Second Mortgages Clause Samples
The 'Second Mortgages' clause defines the rules and conditions under which a borrower may take out an additional mortgage on a property that is already subject to a primary mortgage. Typically, this clause outlines whether the lender's consent is required before a second mortgage can be obtained, and may specify any restrictions or notification requirements. Its core practical function is to protect the interests of the primary lender by ensuring they are aware of and can control additional encumbrances on the property, thereby managing the risk of default and preserving the lender's priority in case of foreclosure.
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Second Mortgages. Borrowers and the Lenders acknowledge that the Second Mortgage executed by each Borrower is intended to secure the obligations of such Borrower under the Secured Guaranty executed by such Borrower in an amount equal to the amount of all Loans, other than the Loans represented and evidenced by the Notes executed by such Borrower and secured by the related First Mortgage of such Borrower. Notwithstanding the foregoing, at Borrowers’ request, Administrative Agent and the Lenders have agreed that certain Second Mortgages shall secure an amount (the “Apportioned Amount”) less than the amount of all Loans other than the Loans represented and evidenced by the Notes executed by such Borrower and secured by the related First Mortgage of such Borrower. With respect to each Second Mortgage securing an Apportioned Amount and notwithstanding the Principal Repayment Allocations, each Borrower agrees that all amounts received by Administrative Agent and the Lenders which are required or otherwise applied to payment of the principal amount of the Loans shall first be applied to the principal amount of all Loans other than those comprising any part (or all) of the Apportioned Amount (the “Excess Obligations”), and only when the Excess Obligations have been paid in full shall subsequent payments in respect of the principal amount of the Loans be credited against the Apportioned Amount.
Second Mortgages. Contemporaneously with the execution of this Agreement, Debtors will cause to be executed and delivered to Bank, all in form and substance satisfactory to Bank in its sole judgment: (a) a non-recourse guaranty by W.H. 2, LLC in favor of Bank, guaranteeing all of the Obligations, which guaranty will be secured by a second mortgage granted by W.H. 2, LLC in favor of Bank on certain real property located in Clermont County, Ohio, and (ii) a non-recourse guaranty by Restaurant Management Group, LLC in favor of Bank, guaranteeing all of the Obligations, which guaranty will be secured by a second mortgage in favor of Bank with respect to real property located in H▇▇▇▇▇▇▇ County, Indiana and by a second mortgage in favor of Bank with respect to real property located in M▇▇▇▇▇▇▇▇▇ County, Ohio. Failure of Debtors to comply with the obligations under this Section 2.8 will constitute a Forbearance Default.
Second Mortgages. Simultaneously with the Closing of the Loan, Borrower has delivered to Lender second mortgages on the Marriott Marquis and the Drake Swissôtel in an amount equal to twenty-five percent (25%) of the Allocated Loan Amount for such Individual Properties (together, the “Second Mortgages”). In the event that the Base Profit declines by more than $20,000,000 (as reduced by the product of (1) the Allocated Percentage with respect to any Individual Property that has been the subject of a Partial Defeasance or the reduction in the Allocated Percentage with respect to any Individual Property that has had its Allocated Loan Amount reduced due to the application of Net Proceeds and (2) $20,000,000) below the 1998 Base Profit (as reduced by the product of (1) the Allocated Percentage with respect to any Individual Property that has been the subject of a Partial Defeasance or the reduction in the Allocated Percentage with respect to any Individual Property that has had its Allocated Loan Amount reduced due to the application of Net Proceeds and (2) the 1998 Base Profit), Lender shall have the right to record the Second Mortgages. Within fifteen (15) days after notice from Lender to Borrower that the Second Mortgages will be recorded, Borrower shall deliver to Lender amounts sufficient to pay all recording taxes and other fees necessary to record the Second Mortgages, together with such other items as may be reasonably requested by Lender in connection therewith. Borrower shall also deliver, at Borrower’s expense, a title insurance policy insuring the Lien of each of the Second Mortgages, with coverage in the amount of Second Mortgages and insuring Lender that each of the Second Mortgages creates a valid second lien on the related Individual Property, subject only to the Permitted Encumbrances. In the event that Borrower fails to pay all taxes, fees, title insurance premiums and other expenses with respect to the Second Mortgages pursuant to the provisions of this Section 2.8, all excess cash flow will be deposited into the Second Mortgage Account (as defined in the Cash Management Agreement) until such time as a sufficient amount has been deposited in the Second Mortgage Account for the payment of such expenses. Lender shall have the right, but not the obligation, to apply funds on deposit in the Second Mortgage Account to the payment of any expense payable by Borrower pursuant to this Section 2.8. Provided no Event of Default shall have occurred and be continuing, Lend...
Second Mortgages. With respect to each Mortgage Loan secured by a second lien on the related Mortgaged Property:
(i) either the related first lien does not provide for a balloon payment or the maturity date of the Mortgage Loan with respect to which the related first lien provides for a balloon payment is prior to or concurrent with the maturity date of the mortgage loan relating to such first lien;
(ii) the related first lien on the Mortgaged Property does not provide for negative amortization; and
(iii) either no consent for the Mortgage Loan is required from the holder of the related first lien or such consent has been obtained and is contained in the Mortgage File.
Second Mortgages. With respect to each Mortgage Loan secured by a second lien on the related Mortgaged Property:
(i) if the Loan-to-Value Ratio is higher than 70%, either the related first lien does not provide for a balloon payment or the maturity date of each Mortgage Loan with respect to which a first lien on the related Mortgaged Property provides for a balloon payment is prior to the maturity date of the mortgage loan relating to such first lien;
(ii) the related first lien on any Mortgaged Property with respect to which the related Mortgage Loan secured by a second lien does not provide for negative amortization;
(iii) either no consent for the Mortgage Loan secured by a second lien on the related Mortgaged Property is required by the holder of the related first lien or such consent has been obtained and is contained in the Mortgage File;
(iv) the related first lien is not held by an individual;
(v) the Purchase Price of such Mortgage Loan together with the Purchase Price of Purchased Mortgage Loans subject to then outstanding Transactions secured by a second lien on the related Mortgaged Properties does not exceed 10% of the aggregate Purchase Price for all Mortgage Loans subject to then outstanding Transactions.
Second Mortgages. With respect to each Purchased Mortgage Loan secured by a second lien on the related Mortgaged Property:
(1) if the Loan-to-Value Ratio is higher than 70%, either the related first lien does not provide for a balloon payment or the maturity date of each Purchased Mortgage Loan, with respect to which a first lien on the related Mortgaged Property provides for a balloon payment, is prior to the maturity date of the mortgage loan relating to such first lien;
(2) the related first lien on any Mortgaged Property with respect to which the related Purchased Mortgage Loan secured by a second lien does not provide for negative amortization;
(3) either no consent for the Purchased Mortgage Loan secured by a second lien on the related Mortgaged Property is required by the holder of the related first lien or such consent has been obtained and is contained in the Mortgage File; and
(4) the related first lien is not held by an individual;
Second Mortgages. Borrower shall deliver, or cause Guarantor to deliver, no later than the date hereof, in form and substance reasonably acceptable to Lenders:
(a) A first or, if already subject to a first deed of trust or mortgage, a second deed of trust or mortgage on all real property owned by Borrower or any Guarantor (the "Property"); and
(b) A first or, if already subject to a first security interest, a second security interest in all fixtures now owned or hereafter acquired by Borrower and or Guarantor and used in the operation of the Property and the proceeds thereof; and
(c) A first or, if already subject to a first collateral assignment, a second collateral assignment to Agent of (i) the lease agreement to be dated on or before the date of the deed of trust or mortgage from Borrower/Guarantors covering the property named in subparagraph (a), and (ii) the rentals due under such lease, which lease shall be subordinate to the rights of Agent under its deed of trust or mortgage on such property named in subparagraph (a) and, if applicable, may also be subordinated to the obligations secured by any first collateral assignment of such lease(s), in the case of clauses (a), (b), and (c) above. To the extent permitted under the applicable state law, Lenders expressly agree that, to the extent the amount of the mortgage or property valuation affects the amount of documentary tax due in connection with mortgages on property located in Florida, Georgia and Virginia, the property valuation shall be equal to one hundred twenty-five percent of the sum of: the most recent appraised value plus the value of any improvements less the amount of the current outstanding balance under any prior liens. In exchange for such agreement, Borrower and Guarantor hereby waive any requirement that Lenders marshal assets on property located in Virginia, Florida and Georgia. Notwithstanding the foregoing, and subject to Section 5.3 hereof, Borrower and Guarantor agree to amend the mortgage from time to time, at the request of Lenders, as the property valuation increases over time, due to the decrease in the outstanding balance under a prior lien, the removal of a prior lien, an increase in appraised value of the property or any other circumstance. Notwithstanding the foregoing or anything else in this Agreement to the contrary, neither Borrower nor any Guarantor will be obligated to deliver any deed of trust, mortgage, security interest or collateral assignment described herein to Agent if doing s...
Second Mortgages. Mortgagor will not, without the prior written consent of Mortgagee, mortgage or pledge the premises as security for any other loan or obligation of Mortgagor. If any such mortgage or pledge is entered into without the prior written consent of Mortgagee, the entire Indebtedness may, at Mortgagee’s option, be declared immediately due and payable without notice. Further, Mortgagor shall also pay any and all other obligations, liabilities, or debts that may become liens, security interests, or encumbrances on or charges against the premises for any repairs or improvements that are now or may later be made and shall not, without Mortgagee’s prior written consent, permit any lien, security interest, encumbrance, or charge of any kind to accrue and remain outstanding against the premises, any part, or any improvements, irrespective of whether the lien, security interest, encumbrance, or charge is junior to the lien of this Mortgage. Notwithstanding the above, if Mortgagor purchases and installs, affixes, or places any personal property by way of additions, replacements, or substitutions on the premises under a security agreement for which the lien or title is superior to the lien created by this Mortgage, all the right, title, and interest of ▇▇▇▇▇▇▇▇▇ in and to that personal property, together with the benefit of any deposits or payments made by Mortgagor, shall nevertheless be assigned to Mortgagee and covered by the lien of this Mortgage. Notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇ shall have the right to place a subordinate mortgage on the premises so long as the combined loan to value of the Mortgage and second mortgage does not exceed eighty percent (80%).
Second Mortgages. The Hillsborough Authority's program also contemplates the provision to each borrower of a second mortgage loan to assist with down- payment and other costs. The Jacksonville Authority agrees to purchase any second mortgage loan originated under the program with respect to residences in ▇▇▇▇▇ County, provided that (i) prior to the purchase of such second mortgage loan by the Hillsborough Authority, the Jacksonville Authority shall have the opportunity to review and approve the documentation for the second mortgage loan, and (ii) the Jacksonville Authority designates from time to time a maximum amount for second mortgage loans under the program. The Hillsborough Authority agrees to cause any second mortgage loans originated within ▇▇▇▇▇ County to be serviced pursuant to the Hillsborough Authority's servicing agreement for the program.
Second Mortgages more than 35% of the sum of (i) Borrower's direct lending portfolio (including commercial, residential, and installment loans), plus (ii) Liquid Assets to finance loans secured by second liens on real property;