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PROMISSORY NOTE
US $16,000,000.00
May 30, 2003
FOR VALUE RECEIVED, the undersigned, 239 GREENWICH ASSOCIATES
LIMITED
PARTNERSHIP, a Connecticut limited
partnership ("Borrower") having an address at
c/o Acadia Realty Trust, 1311 Mamaroneck
Avenue, White Plains, New York 10605,
promises to pay GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., a Delaware
corporation ("Lender"), or order, at 600
Steamboat Road, Greenwich, Connecticut
06830, or such other place as the holder
hereof may designate in writing, the
principal sum of SIXTEEN MILLION AND NO/100
DOLLARS (US$16,000,000.00) (the
"Principal"), with interest on the unpaid
principal balance from the date of
this Note, until paid, at the rate of five
and nineteen one-hundredths percent
(5.19%) per annum (the "Interest Rate").
This Promissory Note may be referred to
herein as the "Note," and the loan
evidenced hereby may be referred to herein as
the "Loan."
PAYMENTS
OF PRINCIPAL AND INTEREST. On July 1, 2003 and on each Payment
Date (as defined herein) thereafter through
and including June 1, 2005, Borrower
shall pay to Lender interest on the unpaid
Principal at the Interest Rate which
has accrued from the first day through the
last day of the calendar month
immediately preceding such Payment Date.
The Principal and the interest thereon
at the Interest Rate shall be due and
payable by Borrower to Lender in
consecutive monthly installments, each in
the amount of $87,758.93 (the "Monthly
Debt Service Payment Amount") beginning on
July 1, 2005 (herein "amortization
commencement date") and on each Payment
Date thereafter until the entire
indebtedness evidenced hereby is fully
paid, except that any remaining
indebtedness, if not sooner paid, shall be
due and payable on June 1, 2013 (the
"Maturity Date").
Interest on the principal sum of this Note shall be calculated on
the
basis of a 360 day year, and shall be
charged based on the actual number of days
during each month or other applicable
accrual period. Interest on this Note
shall be paid in arrears.
The undersigned shall pay the holder hereof, in advance, on the
date
hereof, interest only on the outstanding
principal balance of this Note, at the
interest rate first mentioned above, from
the date hereof through and including
the last day of the calendar month in which
this Note is executed.
The Monthly Debt Service Payment Amount due on any Payment Date
shall
first be applied to the payment of interest
accrued during the preceding accrual
period and the remainder of such Monthly
Debt Service Payment Amount shall be
applied to the reduction of the unpaid
Principal. All accrued and unpaid
interest shall be due and payable on the
Maturity Date. If the Loan is repaid on
any date other than on a Payment Date
(whether prior to or after the Maturity
Date), Borrower shall also pay interest
that would have accrued on such repaid
Principal to but not including the next
Payment Date.
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Borrower shall repay the entire outstanding principal balance of
this
Note in full on the Maturity Date, together
with interest thereon to (but
excluding) the date of repayment and any
other amounts due and owing under the
Loan Documents (as defined herein).
As used herein, the term "Payment Date" shall mean the first (1st)
day
of each calendar month or, upon Lender's
exercise of its right to change the
Payment Date in accordance with this
paragraph, the New Payment Date (in either
case, if such day is not a Business Day,
the Payment Date shall be the first
Business Day thereafter). The first Payment
Date hereunder shall be July 1,
2003. Notwithstanding the foregoing, Lender
shall have the right, to be
exercised not more than once during the
term of the Loan, to change the Payment
Date to a date other than the first day of
each month (a "New Payment Date"), on
30 days' written notice to Borrower;
provided, however, that any such change in
the Payment Date: (i) shall not modify the
amount of regularly scheduled monthly
principal and interest payments, except
that the first payment of principal and
interest payable on the New Payment Date
shall be accompanied by interest at the
interest rate herein provided for the
period from the Payment Date in the month
in which the New Payment Date first occurs
to the New Payment Date, and (ii)
shall extend the Maturity Date to the New
Payment Date occurring in the month
set forth in the definition of Maturity
Date.
SECURITY; LOAN DOCUMENTS. The indebtedness evidenced by this Note
is
secured by, among other things, that
certain Open-End Mortgage, Assignment of
Rents and Security Agreement of even date
herewith (the "Instrument"), executed
by Borrower, encumbering real property more
particularly described therein (the
"Property"), and reference is made thereto
for rights as to acceleration of the
indebtedness evidenced by this Note. This
Note, the Instrument, and all other
documents or instruments given by Borrower
or any guarantor and accepted by
Lender for purposes of evidencing,
securing, perfecting, or guaranteeing the
indebtedness evidenced by this Note may be
referred to as the "Loan Documents."
Any capitalized term used but not otherwise
defined herein shall have the
meaning ascribed thereto in the
Instrument.
DEFEASANCE.
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A. Notwithstanding anything to the contrary contained in this Note,
the
Instrument or the Loan Documents, at any
time (x) after the earlier of the 42nd
month after the date hereof or the second
(2nd) anniversary of the date that is
the "startup day," within the meaning of
Section 860G of the Internal Revenue
Code of 1986, as amended from time to time
or any successor statute (the "Code")
of a "real estate mortgage investment
conduit," within the meaning of Section
860D of the Code, that holds this Note and
(y) before the date which is ninety
(90) days prior to the Maturity Date (the
"Permitted Prepayment Date"); and
provided (unless Lender shall otherwise
consent, in its sole discretion) no
event of default has occurred and is
continuing, Borrower shall have the right
to obtain the release of the Property from
the lien of the Instrument and the
other Loan Documents (such release, the
"Defeasance") upon the satisfaction of
the following conditions precedent (all of
which conditions shall become
covenants upon occurrence of the
Defeasance):
(i) Borrower shall provide to Lender not less than 30 days'
prior
written notice specifying a Payment Date on
which the Defeasance Deposit
(hereinafter defined) is to be made (the
date so specified may be referred to as
the "Defeasance Election Date").
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(ii) Borrower shall pay to Lender on the Defeasance Election Date
all
interest accrued and unpaid on the
outstanding principal amount of this Note to
the Defeasance Election Date and the
scheduled principal amortization payment
due on such Defeasance Election Date,
together with all other amounts then due
and payable under this Note, the Instrument
and the other Loan Documents.
(iii) Borrower shall irrevocably deposit with Lender an amount of
U.S.
Government Securities (hereinafter defined)
which through the scheduled payment
of principal and interest in respect
thereof in accordance with their terms will
provide, not later than the due dates of
the payments owing hereunder, cash in
an amount sufficient, without reinvestment,
in the opinion of a nationally
recognized firm of independent certified
public accountants expressed in a
written certification thereof delivered to
Lender (the "CPA Certificate"), to
pay and discharge the Scheduled Defeasance
Payments (hereinafter defined). The
securities so deposited, together with any
interest or other increase from the
issuer of the securities earned thereon and
any replacements thereof, shall be
referred to herein as the "Defeasance
Deposit."
(iv) Borrower shall cause the following to be delivered to Lender
on or
prior to the Defeasance Election Date, all
in form and substance satisfactory to
Lender in its reasonable discretion:
(a) a security agreement, in form and substance satisfactory
to Lender, creating a first priority lien
on the Defeasance Deposit (the
"Defeasance Security Agreement");
(b) the CPA Certificate;
(c) a certificate of Borrower certifying that all requirements
for the Defeasance set forth herein have
been satisfied;
(d) an opinion of counsel for Borrower in form and substance
satisfactory to Lender to the effect that
(i) Lender has a perfected first
priority security interest in the
Defeasance Deposit, and (ii) the holder of
this Note will not recognize income, gain
or loss for United States federal
income tax purposes as a result of the
defeasance and will be subject to United
States federal income tax on the same
amounts, in the same manner and at the
same times as would have been the case if
the Defeasance had not occurred, and
(iii) any holder, trustee or custodian of
this Note which is a "real estate
mortgage investment conduit" within the
meaning of Section 860D of the Code will
not fail to maintain its status as such as
a result of the Defeasance;
(e) evidence in writing from the applicable rating agencies
for any securitization transaction of which
this Note is a part, to the effect
that the Defeasance will not result in a
downgrading, withdrawal, or
qualification of the ratings in effect
immediately prior to such Defeasance for
the then-outstanding securities issued in
connection with such securitization;
(f) evidence satisfactory to Lender that suitable arrangements
have been made to maintain the existence of
Borrower during the time thereafter
when the Note shall be outstanding; and
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(g) such other certificates, documents or instruments as
Lender may reasonably request or as may be
required by the rating agencies
referred to above.
(v) Either (i) Borrower shall deliver to Lender a certificate
stating
that at all times following the Defeasance,
Borrower shall have no interest in
any assets other than the Defeasance
Deposit, or (ii) Borrower shall satisfy all
of the requirements of Section C below.
(vi) Borrower shall pay to Lender all reasonable out-of-pocket
costs
and expenses (including, without
limitation, attorneys' fees and disbursements)
incurred or anticipated to be incurred by
Lender in connection with the
Defeasance.
B. Upon compliance with the requirements of Section A above,
Lender
shall cause the Property to be released
from the lien of the Instrument, the
obligations hereunder and under the other
Loan Documents with respect to the
Property shall no longer be applicable, the
balance of each Subaccount shall be
disbursed to Borrower and the Defeasance
Deposit shall be the sole source of
collateral securing this Note. Lender shall
apply the Defeasance Deposit and the
payments received therefrom to the payment
of all scheduled principal and
interest payments due on all successive
payment dates under this Note after the
Defeasance Election Date and the payment
d
