PROMISSORY NOTE
$17,500,000.00 December 9, 2003
1. Promise To Pay.
FOR VALUE RECEIVED, CEDAR SHOPPING CENTERS PARTNERSHIP, L.P., a Delaware
limited partnership having an address at 44 South Bayles Avenue, Port
Washington, New York 11050 (hereinafter, the "Borrower") promises to pay to the
order of FLEET NATIONAL BANK, a national banking association, having an address
at 100 Federal Street, Boston, Massachusetts 02110 (hereinafter, a "Lender"),
the principal sum of SEVENTEEN MILLION AND FIVE HUNDRED THOUSAND DOLLARS
($17,500,000.00), with interest thereon, or on the amount thereof from time to
time outstanding, to be computed, as hereinafter provided, on each advance from
the date hereof until such principal sum shall be fully paid. Interest and
principal shall be payable as set forth below. The total principal sum, or the
amount thereof outstanding, together with any accrued but unpaid interest, shall
be due and payable within five (5) Business Days after DEMAND by the Lender,
which demand made be made at any time in the sole and absolute discretion of the
Lender. "Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Boston, Massachusetts, are authorized or
required to close under the laws of the Commonwealth of Massachusetts.
2. Interest Rate/Payments.
2.1. Principal amounts outstanding under this Note shall bear
interest at the floating rate equal to the aggregate of the Prime Rate plus one
quarter percent (.25%) per annum. The term "Prime Rate" means the greater of (i)
a variable per annum rate of interest so designated from time to time by Fleet
National Bank (or any successor thereto), as its prime rate, or (ii) the Federal
Funds Rate plus 0.50% per annum. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
2.2. All interest shall be: (a) payable in arrears commencing January
1, 2004 and on the same day of each month thereafter until the principal
together with all interest and other charges payable with respect to the Note
shall be fully paid; and (b) calculated on the basis of a 360 day year and the
actual number of days elapsed. Each change in the Prime Rate shall
simultaneously change the rate payable under this Note.
2.3. This Note or any portion thereof may be prepaid in full or in
part at any time. Amounts paid or prepaid may not be reborrowed.
2.4. All payments of interest, principal and fees shall be made in
lawful money of the United States in immediately available funds, without
counterclaim or setoff and free and clear of, and without any deduction or
withholding for, any taxes or other payments: (a) by direct charge to an account
of Borrower maintained with the Lender, or, if not paid under this subsection
(a), (b) by wire transfer to Lender or (c) to such other bank or address as the
holder of the Note may designate in a written notice to Borrower. Payments shall
be credited on the business day on which immediately available funds are
received prior to 1:00 p.m. (Eastern
time); payments received after 1:00 p.m. (Eastern time) shall be credited to the
Note on the next business day. Payments which are by check, which Lender may at
its option accept or reject, or which are not in the form of immediately
available funds shall not be credited to the Note until such funds become
immediately available to Lender, and, with respect to payments by check, such
credit shall be provisional until the item is finally paid by the payor bank.
2.5. Lender may submit monthly billings reflecting payments due;
however, any changes in the interest rate which occur between the date of
billing and the due date may be reflected in the billing for a subsequent month.
Neither the failure of Lender to submit a billing nor any error in any such
billing shall excuse Borrower from the obligation to make full payment of all
Borrower's payment obligations when due.
2.6. Lender shall have the option of imposing, and Borrower shall pay
upon billing therefor, an interest rate which is four percent (4.0%) per annum
above the rate then in effect with respect to the Note ("Default Rate")
following the fifth (5th) Business Day after any demand for payment in full by
the Lender.
2.7. Borrower shall pay a late charge (herein, the "Late Charge")
equal to five percent (5%) of the amount of any interest, which is not paid
within ten (10) days of the due date thereof. Late charges are: (a) payable in
addition to, and not in limitation of, the Default Rate, (b) intended to
compensate Lender for administrative and processing costs incident to late
payments, (c) are not interest, and (d) not subject to refund or rebate or
credited against any other amount due.
2.8. All payments shall be applied first to the payment of all fees,
expenses and other amounts due to the Lender (excluding principal and interest),
then to accrued interest, and the balance on account of outstanding principal;
provided, however, that after demand, payments will be applied to the
obligations of Borrower to the Lender as Lender determines in its sole
discretion.
2.9. Upon the execution hereof, the Borrower shall pay to the Lender
a closing fee of $100,000.00.
3. Acceleration.
Upon demand by the Lender, this Note and the indebtedness evidenced
hereby shall become immediately due and payable without further notice or
demand, and notwithstanding any prior waiver of any breach or default, or other
indulgence. Upon such demand, Lender shall have, in addition to any rights and
remedies contained herein, any and all rights and remedies set forth under
applicable law. The rights, remedies, powers, privileges, and discretions of the
Lender hereunder (herein, the "LENDER'S RIGHTS AND REMEDIES") shall be
cumulative and not exclusive of any rights or remedies which it would otherwise
have. No delay or omission by the Lender in exercising or enforcing any of the
Lender's Rights and Remedies shall operate as, or constitute, a waiver thereof.
No waiver by the Lender of any of the Lender's Rights and Remedies or of any
default or remedies under any other agreement with the Borrower, or of any
default under any agreement with the Borrower, or any other person liable or
obligated for or on the liabilities under this Note, shall operate as a waiver
of any other of the Lender's Rights and
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Remedies or of any default or remedy hereunder or thereunder. No exercise of any
of the Lender's Rights and Remedies and no other agreement or transaction of
whatever nature entered into between the Lender and the Borrower and/or between
the Lender and any such other person at any time shall preclude any other
exercise of the Lender's Rights and Remedies. No waiver by the Lender of any of
the Lender's Rights and Remedies on any one occasion shall be deemed a waiver on
any subsequent occasion, nor shall it be deemed a continuing waiver. All of the
Lender's Rights and Remedies, and all of the Lender's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction with the
Borrower or any guarantor, endorser, or other person liable under or on account
of this Note shall be cumulative and not alternative or exclusive, and may be
exercised by the Lender at such time or times and in such order of preference as
the Lender in its sole discretion may determine.
4. Certain Waivers, Consents and Agreements.
Each and every party liable hereon, or for the indebtedness evidenced
hereby, whether as maker, endorser, guarantor, surety or otherwise hereby: (a)
waives presentment, demand, protest, suretyship defenses and defenses in the
nature thereof; (b) waives any defenses based upon, and specifically assents to,
any and all extensions and postponements of the time for payment, changes in
terms and conditions and all other indulgences and forbearances which may be
granted by the Lender or the holder to any party now or hereafter liable
hereunder or for the indebtedness evidenced hereby; (c) agrees to any
substitution, exchange, release, surrender or other delivery of any security or
collateral now or hereafter held hereunder or in connection with this Note, and
to the addition or release of any other party or person primarily or secondarily
liable; (d) agrees that if any security or collateral given to secure this Note
or the indebtedness evidenced hereby, shall be found to be unenforceable in full
or to any extent, or if Lender or any other party shall fail to duly perfect or
protect such collateral, the same shall not relieve or release any party liable
hereon or thereon nor vitiate any other security or collateral given for any
obligations evidenced hereby or thereby; (e) agrees to pay all costs and
expenses actually incurred by Lender or any other holder of this Note in
connection with the indebtedness evidenced hereby, including, without
limitation, all reasonable attorneys' fees and costs, for the implementation of
the Note, the collection of the indebtedness evidenced hereby and the
enforcement of rights and remedies hereunder, whether or not suit is instituted;
and (f) consents to all of the terms and conditions contained in this Note, and
all other instruments now or hereafter executed evidencing or governing all or
any portion of the security or collateral for this Note.
5. Delay Not A Bar.
No delay or omission on the part of the Lender or the holder in
exercising any right hereunder or any right under any instrument or agreement
now or hereafter executed in connection herewith, or any agreement or instrument
which is given or may be given to secure the indebtedness evidenced hereby, or
any other agreement now or hereafter executed in connection herewith or
therewith shall operate as a waiver of any such right or of any other right of
such holder, nor shall any delay, omission or waiver on any one occasion be
deemed to be a bar to or waiver of the same or of any other right on any future
occasion.
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6. Partial Invalidity.
The invalidity or unenforceability of any provision hereof, or of any
other instrument, guaranty, agreement or document now or hereafter executed in
connection with this Note made pursuant hereto and thereto shall not impair or
vitiate any other provision of any of such instruments, agreements and
documents, all of which provisions shall be enforceable to the fullest extent
now or hereafter permitted by law.
7. Compliance With Usury Laws.
All agreements among Borrower and Lender are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law", shall mean the law in effect as
of the date hereof, provided, however, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In this regard, it
is expressly agreed that it is the intent of Borrower and Lender in the
execution, delivery and acceptance of this Note to contract in strict compliance
with the laws of the Commonwealth of Massachusetts from time to time in effect.
If, under or from any circumstances whatsoever, fulfillment of any provision
hereof at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limit of such
validity, and if under or from any circumstances whatsoever Lender should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements among Borrower
and Lender in connection with this Note.
8. Use of Proceeds.
All proceeds of this Note shall be used solely for (i) payoff by the
Borrower (or a subsidiary or affiliate of the Borrower) of that certain loan
(the "GECC Loan"), in the original principal amount of Seventeen Million Five
Hundred Thousand Dollars ($17,500,000), made as of June 27, 2002, by General
Electric Capital Corporation ("GECC") to Delaware 1851 Associates, LP ("1851"),
as evidenced by that certain Promissory Note, dated as of June 27, 2002, in the
amount of Seventeen Million Five Hundred Thousand Dollars ($17,500,000), made by
1851 to GECC and that certain Loan Agreement, dated as of June 27, 2002, between
1851 and GECC, and (ii) satisfaction by the Borrower (or a subsidiary or
affiliate of the Borrower) of that certain Open-End Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated as of June 27,
2002, made by 1851 to GECC, securing the obligations under the GECC Loan and
encumbering the property commonly known as the Columbus Crossing Shopping
Center, Philadelphia, Pennsylvania and having a street address of 1851 South
Christopher Columbus Boulevard, Philadelphia, Pennsylvania (the "Property"). No
portion of the proceeds of the loan shall be used, in whole or in part, for the
purpose of purchasing or carrying any "margin stock" as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System.
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9. Security.
In the event this Note shall not be repaid in full within thirty (30)
days from the date of execution, upon the request of the Lender, the Borrower
agrees that it shall execute and deliver to the Lender a pledge and security
with respect to the Borrower's (or any subsidiary's or affiliate's of the
Borrower) entire ownership interest in the entity owning the Property, and take
such other action and execute such further documents as the Lender may request
to vest, perfect and confirm such pledge.
10. Notices. Any notice or other communication in connection with this Note,
shall be in writing, and (i) deposited in the United States Mail, postage
prepaid, by registered or certified mail, or (ii) hand delivered by any
commercially recognized courier service or overnight delivery service such as
Federal Express, or (iii) sent by facsimile transmission if a FAX Number is
designated below addressed:
If to Borrower:
Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Leo S. Ullman
FAX Number: (516) 767-6497
with a copy to:
Cedar Shopping Centers Partnership, L.P.
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Stuart H. Widowski, Esquire
FAX Number: (516) 767-6497
with copies by regular mail or such hand delivery or facsimile transmission to:
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038-4982
Attention: Mark A. Levy, Esquire
Fax Number: (212) 806-6006
If to Lender:
Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
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Attention: James L. Keough
Mail Stop: MA DE 10008H
FAX Number: (617) 434-6384
And
Attention: Commercial Real Estate Loan
Administration Manager,
with copies by regular mail or such hand delivery or facsimile transmission to:
Riemer & Braunstein LLP
Three Center Plaza
Boston, Massachusetts 02108
Attention: Kevin J. Lyons, Esquire
FAX Number: (617) 880-3456
Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery.
A notice shall be deemed to have been given, delivered and received for
the purposes of this Note upon the earliest of: (i) if sent by such certified or
registered mail, on the third Business Day following the date of postmark, or
(ii) if hand delivered at the specified address by such courier or overnight
delivery service, when so delivered or tendered for delivery during customary
business hours on a Business Day, or (iii) if so mailed, on the date of actual
receipt as evidenced by the return receipt, or (iv) if so delivered, upon actual
receipt, or (v) if facsimile transmission is a permitted means of giving notice,
upon receipt as evidenced by confirmation.
11. Governing Law and Consent to Jurisdiction.
11.1. Substantial Relationship. It is understood and agreed that this
Note was delivered in the Commonwealth of Massachusetts, which Commonwealth the
parties agree has a substantial relationship to the parties and to the
underlying transactions embodied by this Note.
11.2. Place of Delivery. Borrower agrees to furnish to Lender at
Lender's office in Boston, Massachusetts all further instruments, certifications
and documents to be furnished hereunder, if any.
11.3. Governing Law. This Note and each of the other documents
executed in connection therewith, shall in all respects be governed, construed,
applied and enforced in accordance with the internal laws of the Commonwealth of
Massachusetts without regard to principles of conflicts of law, except insofar
as formation of the Borrower under Delaware law requires Delaware law to apply
with respect to matters of authorization to enter into the transaction
contemplated by this Note.
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11.4. Consent to Jurisdiction. THE BORROWER AGREES THAT ANY SUIT FOR
THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED ABOVE. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
12. Waiver of Jury Trial.
BORROWER AND LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF LENDER RELATING TO THE
ADMINISTRATION OF THIS NOTE OR ENFORCEMENT OF THIS NOTE, AND AGREE THAT NEITHER
PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW,
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER
TO ACCEPT THIS NOTE AND MAKE THE LOAN EVIDENCED BY THIS NOTE.
13. No Oral Change.
This Note may only be amended, terminated, extended or otherwise
modified by a writing signed by the party against which enforcement is sought in
accordance with the terms and conditions hereof. In no event shall any oral
agreements, promises, actions, inactions, knowledge, course of conduct, course
of dealing, or the like be effective to amend, terminate, extend or otherwise
modify this Note.
14. Rights of the Holder.
This Note, and the rights and remedies provided for herein, may be
enforced by Lender, the holder, or any subsequent holder hereof. Wherever the
context permits, each reference to the term "holder" herein shall mean and refer
to Lender, the holder, or the then subsequent holder of this Note.
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15. Right to Pledge.
Lender may at any time pledge all or any portion of its rights under
this Note to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
enforcement thereof shall release Lender from its obligations under this Note.
16. Assignment.
Borrower may not assign this Note or its obligations hereunder without
the prior written consent of Lender in each instance.
17. Setoff. Subject to the terms of this Section 16, Borrower hereby grants
to the Lender, a continuing lien, security interest and right of setoff as
security for all of the obligations under this Note, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Lender or any entity under the control of
FleetBoston Financial Corporation and its successors and assigns, or in transit
to any of them. If any payment is not made when due under this Note, after
giving regard to applicable grace periods, if any, or if the Lender makes demand
for payment in full hereunder, any such deposits, balances or other sums
credited by or due from Lender, any affiliate of Lender or FleetBoston Financial
Corporation, or from any such affiliate of Lender or FleetBoston Financial
Corporation, to Borrower may to the fullest extent not prohibited by applicable
law at any time or from time to time, without regard to the existence,
sufficiency or adequacy of any other collateral, and without notice or
compliance with any other condition precedent now or hereafter imposed by
statute, rule of law or otherwise, all of which are hereby waived, be set off,
appropriated and applied by Lender against any or all of Borrower's obligations
under this Note irrespective of whether demand shall have been made and although
such obligations may be unmatured, in such manner as Lender in its sole and
absolute discretion may determine. Within five (5) Business Days of making any
such set off, appropriation or application, Lender agrees to notify Borrower
thereof, provided the failure to give such notice shall not affect the validity
of such set off or appropriation or application. ANY AND ALL RIGHTS TO REQUIRE
LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE NOTE, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as
of the date set forth above as a sealed instrument.
Witness: BORROWER:
CEDAR SHOPPING CENTERS PARTNERSHIP, LP.
A DELAWARE LIMITED PARTNERSHIP
Janet Paturzo BY ITS GENERAL PARTNER
CEDAR SHOPPING CENTERS, INC.
By: /s/ Brenda J. Walker
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Name: Brenda J. Walker
Title: Vice President
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