5%) percent in excess of the
rate of interest provided herein (the "
Default
Rate
"). The Borrower acknowledges that: (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.
5.
Any one or more of the following shall constitute
an event of default under this Note (each an “
Event of
Default
”” and collectively “
Events of
Default”
“):
|
(a)
|
If
default shall be made in the payment of any amount payable under this Note
when and as the same shall become due and
payable.
|
|
(b)
|
If
an Event of Default as defined in the Pledge and Security Agreement
hereinafter defined shall occur.
|
6.
If any Event of Default shall have occurred, FREIT
may:
(a)
declare the entire unpaid principal balance, together with all
accrued and unpaid interest, charges, fees and all other sums under this Note to
be due and payable, whereupon this Note shall become forthwith due and payable
as to principal, interest, charges, fees and all other sums due hereunder,
without presentment, demand, protest, or other notice of any kind, all of which
are hereby expressly waived, anything contained herein
notwithstanding;
(b)
collect interest on any overdue
principal, interest, charges, fees and other sums owing under this Note at the
highest rate set forth in this Note or at the Default Rate, whichever is
higher;
(c)
sell all or part of any collateral given to secure this Note
at public or private sale, with such notice, if any, as may be required by law,
all such notice being hereby waived to the extent permitted by law;
(d)
institute proceedings for the complete or partial
foreclosure of any property securing the within Note; and/or
(e)
commence any other proceedings or steps to protect or enforce its rights in any
sequence determined by FREIT.
7. The
Borrower hereby grants to FREIT, a continuing lien, security interest and right
of setoff as security for all liabilities and obligations to FREIT, whether now
existing or hereafter arising, upon and against the Borrowers Membership
Interest in Damascus 100, LLC, and as set forth in a certain Pledge and Security
Agreement of even date herewith given by Borrower to FREIT. At any
time without demand or notice (any such notice being expressly waived by the
Borrower), FREIT may set off the same or any part thereof and apply the same to
any liability or obligation of the Borrower even though unmatured regardless of
the adequacy of any other collateral securing this Note. ANY AND ALL
RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
COLLATERAL WHICH SECURES THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
8. No
right or remedy herein conferred upon or reserved to FREIT is intended to be
exclusive of any other remedy or remedies, and each and every such remedy shall
be cumulative, and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. No delay
or omission of FREIT to exercise any right or power accruing upon any Event of
Default shall impair any such right or power, or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and every power
and remedy given by this Note may be exercised from time to time and as often as
may be deemed expedient by FREIT. Nothing in this Note contained
shall affect the obligation of the Borrower or any guarantor or endorser to pay
the principal of and interest on this Note in the manner and at the time and
place herein expressed.
9. FREIT
may, without notice to or consent of any party liable for the payment hereof as
guarantor, endorser, surety or in any capacity whatsoever, and without impairing
or affecting the liability of such party to FREIT, (a) extend the time for
payment of this Note; (b) alter any other term of this Note by agreement with
the Borrower; (c) release, settle or compromise with any other party liable for
the payment hereof; and/or (d) release, or substitute for, any collateral held
by FREIT as security for the payment of any sum owing to FREIT by any party
hereto; and any renewal and/or modification document required by FREIT and
executed by the Borrower shall be deemed consented to by all such parties
without any requirement that any such party execute any such
document. The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity whatsoever hereby jointly and severally
waive presentment for payment, demand, notice of non-payment, notice of protest,
protest of this Note, and all other notice of any kind.
10.
Should the indebtedness represented by this Note or any part
hereof be collected in any proceeding, or this Note be placed in the hands of
attorneys for collection after default, the Borrower agrees to pay, in addition
to the principal and interest due and payable hereon, all costs of collecting
this Note, including reasonable attorneys' fees in addition to
expenses.
11.
This Note is binding on the Borrower, any guarantors,
endorsers, sureties, and all others liable hereon and their heirs,
administrators, executors, representatives, successors and assigns, and shall
inure to the benefit of FREIT, its successors and assigns.
12.
This Note and the rights and obligations of all parties
hereto shall be subject to and governed by the laws of the State of New Jersey
and irrespective of any conflicts of laws.
13.
In case any one or more of the provisions herein or in
any note, document, instrument, agreement or writing executed in conjunction
herewith shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Note shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein or
therein.
14.
In consideration of the agreements contained herein, the
Borrower hereby waives any provisions applicable in connection with any
voluntary or involuntary insolvency, bankruptcy, reorganization, fraudulent
conveyance or similar proceeding involving the Borrower under any state or
federal law regarding creditor’s rights or debtor’s obligations imposing against
the Borrower, or otherwise providing for, an automatic stay under Section 362(a)
of the Bankruptcy Code or any other prohibition against FREIT’s commencing,
maintaining or completing any proceedings in connection with or the exercise or
enforcement of any of FREIT’s rights hereunder or any applicable
law. In furtherance thereof, the Borrower agrees that, in the event
of the imposition of any such stay or other prohibition, (a) not to contest any
motion made by FREIT for the lifting thereof or for exemption therefrom; and (b)
to cooperate with FREIT, in any manner requested by FREIT, in its efforts to
obtain relief from any such stay or other prohibition.
15.
Upon receipt of an affidavit of an officer of FREIT as to the loss,
theft, destruction or mutilation of this Note or any other loan document which
is not of public record, and, in the case of any such loss, theft, destruction
or mutilation, upon surrender and cancellation of such Note or other document,
the Borrower will issue, in lieu thereof, a replacement note or other document
in the same principal amount thereof and otherwise of like tenor.
16.
This Note is intended by the parties as the final, complete
and exclusive statement of the transactions evidenced by this
Note. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Note, and no party is relying on any promise, agreement or understanding not set
forth in this Note. This Note may not be amended or modified except
by a written instrument describing such amendment or modification executed by
Borrower and FREIT.
17.
FREIT shall have the unrestricted right at any time or
from time to time, and without Borrower’s or any Guarantor’s consent, to assign
all or any portion of its rights and obligations hereunder to one or more and
person (each, an “
Assignee
”),
and Borrower and each Guarantor agrees that it shall execute or cause to be
executed, such documents, including without limitation, amendments to this Note
and to any other documents, instruments and agreements executed in connection
herewith as shall be reasonably necessary to effect the foregoing,
provided same do not change the Borrower’s rights and
obligations. The loan evidence by this Note has been made by FREIT to
the Borrower as an accommodation to Borrower as and employee of Hekemian &
Co., Inc. to make an investment in Damascus 100, LLC, which is a limited Member
of Damascus Centre, LLC, the owner of certain property in Damascus,
Maryland (the “Property”) in which FREIT is the Managing
Member. Notwithstanding anything else herein provided, any monies to
which Borrower is entitled as a member of Damascus 100, LLC resulting from a
refinancing of the Property shall be first applied to the outstanding principal
balance and accrued interest, if any, to the extent thereof.
THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.
[Signature
lines on next page]
IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.
WITNESS:
|
|
|
|
|
/s/ Allan
Tubin
|
|
Allan
Tubin
|
|
|
/s/ Renie
Wilman
|
|
Page 122
EXHIBIT
10.4.6
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
31
st
day of October 2006, by and between Robert S. Hekemian, Jr.,
having an address
at
39 Twinbrooks
Road N (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $429,883.77 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS
, Damascus 100, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS
, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events,
either alone or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Damascus 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a
“Debtor” under the terms of Article 9 of the Code in connection with FREIT’s
exercise of its remedies, to the extent such a waiver is permitted by the
Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Damascus 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the
terms of this Pledge and Security Agreement without losing such
rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Carolyn Jacob
|
|
/s/
Robert S. Hekemian, Jr.
|
____________________________________________
|
|
_____________________________________________________
|
|
|
Robert
S. Hekemian, Jr.
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
Donald
Barney
|
____________________________________________
|
|
By:
|
__________________________________________________
|
|
|
Donald
Barney, President
|
Page 126
EXHIBIT
10.4.7
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
31
st
day of October 2006, by and between Bryan Hekemian,
having an address
at
2 Saddle Brook
Drive (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $429,883.77 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS
, Damascus 100, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS
, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the
following events, either alone or together, shall affect FREIT's interest
in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Damascus 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the terms
of Article 9 of the Code in connection with FREIT’s exercise of its remedies, to
the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the
express prior written consent of FREIT shall constitute a default under the Note
and the Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Damascus 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the terms of
this Pledge and Security Agreement without losing such rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Bryan Hekemian
|
____________________________________________
|
|
_____________________________________________________
|
|
|
Bryan
Hekemian
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
Donald
Barney
|
____________________________________________
|
|
By:
|
__________________________________________________
|
|
|
Donald
Barney, President
|
Page 130
EXHIBIT
10.4.8
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
31
st
day of October 2006, by and between David Hekemian,
having an address
at
2 Columbus Ave.,
Apt 19A (hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $429,883.77 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS
, Damascus 100, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS
, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when
due of the Note, and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either
alone or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this
Agreement, the Collateral and all rights arising thereunder shall be transferred
and paid over to FREIT. Prior to a Default, Pledgor may exercise any
voting rights Pledgor may have as a Member of Damascus 100, LLC, provided any
such exercise shall not impair or diminish the Collateral or the pledge made
hereby. Additionally, FREIT may exercise any and all other rights that it has as
a secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the terms
of Article 9 of the Code in connection with FREIT’s exercise of its remedies, to
the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the
address set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Damascus 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the terms of
this Pledge and Security Agreement without losing such rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
David Hekemian
|
____________________________________________
|
|
_____________________________________________________
|
|
|
David
Hekemian
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald W Barney
|
____________________________________________
|
|
By:
|
__________________________________________________
|
|
|
Donald
Barney, President
|
Page 134
EXHIBIT
10.4.9
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
31
st
day of October 2006, by and between Christopher P. Bell,
having an address
at
326 First Street
(hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $80,603.21 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS
, Damascus 100, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS
, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either
alone or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Damascus 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the terms
of Article 9 of the Code in connection with FREIT’s exercise of its remedies, to
the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address set
forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express prior
written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as
FREIT may require, execute, deliver, file and record any financing statement,
specific assignment or other paper, in order to create, preserve, perfect or
validate any security interest or to enable FREIT to exercise and enforce its
rights hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, the Pledgor hereby authorizes FREIT to execute and file, in
the name of the Pledgor financing statements which FREIT in its sole discretion
may deem necessary or appropriate to further perfect the security interests
provided for herein. Pledgor shall also deliver to FREIT
contemporaneously herewith, the Membership certificate or certificates, if any,
evidencing his ownership in the Damascus 100, LLC, together with a duly executed
stock power.
9.
FREIT may delay enforcement of any of its rights pursuant to the terms of
this Pledge and Security Agreement without losing such rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
|
|
PLEDGOR:
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Christopher P. Bell
|
____________________________________________
|
|
_____________________________________________________
|
|
|
Christopher
P. Bell
|
|
|
|
|
|
|
|
|
FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
|
|
|
|
/s/
Allan Tubin
|
|
/s/
Donald W. Barney
|
____________________________________________
|
|
By:
|
__________________________________________________
|
|
|
Donald
Barney, President
|
Page 138
EXHIBIT
10.4.10
PLEDGE AND SECURITY
AGREEMENT
THIS AGREEMENT
made as of the
31
st
day of October 2006, by and between Allan Tubin,
having an address
at
142 Windsor Road
(hereinafter the “Pledgor”), and
FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY
, its successors and/or assigns, having an office located at
505 Main Street, Hackensack, New Jersey 07601 (hereinafter the “FREIT” or
“Pledgee”).
W
I T N E S S E T H :
WHEREAS
, Pledgor is indebted
to FREIT in the principal amount of $80,603.21 together with all interest
thereon, represented by a Promissory Note of even date herewith (the “Note”);
and
WHEREAS
, FREIT is the Managing
Member (the “Managing Member”) with a 70% ownership interest in Damascus Centre,
LLC, a New Jersey limited liability company pursuant to an
Operating Agreement dated June 1, 2003(the “Operating Agreement”);
and
WHEREAS
, Damascus 100, LLC a
Limited Member (the “Limited Member”) with a 30% ownership interest in Damascus
Centre, LLC; and
WHEREAS
, Pledgor is a Member
of Damascus 100, LLC; and
WHEREAS
, as a condition
precedent to making the loan evidenced by the Note and in order to secure
payment of the Obligations, as hereinafter defined, FREIT requires that the
Pledgor enter into and execute this Pledge and Security Agreement upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE,
in
consideration of the
mutual promises set forth herein and other good and valuable consideration, the
parties hereto agree as follows:
1.
As security for (i) the prompt and complete payment when due of the Note,
and for any and all liabilities that Pledgor now or in
the future may have to
FREIT pursuant to the Note, and (ii) the prompt and complete payment when due of
all obligations contained in this Agreement (the obligations described in
subparagraphs (i) and (ii) herein are referred to collectively as the
“Obligations”), the Pledgor hereby pledges, assigns, transfers and grants
to
FREIT a
security interest in all of Pledgor’s Membership Interest in the Damascus 100,
LLC, including, but not limited to, Pledgor’s and his successor’s assignee’s,
legal representative’s, heir’s and legatee’s rights to receive refinancing
proceeds, distributions and other cash flow, from Damascus 100, LLC
(collectively, the “Collateral”). The assignment hereunder is
intended to be and shall constitute an unconditional, absolute and present
assignment to FREIT of all of Pledgor’s right, title and interest in and to the
Collateral (subject to the terms and conditions hereof). FREIT agrees
that any proceeds from Collateral shall be applied first to the Obligations
outstanding and after payment in full of such Obligations outstanding under the
Note, the balance shall be paid to Pledgor.
2.
The Pledgor hereby agrees that none of the following events, either alone
or together, shall affect FREIT's interest in
the
Collateral:
(a) if
the terms of any liability which Pledgor may have to FREIT, arising out of the
Note or any one or more of the Obligations is amended or Lender otherwise
permits any renewals or substitutions of the Note or any of the Obligations;
or
(b) if
FREIT releases or accepts substitutions for any other collateral that may serve
as security for the Obligations.
Pledgor shall also be liable to FREIT
for any guarantee for Pledgor’s pro rata share of Damascus 100, LLC’s
obligations to FREIT for any guaranty whether by way of the personal guaranty of
FREIT or through a bond a letter of credit or any other surety which FREIT is
required to make with respect to Damascus 100, LLC, all of which are deemed to
be obligations as defined in this Agreement.
3.
Upon occurrence of a Default, as defined in the Note or this Agreement,
the Collateral and all rights arising thereunder shall be transferred and paid
over to FREIT. Prior to a Default, Pledgor may exercise any voting
rights Pledgor may have as a Member of Damascus 100, LLC, provided any such
exercise shall not impair or diminish the Collateral or the pledge made hereby.
Additionally, FREIT may exercise any and all other rights that it has as a
secured party pursuant to the applicable provisions of the Uniform Commercial
Code, N.J.S.A. 12A:1-101,
et seq.
(the “Code”)
and this Agreement shall constitute a security agreement in accordance with the
terms of the Code. FREIT does not have to exercise any rights, which
it may have
against
Pledgor before exercising its rights against the
Collateral. Additionally, the Pledgor agrees that if the law requires
FREIT to give notice of the sale of the Collateral or any interest therein
(which sale need not be a public sale), ten (10) days shall be sufficient
notice.
4.
The Pledgor hereby waives the right to be treated as a “Debtor” under the
terms of Article 9 of the Code in connection with FREIT’s exercise of its
remedies, to the extent such a waiver is permitted by the Code.
5.
The Pledgor hereby appoints FREIT as attorney in fact to arrange for the
transfer of the Collateral to FREIT upon the occurrence of a Default, as defined
in the Note.
6.
The Pledgor represents that Pledgor’s principal residence is the address
set forth in the first paragraph of this Agreement.
7.
Any transfer or further pledge of the Collateral without the express
prior written consent of FREIT shall constitute a default under the Note and the
Obligations.
8.
The Pledgor will, at Pledgor’s expense and in such manner and form as FREIT may
require, execute, deliver, file and record any financing statement, specific
assignment or other paper, in order to create, preserve, perfect or validate any
security interest or to enable FREIT to exercise and enforce its rights
hereunder with respect to any of the Collateral. To the extent permitted by
applicable law, the Pledgor hereby authorizes FREIT to execute and file, in the
name of the Pledgor financing statements which FREIT in its sole discretion may
deem necessary or appropriate to further perfect the security interests provided
for herein. Pledgor shall also deliver to FREIT contemporaneously
herewith, the Membership certificate or certificates, if any, evidencing his
ownership in the Damascus 100, LLC, together with a duly executed stock
power.
9.
FREIT may delay enforcement of any of its rights pursuant to the terms of
this Pledge and Security Agreement without losing such rights.
10. If
any part of this Pledge and Security Agreement is deemed by a court of law to be
invalid, such other provisions as have not been declared to be invalid shall
remain in effect.
11. This
Pledge and Security Agreement shall be governed in accordance with the laws of
the State of New Jersey without regard to conflict of law principles, and the
Pledgor does hereby agree to be subject to the jurisdiction of the Courts of the
State of New Jersey.
12. Any
terms not defined shall have the meanings ascribed to them in the
Note.
13. This
Pledge and Security Agreement may be executed in two or more counterparts, each
of which shall be deemed an original.
IN WITNESS
WHEREOF,
the parties have
executed this Agreement as of the day and year first above written.
WITNESS:
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PLEDGOR:
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/s/
Carolyn Jacob
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/s/
Allan Tubin
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____________________________________________
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_____________________________________________________
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Allan
Tubin
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FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
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/s/
Allan Tubin
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/s/
Donald W. Barney
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____________________________________________
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By:
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__________________________________________________
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Donald
Barney, President
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