SPSP Corporation,
Passyunk Supermarket, Inc.,
and
Twenty Fourth Street Passyunk Partners,
L.P.,
(Borrower)
to
Cedar-South Philadelphia II, LLC
(Lender)
----------
OPEN-END MORTGAGE AND
SECURITY AGREEMENT
----------
Dated: October 24, 2003 and
made effective
As of October 31, 2003
Location: 0000-00 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx
0000 X. Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx
UPON RECORDATION RETURN TO:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
THIS INSTRUMENT SECURES THE FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL AMOUNT OF
$39,000,000.00 PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS AS DESCRIBED IN
PENNSYLVANIA ACT NO. 42 PA. C.S.A. SECTION 8143
1 - GRANTS OF SECURITY.......................................................1
1.1 PROPERTY MORTGAGED...........................................1
1.2 ASSIGNMENT OF RENTS..........................................3
1.3 SECURITY AGREEMENT...........................................3
1.4 PLEDGE OF MONIES HELD........................................3
2 - DEBT AND OBLIGATIONS SECURED.............................................4
2.1 DEBT AND OBLIGATIONS SECURED.................................4
3 - BORROWER COVENANTS.......................................................4
3.1 PAYMENT OF DEBT..............................................4
3.2 FIRE OR OTHER CASUALTY.......................................4
3.3 CONDEMNATION.................................................5
3.4 NET LEASE....................................................6
3.5 MAINTENANCE OF PROPERTY......................................7
3.6 WASTE........................................................7
3.7 COMPLIANCE WITH LAWS.........................................7
3.8 PAYMENT FOR LABOR AND MATERIALS..............................7
3.9 CHANGE OF NAME, IDENTITY OR STRUCTURE........................7
3.10 EXISTENCE....................................................8
4 - REPRESENTATIONS AND WARRANTIES...........................................8
4.1 WARRANTY OF TITLE............................................8
4.2 AUTHORITY....................................................8
4.3 LEGAL STATUS AND AUTHORITY...................................8
4.4 VALIDITY OF DOCUMENTS........................................8
4.5 LITIGATION...................................................9
4.6 NO FOREIGN PERSON............................................9
4.7 SEPARATE TAX LOT.............................................9
4.8 NET LEASE....................................................9
4.9 FINANCIAL CONDITION..........................................9
4.10 BUSINESS PURPOSES...........................................10
4.11 TAXES.......................................................10
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4.12 MAILING ADDRESS.............................................10
4.13 DISCLOSURE..................................................10
4.14 ILLEGAL ACTIVITY............................................10
5 - OBLIGATIONS AND RELIANCES...............................................10
5.1 RELATIONSHIP OF BORROWER AND LENDER.........................10
5.2 NO LENDER OBLIGATIONS.......................................10
6 - FURTHER ASSURANCES......................................................10
6.1 RECORDING OF SECURITY INSTRUMENT, ETC.......................10
6.2 FURTHER ACTS, ETC...........................................11
6.3 ESTOPPEL CERTIFICATES.......................................11
6.4 REPLACEMENT DOCUMENTS.......................................11
7 - DUE ON SALE/ENCUMBRANCE.................................................11
7.1 LENDER RELIANCE.............................................11
7.2 NO SALE/ENCUMBRANCE.........................................12
7.3 SALE/ENCUMBRANCE DEFINED....................................12
7.4 LENDER'S RIGHTS.............................................13
8 - DEFAULT.................................................................13
8.1 EVENTS OF DEFAULT...........................................13
9 - RIGHTS AND REMEDIES.....................................................13
9.1 REMEDIES....................................................13
9.2 APPLICATION OF PROCEEDS.....................................15
9.3 RIGHT TO CURE DEFAULTS......................................15
9.4 ACTIONS AND PROCEEDINGS.....................................15
9.5 RECOVERY OF SUMS REQUIRED TO BE PAID........................15
9.6 OTHER RIGHTS, ETC...........................................15
9.7 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY................16
9.8 RIGHT OF ENTRY..............................................16
9.9 DEFAULT INTEREST AND LATE CHARGES...........................16
10 - WAIVERS................................................................16
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10.1 WAIVER OF COUNTERCLAIM......................................16
10.2 MARSHALING AND OTHER MATTERS................................16
10.3 WAIVER OF NOTICE............................................17
10.4 SOLE DISCRETION OF LENDER...................................17
10.5 WAIVER OF TRIAL BY JURY.....................................17
11 - EXCULPATION............................................................17
11.1 EXCULPATION.................................................17
11.2 RESERVATION OF CERTAIN RIGHTS...............................18
11.3 BANKRUPTCY CLAIMS...........................................18
12 - NOTICES................................................................18
12.1 NOTICES.....................................................18
13 - APPLICABLE LAW.........................................................19
13.1 CHOICE OF LAW...............................................19
13.2 USURY LAWS..................................................19
13.3 PROVISIONS SUBJECT TO APPLICABLE LAW........................19
14 - COSTS..................................................................20
14.1 PERFORMANCE AT LENDER'S EXPENSE.............................20
14.2 ATTORNEY'S FEES FOR ENFORCEMENT.............................20
15 - TRANSFER OF LOAN.......................................................20
15.1 TRANSFER OF LOAN............................................20
16 - DEFINITIONS............................................................20
16.1 GENERAL DEFINITIONS.........................................20
17 - MISCELLANEOUS PROVISIONS...............................................21
17.1 NO ORAL CHANGE..............................................21
17.2 LIABILITY...................................................21
17.3 INAPPLICABLE PROVISIONS.....................................21
17.4 HEADINGS, ETC...............................................21
17.5 DUPLICATE ORIGINALS; COUNTERPARTS...........................21
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17.6 NUMBER AND GENDER...........................................21
17.7 SUBROGATION.................................................21
17.8 ENTIRE AGREEMENT............................................22
18 - STATE SPECIFIC PROVISIONS..............................................22
18.1 OPEN-END MORTGAGE...........................................22
18.2 ACTION IN EJECTMENT.........................................22
18.3 CONFLICTING PROVISIONS......................................23
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THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this "Security
Instrument") is dated October 24, 2003 and made as of the 31st day of October,
2003, by SPSP Corporation, a Pennsylvania corporation, having an office at 00
Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000 ("SPSP"), Passyunk
Supermarket, Inc., a Pennsylvania corporation, having an office at 00 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000 ("Passyunk"), and
Twenty Fourth Street Passyunk Partners, L.P., a Pennsylvania limited
partnership, having an office at 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxx 00000 ("00xx Xxxxxx"; SPSP, Passyunk and 00xx Xxxxxx are
collectively referred to herein as "Borrower") to Cedar-South Philadelphia II,
LLC, a Delaware limited liability company, having an address at 00 Xxxxx Xxxxxx
Xxxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 ("Lender").
RECITALS:
Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the principal sum of THIRTY-NINE MILLION AND
00/100 DOLLARS ($39,000,000) in lawful money of the United States of America
(the note together with all extensions, renewals, modifications, substitutions
and amendments thereof shall collectively be referred to as the "Note"), with
interest from the date thereof at the rates set forth in the Note, principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
Borrower desires to secure the payment and performance of the
Obligations (as defined in Section 2.1 hereof).
1 - GRANTS OF SECURITY
1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Lender, and grant a security interest to Lender in, the following property,
rights, interests and estates now owned, or hereafter acquired, by Borrower
(collectively, the "Property"): (a) the real property described in Exhibit A
attached hereto and made a part hereof (the "Land"); (b) all xxxxxxxxxx xxxxx,
xxxxxxx and development rights hereafter acquired by Borrower for use in
connection with the Land and the development of the Land and all additional
lands and estates therein which may, from time to time, by supplemental mortgage
or otherwise be expressly made subject to the lien of this Security Instrument;
(c) the buildings, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements now or hereafter erected
or located on the Land (the "Improvements"); (d) all easements, rights-of-way or
use, rights, strips and gores of land, streets, ways, alleys, passages, sewer
rights, water, water courses, water rights and powers, air rights and
development rights, and all estates, rights, titles, interests, privileges,
liberties, servitudes, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or pertaining to the
Land and the Improvements and the reversion and reversions, remainder and
remainders thereof and thereto, and all land lying in the bed of any street,
road or avenue, opened or proposed, in front of or adjoining the Land, to the
center line thereof and all the estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Borrower of, in and to the Land
and the Improvements and every part and
parcel thereof, with the appurtenances thereto; (e) all furnishings, machinery,
equipment, fixtures (including, but not limited to, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature whatsoever owned by Borrower, or in
which Borrower has or shall have an interest, now or hereafter located upon the
Land and the Improvements, or appurtenant thereto, and usable in connection with
the present or future operation and occupancy of the Land and the Improvements
and all building equipment, materials and supplies of any nature whatsoever
owned by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon the Land and the Improvements, or appurtenant thereto, or
usable in connection with the present or future operation and occupancy of the
Land and the Improvements (collectively, the "Personal Property"), and the
right, title and interest of Borrower in and to any of the Personal Property
which may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states where any of the
Property is located (the "Uniform Commercial Code"), superior in lien to the
lien of this Security Instrument and all proceeds and products of the above; (f)
that certain lease dated as of the date hereof, between Borrower, as landlord,
and Cedar-South Philadelphia I, LLC, as tenant (the "Net Lease Tenant"),
together with any amendments thereto (collectively, the "Net Lease") and all
right, title and interest of Borrower, its successors and assigns therein and
thereunder, including, without limitation, cash or securities deposited
thereunder to secure the performance by the Net Lease Tenant of its obligations
thereunder and all rents, additional rents, revenues (including, but not limited
to, any payment made by or on behalf of the Net Lease Tenant in connection with
the termination of the Net Lease), issues and profits (including all oil and gas
or other mineral royalties and bonuses) from the Land and the Improvements (the
"Rents"), whether paid or accruing before or after the filing by or against
Borrower of any petition for relief under 11 U.S.C. Section 101 et seq., as the
same may be amended from time to time (the "Bankruptcy Code") and all proceeds
from the sale or other disposition of the Net Lease and the right to receive and
apply the Rents to the payment of the Debt (as hereinafter defined); (g) all
rights, powers, privileges, options and other benefits of Borrower as lessor
under the Net Lease, including without limitation the immediate and continuing
right to make claim for, receive, collect and receipt for all Rents payable or
receivable under the Net Lease or pursuant thereto (and to apply the same to the
payment of the Debt (as hereinafter defined)), and to do all other things which
Borrower or any lessor is or may become entitled to do under the Net Lease; (h)
all awards or payments, including interest thereon, which may heretofore and
hereafter be made with respect to the Property, whether from the exercise of the
right of eminent domain (including but not limited to any transfer made in lieu
of or in anticipation of the exercise of the right), or for a change of grade,
or for any other injury to or decrease in the value of the Property; (i) all
proceeds of and any unearned premiums on any insurance policies covering the
Property, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for
damage to the Property; (j) all of Borrower's claims and rights to the payment
of damages arising from any rejection by Net Lease Tenant of the Net Lease under
the Bankruptcy Code; (k) all refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction; (l)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing including, without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims; (m) the right, in the name and on
behalf of Borrower, to appear in and defend any action or proceeding brought
with respect to the Property and to commence any action or proceeding to protect
the interest of
2
Lender in the Property; (n) all agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including, without
limitation, the right, upon the happening of any default hereunder, to receive
and collect any sums payable to Borrower thereunder; (o) all tradenames,
trademarks, servicemarks, logos, copyrights, goodwill, books and records and all
other general intangibles relating to or used in connection with the operation
of the Property; and (p) any and all other rights of Borrower in and to the
items set forth in Subsections (a) through (o) above.
1.2 ASSIGNMENT OF RENTS.
(a) Borrower hereby absolutely and unconditionally assigns
to Lender Borrower's right, title and interest in and to the Net Lease and the
Rents; it being intended by Borrower that this assignment constitutes a present,
absolute assignment and not an assignment for additional security only. Borrower
hereby acknowledges and agrees that any and all payments of Rent shall be paid
directly to Lender, and Lender may apply any such sums to the payment of the
Debt, first to interest and then to principal.
(b) In the event of a termination of the Net Lease, or at
the expiration of the term of the Net Lease, Borrower shall direct all space
tenants of the Property to pay all rents and additional rents directly to
Lender. In the event that Borrower shall receive any rents, notwithstanding such
direction to the space tenants, Borrower shall immediately remit, or shall cause
its agents or affiliates to immediately remit, such receipts to Lender.
1.3 SECURITY AGREEMENT. This Security Instrument is both a
real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations, a security
interest in the Property to the full extent that the Property may be subject to
the Uniform Commercial Code.
1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender
any and all monies now or hereafter held by Lender, including, without
limitation, Net Casualty Proceeds (as defined in Section 3.2) and Net
Condemnation Award (as defined in Section 3.3) (collectively, "Deposits"), as
additional security for the Obligations until expended or applied as provided in
this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property
unto and to the use and benefit of Lender, and the successors and assigns of
Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Lender the Debt at the time and in
the manner provided in
3
the Note and this Security Instrument, shall well and truly perform the Other
Obligations (as defined in Section 2.1 hereof) as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, these presents and the
estate hereby granted shall cease, terminate and be void.
2 - DEBT AND OBLIGATIONS SECURED
2.1 DEBT AND OBLIGATIONS SECURED. This Security Instrument
and the grants, assignments and transfers made in Article 1 are given for the
purpose of securing the payment of the Debt and the performance of all Other
Obligations, it being agreed the Lender shall apply any payments first to
interest and then to principal. For purposes hereof, the term "Debt" shall mean
the aggregate of the indebtedness evidenced by the Note in lawful money of the
United States of America, interest, default interest, late charges, prepayment
premiums and other sums, as provided in the Note, this Security Instrument or
the other Loan Documents (defined below), all other monies agreed or provided to
be paid by Borrower in the Note, this Security Instrument or the other Loan
Documents and all sums advanced pursuant to this Security Instrument to protect
and preserve the Property and the lien and the security interest created hereby.
For purposes hereof, the term "Other Obligations" shall mean the obligations of
Borrower (other than the obligation to repay the Debt) contained in this
Security Instrument, the Note and the other Loan Documents. For purposes hereof,
the term "Loan Documents" shall mean the Note, this Security Instrument and any
other documents or instruments which now or shall hereafter wholly or partially
secure or guarantee payment of the Note or which have otherwise been executed or
are hereafter executed by Borrower and/or any other person or entity in
connection with the loan (the "Loan") evidenced by the Note and any renewal,
extension, amendment, modification, consolidation, change of, or substitution or
replacement for, all or any part thereof. Borrower's obligations for the payment
of the Debt and the performance of the Other Obligations shall be referred to
collectively below as the "Obligations." All the covenants, conditions and
agreements contained in the Note and the other Loan Documents are hereby made a
part of this Security Instrument to the same extent and with the same force as
if fully set forth herein.
3 - BORROWER COVENANTS
Borrower covenants and agrees that:
3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time
and in the manner provided in the Note, this
Security Instrument and the other Loan Documents.
3.2 FIRE OR OTHER CASUALTY.
(a) In the event of a fire or other casualty that destroys
all or a portion of the Property, the entire proceeds of any property casualty
insurance less any actual and reasonable expenses incurred in collecting such
proceeds (the "Net Casualty Proceeds") shall be applied as follows:
(i) If there is no Recognized Leasehold Mortgage at the time
of the fire or casualty:
4
(1) First, Net Lease Tenant shall use the Net
Casualty Proceeds to restore such portion of the Property that
Net Lease Tenant shall elect to restore (it being acknowledged
that Net Lease Tenant has no obligation to restore all or any
portion of the Property pursuant to the terms of the Net Lease);
(2) Second, if Net Lease Tenant shall elect not to
restore the damage resulting from such casualty, or if Net Lease
Tenant shall not have restored the entire Property, a portion of
the remaining Net Casualty Proceeds in an amount equal to the
lesser of (A) product of (x) a fraction, the numerator of which
is the number of square feet of the Property lost by reason of
the casualty, and the denominator of which is the number of
square feet of the entire Property immediately before the
casualty, and (y) the then outstanding principal balance of the
Loan, and (B) the entire remaining Net Casualty Proceeds, shall
be delivered to Lender and applied towards the reduction in the
principal balance of the Loan; and
(3) Third, the balance of the Net Casualty Proceeds,
if any, shall be retained by Net Lease Tenant.
(b) If there is a Recognized Leasehold Mortgage at the time
of the casualty, the Net Casualty Proceeds shall be delivered to Tenant or the
Recognized Leasehold Mortgagee, as required by the Recognized Leasehold Mortgage
Documents (as defined in the Net Lease), and applied and disbursed in accordance
with the Recognized Leasehold Mortgage Documents.
(c) In the event of a fire or other casualty where the
provisions of Section 3.2(a)(i)(2) shall apply, from and after the date of
reduction of the principal balance of the Loan in accordance with the terms of
said Section 3.2(a)(i)(2), the amount set forth in clause (i) of the definition
of Constant Monthly Payment (as defined in the Note) shall be recalculated to
equal one-twelfth (1/12) of the product of such reduced principal balance and
the Applicable Interest Rate (as defined in the Note).
3.3 CONDEMNATION.
(a) Borrower shall promptly give Lender notice of the actual
or threatened commencement of any condemnation or eminent domain proceeding and
shall deliver to Lender copies of any and all papers served in connection with
such proceedings. Lender may participate in any such proceedings, and Borrower
shall from time to time deliver to Lender all instruments requested by it to
permit such participation. Borrower shall, or shall cause Net Lease Tenant, to
prosecute any such proceedings, subject to the terms of the Net Lease.
(b) If there is no Recognized Leasehold Mortgage at the time
of the taking, the following provisions shall apply:
(i) In the event of a taking of all or substantially all of
the Property, a portion of the awards payable in connection with such
taking, less any actual and reasonable expenses incurred in collecting
such award (the "Net Condemnation Award") in an amount equal to the
lesser of (x) the amount of the Debt then outstanding, and (y) the
entire Net Condemnation Award, shall be delivered to Lender and applied
towards the
5
repayment of the Debt. Any Net Condemnation Award in excess of the
amount of the Debt then outstanding shall be retained by Net Lease
Tenant.
(ii) In the event of a taking of less than all or
substantially all of the Property, the Net Condemnation Award shall be
applied as follows:
(1) First, Net Lease Tenant shall use the Net
Condemnation Award to restore such portion of the Property that
Net Lease Tenant shall elect to restore (it being acknowledged
that Net Lease Tenant has no obligation to restore all or any
portion of the Property pursuant to the terms of the Net Lease);
(2) Second, a portion of the remaining Net Condemnation
Award in an amount equal to the lesser of (A) the product of (x)
a fraction, the numerator of which is the number of square feet
of the Property taken, and the denominator of which is the
number of square feet of the entire Property immediately before
the taking, and (y) the then outstanding principal balance of
the Loan, and (B) the remaining Net Condemnation Award shall be
delivered to Lender and applied towards the reduction in the
principal balance of the Loan; and
(3) Third, the balance of the Net Condemnation Award, if
any, shall be retained by Net Lease Tenant.
(iii) In the event of a temporary taking, the enter Net
Condemnation Award shall be retained by Net Lease Tenant.
(iv) In the event of a taking where the provisions of Section
3.3(c)(i)(2) shall apply, from and after the date of reduction of the
principal balance of the Loan in accordance with the terms of said
Section 33(c)(i)(2), the amount set forth in clause (i) of the
definition of the Constant Monthly Payment shall be recalculated to
equal one-twelfth (1/12) of the product of such reduced principal
balance and the Applicable Interest Rate.
(c) If there is a Recognized Leasehold Mortgage at the time
of the taking, the Net Condemnation Award shall be delivered to Tenant or the
Recognized Leasehold Mortgagee, as required by the Recognized Leasehold Mortgage
Documents, and applied and disbursed in accordance with the Recognized Leasehold
Mortgage Documents.
3.4 NET LEASE.
(a) Borrower shall promptly and fully keep, observe and
perform, or cause to be kept, observed or performed, all of the terms,
covenants, provisions and agreements imposed upon or assumed by Borrower under
the Net Lease and any amendments, modifications or supplements thereof, and
Borrower shall not do or fail to do, or permit or fail to permit to be done any
act or thing, the doing or omission of which will (i) give Net Lease Tenant a
right to terminate the Net Lease or to xxxxx the rental or other material
payment due thereunder, except as expressly permitted under the terms of the Net
Lease, (ii) release any party from liability under or with respect to the Net
Lease or (iii) otherwise impair the Net Lease as security for the Obligations.
Borrower shall not under any circumstances modify, cancel, amend or terminate
the Net Lease without Lender's prior written consent, and any attempted
modification, cancellation,
6
amendment or termination of the Net Lease without such consent shall be void and
of no force or effect whatsoever.
(b) Borrower shall enforce all of the terms, covenants and
conditions contained in the Net Lease upon the part of Net Lease Tenant to be
observed or performed, short of termination thereof, provided, that,
notwithstanding anything contained herein to the contrary, Borrower shall not
pursue any remedies which could affect any payment due from the Net Lease
Tenant, or which could otherwise adversely affect (A) the rights or claims of
Borrower or Lender under the Net Lease, (B) the value of the Property or (C) the
rights or interests of Lender under the Loan Documents.
(c) Borrower shall promptly deliver to Lender a copy of any
notice relating to defaults received from or given to Net Lease Tenant or any
other person or entity liable for the performance of Net Lease Tenant's
obligations under the Net Lease.
(d) Borrower shall not enter into any lease for all or any
portion of the Property, other than the Net Lease, without Lender's prior
written consent. The provisions of that certain Assignment of Leases and Rents
of even date herewith made by Borrower, as assignor, to Lender, as assignee and
this Section 3.4 shall apply to any such Lease as if such Lease were the Net
Lease designated hereunder.
3.5 MAINTENANCE OF PROPERTY. Except to the extent Net Lease
Tenant has a right to do so without Borrower's consent, the Improvements and the
Personal Property shall not be removed, demolished or materially altered (except
for normal replacement of the Personal Property and tenant improvements made in
connection with a Lease which has been entered into by Borrower in accordance
with the terms hereof) without the consent of Lender.
3.6 WASTE. Borrower shall not commit any waste of the
Property or, subject to the terms of the Net Lease, make any change in the use
of the Property which will in any way materially increase the risk of fire or
other hazard arising out of the operation of the Property, or take any action
that might invalidate or give cause for cancellation of any insurance policy, or
do or permit to be done thereon anything that may in any way materially impair
the value of the Property or the security of this Security Instrument.
3.7 COMPLIANCE WITH LAWS. Borrower shall give prompt notice
to Lender of the receipt by Borrower of any notice related to a violation of any
Applicable Laws and of the commencement of any proceedings or investigations
which relate to compliance with Applicable Laws. Borrower will not engage in or
knowingly permit any illegal activities at the Property.
3.8 PAYMENT FOR LABOR AND MATERIALS. Borrower will never
create in respect of the Property or any part thereof any other or additional
lien or security interest other than the liens or security interests hereof,
except for the Permitted Exceptions (defined below).
3.9 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower will not
change Borrower's name, identity (including its trade name or names) or, if not
an individual,
7
Borrower's corporate, limited liability company, partnership or other structure
without notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender. Borrower will execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Lender to establish or
maintain the validity, perfection and priority of the security interest granted
herein. At the request of Lender, Borrower shall execute a certificate in form
satisfactory to Lender listing the trade names under which Borrower intends to
operate the Property, and representing and warranting that Borrower does
business under no other trade name with respect to the Property.
3.10 EXISTENCE. Borrower will continuously maintain its
existence and its rights to do business in the state where the Property is
located together with its franchises and trade names.
4 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
4.1 WARRANTY OF TITLE. Borrower has paid for and has good
title to the Property and has the right to mortgage, grant, bargain, sell,
pledge, assign, warrant, set over, transfer and convey the same and that
Borrower possesses an unencumbered fee simple absolute estate in the Land and
the Improvements and that it owns the Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Security Instrument (the
"Permitted Exceptions"). Borrower shall warrant, defend and preserve the title
and the validity and priority of the lien of this Security Instrument and shall
warrant and defend the same to Lender against the claims of all persons
whomsoever.
4.2 AUTHORITY. Borrower (and the undersigned representative
of Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, set over, transfer and convey the Property pursuant to the terms hereof
and to keep and observe all of the terms of this Security Instrument on
Borrower's part to be performed.
4.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority to operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be performed by
Borrower under the Note, this Security Instrument and the other Loan Documents.
4.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery and
performance of the Note, this Security Instrument and the other Loan Documents
and the
8
borrowing evidenced by the Note (i) are within the corporate, partnership, trust
or limited liability company (as the case may be) power of Borrower; (ii) have
been authorized by all requisite corporate, partnership, trust or limited
liability company (as the case may be) action; (iii) have received all necessary
approvals and consents, corporate, governmental or otherwise; (iv) will not
violate, conflict with, result in a breach of or constitute (with notice or
lapse of time, or both) a default under any provision of law, any order or
judgment of any court or governmental authority, the articles of incorporation,
by-laws, partnership, trust, operating agreement or other governing instrument
of Borrower, or any indenture, agreement or other instrument to which Borrower
is a party or by which it or any of its assets or the Property is or may be
bound or affected; (v) will not result in the creation or imposition of any
lien, charge or encumbrance whatsoever upon any of its assets, except the lien
and security interest created hereby; and (vi) will not require any
authorization or license from, or any filing with, any governmental or other
body (except for the recordation of this instrument in appropriate land records
in the State where the Property is located and except for Uniform Commercial
Code filings relating to the security interest created hereby); and (b) the
Note, this Security Instrument and the other Loan Documents constitute the
legal, valid and binding obligations of Borrower.
4.5 LITIGATION. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of Borrower's knowledge, threatened or
contemplated against, or affecting, Borrower or the Property that has not been
disclosed to Lender or is not adequately covered by insurance.
4.6 NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
4.7 SEPARATE TAX LOT. The Property is assessed for real
estate tax purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvements are assessed and taxed together with the
Property or any portion thereof.
4.8 NET LEASE. (a) Borrower is the sole owner of the entire
lessor's interest in the Net Lease; (b) to Borrower's knowledge, the Net Lease
is valid and enforceable; (c) the terms of all alterations, modifications and
amendments to the Net Lease are reflected in the definition of Net Lease
contained herein; (d) none of the Rents reserved in the Net Lease have been
assigned or otherwise pledged or hypothecated; (e) none of the Rents have been
collected for more than one (1) month in advance, other than the payment due on
the Commencement Date (as defined in the Net Lease); (f) the premises demised
under the Net Lease have been completed and the tenant under the Net Lease has
accepted the same and has taken possession of the same on a rent-paying basis;
(g) there exist no offsets or defenses to the payment of any portion of the
Rents; and (h) no default exists, or with the passing of time or the giving of
notice or both would exist under the Net Lease which could have a material
adverse effect on the Borrower or the Property.
4.9 FINANCIAL CONDITION. (a) Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to
9
Borrower has been initiated, and (b) it has received reasonably equivalent value
for the granting of this Security Instrument.
4.10 BUSINESS PURPOSES. The Loan is solely for the business
purpose of Borrower, and is not for personal, family, household, or agricultural
purposes.
4.11 TAXES. Borrower has filed all federal, state, county,
municipal, and city income and other tax returns required to have been filed by
them and have paid all taxes and related liabilities which have become due
pursuant to such returns or pursuant to any assessments received by them.
4.12 MAILING ADDRESS. Borrower's mailing address, as set
forth in the opening paragraph hereof or as changed in accordance with the
provisions hereof, is true and correct.
4.13 DISCLOSURE. To Borrower's best knowledge, Borrower has
disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially misleading.
4.14 ILLEGAL ACTIVITY. No portion of the Property has been
purchased with proceeds of any illegal activity.
5 - OBLIGATIONS AND RELIANCES
5.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower and no term or
condition of any of the Note, this Security Instrument and the other Loan
Documents shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor. Borrower is not relying on
Lender's expertise, business acumen or advice in connection with the Property.
5.2 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of Subsections 1.1(f) and (j) or Section 1.2, Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to this
Security Instrument, the Note or the other Loan Documents, Lender shall not be
deemed to have warranted, consented to, or affirmed the sufficiency, the
legality or effectiveness of same, and such acceptance or approval thereof shall
not constitute any warranty or affirmation with respect thereto by Lender.
6 - FURTHER ASSURANCES
6.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time, at the request of Lender, will cause this
Security Instrument and any of the other Loan Documents creating a lien or
security interest or evidencing the lien hereof upon the Property to
10
be filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect and perfect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Except where prohibited by law, Lender will pay all
taxes, duties, imposts, assessments, filing, registration and recording fees,
and any and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Loan Documents and any amendment or supplement thereto.
6.2 FURTHER ACTS, ETC. Borrower will, at the cost of Lender,
do, execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments, transfers, deeds to
secure debt and assurances as Lender shall, from time to time, reasonably
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for complying with all Applicable Laws. Borrower, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Lender in the Property.
Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without limitation
such rights and remedies available to Lender pursuant to this Section 6.2.
6.3 ESTOPPEL CERTIFICATES. After request by Lender,
Borrower, within ten (10) days, shall furnish Lender or any proposed assignee an
estoppel certificate in form and content as may be reasonably requested by
Lender with respect to the status of the Loan and/or the Loan Documents.
6.4 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of
an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any other Loan Document which is not of public record, and, in the case
of any such mutilation, upon surrender and cancellation of such Note or other
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other
Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note
or other Loan Document in the same principal amount thereof and otherwise of
like tenor.
7 - DUE ON SALE/ENCUMBRANCE
7.1 LENDER RELIANCE. Borrower acknowledges that Lender has
examined and relied on the experience of Borrower and its general partners,
managing members, principals and (if Borrower is a trust) beneficial owners in
owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Borrower's ownership of the Property as a
means of maintaining the value of the Property as security for payment and
performance of the Obligations. Borrower acknowledges that Lender has a valid
interest in maintaining the value of the Property so as to ensure that, should
Borrower default in the
11
payment or the performance of the Obligations, Lender can recover the Debt by a
sale of the Property.
7.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower shall
not, without the prior written consent of Lender, sell, convey, mortgage, grant,
bargain, encumber, pledge, assign, or otherwise transfer the Property or any
part thereof or permit the Property or any part thereof to be sold, conveyed,
mortgaged, granted, bargained, encumbered, pledged, assigned, or otherwise
transferred. Notwithstanding the foregoing, Lender hereby acknowledges that Net
Lease Tenant has an option to purchase the Property pursuant to the terms of the
Net Lease and consents to such purchase option; provided, however, that in the
event that Net Lease Tenant shall exercise such purchase option in accordance
with the terms of the Net Lease, the Maturity Date shall be accelerated as
provided in the Note.
7.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer within the meaning
of this Article 7 shall be deemed to include, but not be limited to, (a) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a tenant thereunder or a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower's right, title and interest in and
to any Leases or any Rents; (c) if Borrower or any general partner or managing
member of Borrower is a corporation, the voluntary or involuntary sale,
conveyance, transfer or pledge of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock; (d) if Borrower or
any general partner or managing member of Borrower is a limited or general
partnership or joint venture, the change, removal or resignation of a general
partner or managing partner, or the transfer or pledge of the partnership
interest of any general partner or managing partner of such partnership or any
profits or proceeds relating to such partnership interest or the transfer or
pledge of any limited partnership interests in such partnership or any profits
or proceeds related to such interests whether in one transfer or pledge or a
series of transfers or pledges; (e) if Borrower or any general partner or
managing member of Borrower is a limited liability company, the change, removal
or resignation of the managing member of such company, or the transfer or pledge
of the membership interest of the managing member of such company or any profits
or proceeds relating to such membership interest or the transfer or pledge of
any membership interests in such company or any profits or proceeds related to
such interests whether in one transfer or pledge or a series of transfers or
pledges; and (f) without limitation to the foregoing, any voluntary or
involuntary sale, transfer, conveyance or pledge by any person or entity which
directly or indirectly controls Borrower (by operation of law or otherwise) (a
"Principal") of its direct or indirect controlling interest in Borrower.
Notwithstanding the foregoing, the following transfers shall not be deemed to be
a sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment or
transfer within the meaning of this Article 7: (A) transfer by devise or descent
or by operation of law upon the death of a partner, member or stockholder of
Borrower or any general partner thereof, and (B) a sale, transfer or
hypothecation of a partnership, shareholder or membership interest in Borrower,
whichever the case may be, by the current partner(s), shareholder(s) or
member(s), as applicable, to an immediate family member (i.e., parents, spouses,
siblings, children or grandchildren) of such partner, shareholder or member or
to a Principal (or a trust for the benefit of any such persons).
12
7.4 LENDER'S RIGHTS. Lender reserves the right to condition
the consent required hereunder upon a modification of the terms hereof and on
assumption of the Note, this Security Instrument and the other Loan Documents as
so modified by the proposed transferee, the approval by Lender of the proposed
transferee, or such other conditions as Lender shall determine in its sole
discretion to be in the interest of Lender. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
Borrower's sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property without Lender's consent. This provision
shall apply to every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property regardless of whether voluntary
or not, or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.
8 - DEFAULT
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an "Event of Default": (i) if the entire
Debt is not paid on or before the Maturity Date; (ii) if Borrower shall fail to
pay to Lender any installment of the Constant Monthly Payment, except to the
extent that Borrower shall be excused from paying the same; (iii) if Borrower
shall breach any of the covenants contained in Section 1.2(b) above; (iv) if any
of SPSP, Passyunk or 24th Street shall (w) voluntarily be adjudicated a bankrupt
or insolvent, (x) consent to the appointment of a receiver or trustee for itself
or for any of the Property, (y) file a petition seeking relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, or (z) make a general assignment for the benefit of creditors; (v)
if a court shall enter an order, judgment or decree appointing a receiver or
trustee for any of SPSP, Passyunk or 00xx Xxxxxx or for any of Borrower's
interest in the Property or approving a petition filed against any of SPSP,
Passyunk or 00xx Xxxxxx which seeks relief under the bankruptcy or other similar
laws of the United States, any state or any jurisdiction, and such order,
judgment or decree shall remain in force, undischarged or unstayed, sixty days
after it is entered; (vi) if any of SPSP, Passyunk or 00xx Xxxxxx shall in any
insolvency proceedings be liquidated or dissolved or shall begin proceedings
towards its liquidation or dissolution; or (vii) if the estate or interest of
any of SPSP, Passyunk or 00xx Xxxxxx in any of the Property shall be levied upon
or attached in any proceeding and such estate or interest is about to be sold or
transferred or such process shall not be vacated or discharged within sixty (60)
days after such levy or attachment.
9 - RIGHTS AND REMEDIES
9.1 REMEDIES. Upon the occurrence of any Event of Default,
Borrower agrees that Lender may take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Borrower and in and
to the Property, including, but not limited to, the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Lender may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Lender: (a) declare the entire unpaid
Debt to be immediately due and payable; (b) with or without entry, institute
proceedings, judicial or otherwise, for the complete or partial foreclosure of
this Security Instrument under any applicable provision of law in which case the
Property or any interest therein may be sold for
13
cash or upon credit in one or more parcels or in several interests or portions
and in any order or manner, any partial foreclosure to be subject to the
continuing lien and security interest of this Security Instrument for the
balance of the Debt not then due, unimpaired and without loss of priority; (c)
sell for cash or upon credit the Property or any part thereof and all estate,
claim, demand, right, title and interest of borrower therein and rights of
redemption thereof, pursuant to power of sale, judicial decree or otherwise, at
one or more sales, as an entirety or in one or more parcels; (d) institute an
action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note or in the other
Loan Documents; (e) recover judgment on the Note either before, during or after
any proceedings for the enforcement of this Security Instrument or the other
Loan Documents; (f) apply for the appointment of a receiver, trustee, liquidator
or conservator of the Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency of
Borrower or of any person, firm or other entity liable for the payment of the
Debt; (g) enter into or upon the Property, either personally or by its agents,
nominees or attorneys and dispossess Borrower and its agents and servants
therefrom, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of all
books, records and accounts relating thereto and Borrower agrees to surrender
possession of the Property and of such books, records and accounts to Lender
upon demand, and thereupon Lender may exercise all rights and powers of Borrower
with respect to the Property including, without limitation; (1) the right to
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat
including without limitation the right to perform the landlord's obligations
under the Net Lease with or without entry; (2) the right to make or complete any
construction, alterations, additions, renewals, replacements and improvements to
or on the Property as Lender deems advisable; (3) the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand xxx for, collect
and receive all Rents of the Property and every part thereof; (h) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (i)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; (j) apply the receipts from the Property and/or any
Deposits and interest thereon to the payment of the Obligations, it being agreed
that Lender shall apply such receipts first to interest and then to principal;
(k) exercise any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing: the right to (1) take possession of the Personal
Property or any part thereof, and to take such other measures as Lender may deem
necessary for the care, protection and preservation of the Personal Property,
and (2) request Borrower at its expense to assemble the Personal Property and
make it available to Lender at a convenient place acceptable to Lender. Any
notice of sale, disposition or other intended action by Lender with respect to
the Personal Property sent to Borrower in accordance with the provisions hereof
at least five (5) days prior to such action, shall constitute commercially
reasonable notice to Borrower. Upon any foreclosure or other sale of the
Property pursuant to the terms hereof, Lender may bid for and purchase the
Property and shall be entitled to apply all or any part of the secured
indebtedness as a credit against the purchase price.
In the event of a sale, by foreclosure, power of sale, or
otherwise, of less than all of the Property, this Security Instrument shall
continue as a lien and security interest on the
14
remaining portion of the Property unimpaired and without loss of priority.
Notwithstanding the provisions of this Section 9.1 to the contrary, if any Event
of Default as described in clause (iii), (iv), (v) or (vi) of Section 8.1(a)
shall occur, the entire unpaid Debt shall be automatically due and payable,
without any further notice, demand or other action by Lender.
9.2 APPLICATION OF PROCEEDS. The purchase money, proceeds
and avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
other Loan Documents, may be applied by Lender to the payment of the Debt, first
to interest and then to principal.
9.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event
of Default, Lender may, but without any obligation to do so and without notice
to or demand on Borrower and without releasing Borrower from any obligation
hereunder or curing or being deemed to have cured any default hereunder, make or
do the same in such manner and to such extent as Lender may deem necessary to
protect the security hereof. Lender is authorized to enter upon the Property for
such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Security Instrument or
collect the Debt, or to enforce the terms and conditions of the Net Lease, and
the cost and expense thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section 9.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Lender in remedying such Event
of Default or such failed payment or act or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate
(as defined in the Note), for the period after notice from Lender that such cost
or expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.
9.4 ACTIONS AND PROCEEDINGS. Subject to the terms of the Net
Lease, Lender has the right to appear in and defend any action or proceeding
brought with respect to the Property and to bring any action or proceeding, in
the name and on behalf of Borrower, which Lender, in its discretion, decides
should be brought to protect its interest in the Property.
9.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
9.6 OTHER RIGHTS, ETC. (a) The failure of Lender to insist
upon strict performance of any term hereof shall not be deemed to be a waiver of
any term of this Security Instrument. Borrower shall not be relieved of
Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower to take any action to foreclose this
Security Instrument or otherwise enforce any of the provisions hereof or of the
Note or the other Loan Documents, (ii) the release, regardless of consideration,
of the whole or any part of the
15
Property, or of any person liable for the Debt or any portion thereof, or (iii)
any agreement or stipulation by Lender extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Security
Instrument or the other Loan Documents.
(b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, or for failure to determine whether insurance
in force is adequate as to the nature or amount of risks insured. Possession by
Lender shall not be deemed an election of judicial relief, if any such
possession is requested or obtained, with respect to any Property or collateral
not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any
other security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender thereafter to foreclose this Security Instrument. The rights of
Lender under this Security Instrument shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of Lender
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision. Lender shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
9.7 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.
9.8 RIGHT OF ENTRY. Lender and its agents shall have the
right to enter and inspect the Property at all reasonable times.
9.9 DEFAULT INTEREST AND LATE CHARGES. Borrower acknowledges
that, without limitation to any of Lender's rights or remedies set forth in this
Security Instrument, Lender has the right following an Event of Default to
demand interest on the principal amount of the Note at the Default Rate and late
payment charges in accordance with the terms of the Note.
10 - WAIVERS
10.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against Borrower by Lender arising out of or in
any way connected with this Security Instrument, the Note, any of the other Loan
Documents, or the Obligations.
10.2 MARSHALING AND OTHER MATTERS. Borrower hereby waives, to
the extent permitted by law, the benefit of all appraisement, valuation, stay,
extension,
16
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Property or any part
thereof or any interest therein. Further, Borrower hereby expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Security Instrument on behalf of Borrower, and on behalf of each and
every person acquiring any interest in or title to the Property subsequent to
the date of this Security Instrument and on behalf of all persons to the extent
permitted by applicable law.
10.3 WAIVER OF NOTICE. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly provides for the
giving of notice by Lender to Borrower and except with respect to matters for
which Lender is required by applicable law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Lender to Borrower.
10.4 SOLE DISCRETION OF LENDER. Wherever pursuant to this
Security Instrument (a) Lender exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lender, or (c)
any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove, all decisions that arrangements or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lender, shall be in the sole and absolute discretion of Lender, except as may
be otherwise expressly and specifically provided herein.
10.5 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN, THE APPLICATION FOR THE LOAN, THE NOTE, THIS
SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS OR ANY ACTS OR OMISSIONS OF
LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
11 - EXCULPATION
11.1 EXCULPATION. Lender shall not enforce the liability and
obligation of Borrower to perform and observe the obligations contained in the
Note or this Security Instrument by any action or proceeding wherein a money
judgment shall be sought against Borrower (or its partners, shareholders,
officers or directors), except only that Lender may sell the Property under any
power of sale or right of non-judicial foreclosure or bring a foreclosure
action, confirmation action, action for specific performance or other
appropriate action or proceeding to enable Lender to enforce and realize upon
the Note, this Security Instrument, the other Loan Documents, and the interest
in the Property, the Rents and any other collateral given to Lender created by
the Note, this Security Instrument and the other Loan Documents; provided,
however, that any judgment in any such action or proceeding shall be enforceable
against Borrower only to the extent of Borrower's interest in the Property, in
the Rents and in any other collateral given to Lender. Lender, by accepting the
Note and this Security Instrument, agrees that it shall not xxx for, seek or
demand any deficiency judgment against Borrower (or its
17
partners, shareholders, officers or directors) in any such action or proceeding,
under or by reason of or under or in connection with the Note, the other Loan
Documents or this Security Instrument.
11.2 RESERVATION OF CERTAIN RIGHTS. The provisions of Section
11.1 shall not, however, (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by the Note, the other Loan Documents or this
Security Instrument; (b) impair the right of Lender to name Borrower as a party
defendant in any action or suit for judicial foreclosure and sale under this
Security Instrument; (c) affect the validity or enforceability without regard to
the provisions of Section 11.1 of any indemnity, guaranty, master lease or
similar instrument made in connection with the Note, this Security Instrument,
or the other Loan Documents; (d) impair the right of Lender to obtain the
appointment of a receiver; (e) impair the enforcement of the Assignment of
Leases and Rents executed in connection herewith; or (f) impair the right of
Lender to obtain a deficiency judgment or judgment on the Note against Borrower
if necessary to obtain any insurance proceeds or condemnation awards to which
Lender would otherwise be entitled under this Security Instrument, provided,
however, Lender shall only enforce such judgment against the insurance proceeds
and/or condemnation awards.
11.3 BANKRUPTCY CLAIMS. Nothing herein shall be deemed to be
a waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Code to file a claim for the
full amount of the Debt or to require that all collateral shall continue to
secure all of the Debt owing to Lender in accordance with the Note, this
Security Instrument and the other Loan Documents.
12 - NOTICES
12.1 NOTICES. All notices, requests, demands and other
communications provided for by this Agreement shall be (a) in writing, (b) sent
either by hand delivery service or by same day or overnight recognized
commercial courier service, addressed to the address of the parties stated below
or to such changed address as such party may have fixed by notice, and (c)
deemed to have been delivered on the date of receipt thereof (or the date that
such receipt is refused, if applicable), addressed as follows:
If to Borrower: c/o Greentree Properties Corporation
00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Erlbaum
With a copy to: Greentree Properties Corporation
00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
With a copy to: Ledgewood Law Firm, P.C.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Abt, Esq.
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If to Lender: Cedar-South Philadelphia II, LLC
00 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxx X. Xxxxxx
With a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Section, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in
Philadelphia, Pennsylvania.
13 - APPLICABLE LAW
13.1 CHOICE OF LAW. This Security Instrument shall be
governed, construed, applied and enforced in accordance with the laws of the
state in which the Property is located and the applicable laws of the United
States of America.
13.2 USURY LAWS. This Security Instrument and the Note are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the Debt at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Security Instrument or the
Note, Borrower is at any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.
13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid
19
or unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
14 - COSTS
14.1 PERFORMANCE AT LENDER'S EXPENSE. Lender shall not be
permitted to any administrative processing and/or commitment fees in connection
with: (a) extensions, renewals, modifications, amendments and terminations of
the Loan Documents requested by Borrower, and (b) the release or substitution of
collateral for the Loan requested by Borrower, and Lender shall not be entitled
to reimbursement for its reasonable out-of-pocket costs and expenses associated
with its provision of consents, waivers and approvals under the Loan Documents
(the occurrence of any of the above shall be called an "Event"). Lender further
acknowledges and confirms that Lender shall be responsible for the payment of
all costs of reappraisal of the Property or any part thereof, which are required
by law, regulation or any governmental or quasi-governmental authority.
14.2 ATTORNEY'S FEES FOR ENFORCEMENT. Each party shall pay
their respective legal fees in connection with the preparation of the Note, this
Security Instrument and the other Loan Documents. In the event that either party
shall prosecute an action for enforcement of its rights under the Note, this
Security Instrument or the Other Loan Documents, the prevailing party in such
action shall be entitled to recover as a part of such action the actual
out-of-pocket costs and reasonable attorneys' fees incurred by such prevailing
party in connection with such action.
15 - TRANSFER OF LOAN
15.1 TRANSFER OF LOAN. Lender may, at any time, on prior
notice to Borrower, sell, transfer or assign the Note, this Security Instrument
and the other Loan Documents, provided that said assignee shall either be (i)
Net Lease Tenant, or (ii) the holder of a leasehold mortgage granted by Net
Lease Tenant, or (iii) an affiliate of either Net Lease Tenant or the holder of
a leasehold mortgage granted by Net Lease Tenant. Lender may forward to each
purchaser, transferee or assignee all documents and information which Lender now
has or may hereafter acquire relating to the Debt and to Borrower and the
Property, whether furnished by Borrower or otherwise, as Lender determines
necessary or desirable. Borrower agrees to cooperate with Lender in connection
with any transfer made pursuant to this Section, provided such cooperation does
not require Borrower to incur any cost or expense.
16 - DEFINITIONS
16.1 GENERAL DEFINITIONS. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "Lender" shall mean "Lender, its servicer and any subsequent
holder of the Note," the word "Note" shall mean "the Note and any other evidence
of indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, partnership, limited liability company,
trust, unincorporated association,
20
government, governmental authority, and any other entity, the word "Property"
shall include any portion of the Property and any interest therein, and the
phrases "attorneys' fees", "legal fees" and "counsel fees" shall include any and
all reasonable attorneys', paralegal and law clerk fees and disbursements,
including, but not limited to, fees and disbursements at the pre-trial, trial
and appellate levels incurred or paid by Lender in protecting its interest in
the Property, the Leases and the Rents and enforcing its rights hereunder.
17 - MISCELLANEOUS PROVISIONS
17.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
17.2 LIABILITY. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.
17.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Security Instrument is held to be invalid, illegal
or unenforceable in any respect, the Note and this Security Instrument shall be
construed without such provision.
17.4 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.
17.5 DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterparts shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
17.6 NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
17.7 SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the payment and performance of the
Obligations.
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17.8 ENTIRE AGREEMENT. The Note, this Security Instrument and
the other Loan Documents constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Debt and supersede all prior written or oral understandings
and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security
Instrument and the other Loan Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, this Security
Instrument and the other Loan Documents.
18 - STATE SPECIFIC PROVISIONS
18.1 OPEN-END MORTGAGE. (a) This Security Instrument is an
open-end mortgage pursuant to 42 PA. C.S.A. Section 8143, and secures, inter
alia, present and future advances made by Lender pursuant to the Loan Documents,
including, without limitation, advances for the payment of taxes, assessments,
maintenance charges, insurance premiums or costs incurred for the protection of
the Property or the lien of this Security Instrument, or expenses incurred by
the Lender by reason of default by Borrower, and to enable any completion of the
Improvements comprising the Property as may be contemplated by the Loan
Documents. Nothing contained herein shall impose any obligation on the part of
Lender to make any such additional loan(s) to Borrower.
(b) Without limiting any other provisions of this Security
Instrument, this Security Instrument secures present and future loans, advances
and extensions of credit made by Lender to or for the benefit of Borrower, and
the lien of such future advances shall relate back to the date of this Security
Instrument. This Security Instrument shall also secure additional loans
hereafter made by Lender to Borrower. Nothing contained herein shall impose any
obligation on the part of Lender to make any such additional loans, advances and
extensions of credit to or for the benefit of Borrower.
(c) If Borrower sends a written notice to Lender which
purports to limit the indebtedness secured by this Security Instrument and to
release the obligation of the Lender to make any additional advances to
Borrower, such notice shall be ineffective as to any future advances made: (i)
to pay taxes, assessments, maintenance charges and insurance premiums; (ii)
costs incurred for the protection and preservation of the Property or the lien
of this Security Instrument, and (iii) costs and expenses incurred by Lender by
reason of the default of Borrower. It is the intention of the parties hereto
that any such advance made by Lender after any such notice by Borrower shall be
secured by the lien of this Security Instrument on the Property.
18.2 ACTION IN EJECTMENT. (a) For the purpose of obtaining
possession of the Land and the Improvements in the event of any Event of Default
hereunder or under the Note, Borrower hereby authorizes and empowers any
attorney of any court of record in the Commonwealth of Pennsylvania or
elsewhere, as attorney for Borrower and all persons claiming under or through
Borrower, to appear for and confess judgment against Borrower, and against all
persons claiming under or through mortgagor, in an action in ejectment for
possession of the Property, in favor of Lender, for which this Security
Instrument, or a copy thereof verified by affidavit, shall be a sufficient
warrant; and thereupon a writ of possession may immediately issue
22
for possession of the property, without any prior writ or proceeding whatsoever
and without any stay of execution. If for any reason after such action has been
commenced it shall be discontinued, or possession of the Property shall remain
in or be restored to Borrower, Lender shall have the right for the same default
or any subsequent default to bring one or more further actions as above provided
to recover possession of the Property. Lender may confess judgment in an action
in ejectment before or after the institution of proceedings to foreclose this
Security Instrument or to enforce the Note, or after entry of judgment therein
or on the Note, or after a sheriffs sale or judicial sale or other foreclosure
sale of the Property in which Lender is the successful bidder, it being the
understanding of the parties that the authorization to pursue such proceedings
for confession of judgment therein is an essential part of the remedies for
enforcement of this Security Instrument and the Note, and shall survive any
execution sale to Lender.
(b) Borrower confirms to Lender that (i) Borrower is a
business entity and that its principals are knowledgeable in business matters;
(ii) the terms of this Security Instrument, including the foregoing warrant of
attorney to confess judgment, have been negotiated and agreed upon in a
commercial context; and (iii) Borrower has fully reviewed the aforesaid warrant
of attorney to confess judgment with its own counsel and is knowingly and
voluntarily waiving certain rights it would otherwise possess, including but not
limited to, the right to any notice of a hearing prior to the entry of judgment
by Lender pursuant to the foregoing warrant.
18.3 CONFLICTING PROVISIONS. The provisions of this Article
18 are intended to supplement, and not limit, the other provisions of this
Security Instrument; provided, however, that in the event the provisions of this
Article 18 contradict any other provision of this Security instrument, the
provisions of this Article 18 shall govern.
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower as of the day and year first above written.
SPSP Corporation
By: /s/ Xxxx X. Erlbaum
--------------------------------------
Name: Xxxx X. Erlbaum
Title: President
Passyunk Supermarket, Inc.
By: /s/ Xxxx X. Erlbaum
--------------------------------------
Name: Xxxx X. Erlbaum
Title: President
Twenty Fourth Street Passyunk Partners, L.P.
By: Twenty Fourth Street Passyunk
Corporation, its general partner
By: /s/ Marc Erlbaum
--------------------------------------
Name: Marc Erlbaum
Title: President
The undersigned hereby certifies that the address of the within named mortgagee
is:
Cedar-South Philadelphia II, LLC
00 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
--------------------------------
On behalf of mortgagee
00
XXXXXXXXXXXXXXXX
XXXXX XX Xxxxxxxxxxxx )
) ss.:
COUNTY OF Xxxxxxxxxx )
AND NOW, this 24th day of October, 2003 before me, the
undersigned Notary Public, personally appeared Xxxx Erlbaum, who acknowledged
himself/herself to be the President of SPSP CORPORATION, a Pennsylvania
corporation, and that he/she, as such President being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation by himself/herself as President.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
/s/
--------------------------------------
Notary Public
My commission expires:
STATE OF Pennsylvania )
) ss.:
COUNTY OF Xxxxxxxxxx )
AND NOW, this 24th day of October 2003 before me, the
undersigned Notary Public, personally appeared Xxxx Erlbaum, who acknowledged
himself/herself to be the President of PASSYUNK SUPERMARKET, INC., a
Pennsylvania corporation, and that he/she, as such President being authorized to
do so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation by himself/herself as President.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
/s/
--------------------------------------
Notary Public
My commission expires:
00
XXXXX XX Xxxxxxxxxxxx )
) ss.:
COUNTY OF Xxxxxxxxxx )
AND NOW, this 24th day of October, 2003, before me, the
undersigned Notary Public, personally appeared Marc Erlbaum who acknowledged
himself/herself to be the President of TWENTY FOURTH STREET PASSYUNK
CORPORATION, the general partner of TWENTY FOURTH STREET PASSYUNK PARTNERS,
L.P., a Pennsylvania limited partnership, and he/she, as such President, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
/s/
--------------------------------------
Notary Public
My commission expires:
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