STATE OF SOUTH CAROLINA ) THIRD LOAN MODIFICATION AND
) EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF AIKEN ) AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE
AND DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made
and executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and XXXXXXX COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("Xxxxxxx" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, MBB Development Associates, an Ohio General Partnership
(hereinafter "MBB Development Associates") executed its certain Promissory Note
("Note") dated June 8, 1988 whereby it promised to pay to the order of New York
Life Insurance Company the sum of Eleven Million Four Hundred Thousand Dollars
($11,400,000.00), or so much thereof as may be advanced, with interest thereon
at the rate of Nine percent (9.0%) per annum as defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain
Mortgage, Assignment of Leases and Rents and Security Agreement ("Mortgage")
recorded on June 7, 1988, in the Office of the Register of Mesne Conveyances for
Aiken County, in Mortgage Book 1052 at Page 198 and Deed Book 1041 at Page 64;
and
WHEREAS, simultaneously with the delivery of the Note and the
Mortgage, MBB Development Associates executed and delivered to Lender an
Assignment of Lessor's Interest in Lease(s) - with Assignment of Rents Income
and Cash Collateral ("Assignment of Leases") recorded in the Office of the
Register of Mesne Conveyances for Aiken County in Book 510 at Page 336 on June
7, 1988; and likewise filed in said office a UCC Financing Statement #88-978
recorded in Mortgage Book 1052 at Page 345 on June 8, 1988; and likewise filed
said UCC Financing Statement in the Office of the Secretary of State for South
Carolina, ("UCC"); and
WHEREAS, MBB Development Associates transferred the real property
encumbered by said Note and subject to the lien of the Mortgage to Xxxxxxx
Companies Income Properties, L.P. I, by general warranty deed recorded July 12,
1988 in Title Book 1046 at Page 151 and by general warranty deed recorded
September 23, 1988 in Title Book 1057 at Page 295; and
WHEREAS, the maturity date of the Note was extended and certain terms
and conditions were modified through that certain Loan Modification and
Extension Agreement and Mortgage Amendment dated effective June 10, 1993 and
recorded September 20, 1993 in the Office of the Register of Mesne Conveyances
for Aiken County, South Carolina in Miscellaneous Book 718 at Page 337 along
with that certain UCC Financing Statement filed in said Office on September 21,
1993, as filing number 19-1453 and also filed in said Office in Mortgage Book
1579 at Page 104 ("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and
certain terms and conditions were modified through that certain Second Loan
Modification and Extension Agreement and Mortgage Amendment dated effective June
10, 1994, and recorded December 29, 1994, in the Office of the Register of Mesne
Conveyances for Aiken County, South Carolina, in Miscellaneous Book Volume 777
Page 324 ("Second Modification:); and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Aiken
Loan"; and
WHEREAS, Xxxxxxx wishes to extend the maturity date of said Aiken
Loan until October 10, 1998, and modify and amend the Aiken Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and Xxxxxxx have agreed to said modifications,
amendments and extension of said Aiken Loan under the terms and conditions
hereafter set forth, and wish to document said modifications, amendments and
extension by the execution and recording of this Agreement; and
WHEREAS, Xxxxxxx and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Seven Million and Fifty Thousand Dollars ($7,050,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 1936 at Page 273 in the
Office of the Register of Mesne Conveyances for Greenville, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Modification recorded in said RMC Office in Book 2442 at Page 240, and was
further modified by the Second Loan Modification and Extension Agreement and
Mortgage Amendment recorded in said RMC Office in Book 2632 at Page 104, and
which is being further modified and amended simultaneously herewith (the
"Greenville Loan"); and
WHEREAS, Xxxxxxx and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of One Million Six Hundred Thousand and 00/100 Dollars ($1,600,000.00) dated
June 2, 1988, as secured by a Mortgage recorded in Mortgage Book 337 at Page
133 in the Office of the Register of Mesne Conveyances for Georgetown County,
South Carolina (the "RMC Office"), together with all related loan documents
which Mortgage was modified by that certain Loan Modification and Extension
Agreement and Mortgage Amendment recorded in said RMC Office in Mortgage Book
642 at Page 299, and was further modified by that certain Second Loan
Modification and Extension Agreement and Mortgage Amendment recorded in said RMC
Office in Mortgage Book 742 at Page 248, and which is being further modified
simultaneously herewith (the "Georgetown Loan").
NOW, THEREFORE, Lender and Xxxxxxx in consideration of the sum of One
and 00/100 Dollar ($1.00), the principal reduction of the Aiken Loan by the
amount of Three Hundred Thousand and 00/100 Dollars ($300,000.00), the
additional cross-collateralization between and among the Aiken Loan, the
Greenville Loan and the Georgetown Loan, and other good and valuable
consideration paid by Xxxxxxx, the mutual covenants herein contained, the
receipt and sufficiency of which is hereby acknowledged by all parties, do
hereby agree to the modifications andamendments of the terms for payment of
the indebtedness evidenced by said Note, and to the terms of collateral security
for repayment thereof, as secured by said Mortgage and other Aiken Loan
documents, so that the same shall be due and payable as follows, and further
agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated
into and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding
principal balance of the Aiken Loan, after deducting a principal pay down of
Three Hundred Thousand and 00/100 Dollars ($300,000.00) made simultaneously
herewith, is Ten Million Eight Hundred Sixty-Six Thousand Four Hundred Ninety-
One and 18/100 ($10,866,491.18) as of the date hereof. Concurrently with the
execution of this Agreement, Xxxxxxx shall remit payments to Lender of
$53,040.83, representing the per diem interest for the period from September 10,
1995 through September 28, 1995, and $29,882.85 representing the per diem
interest for the period from September 29, 1995 through October 9, 1995, due and
payable October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date
of the Aiken Loan shall be revised from June 10, 1995 to October 10, 1998.
Moreover, Xxxxxxx shall have the option to renew the existing loan balance for
an additional (2) years at an interest rate to be determined by Lender in its
sole and absolute discretion, and the amortization schedule shall be recast to
reflect a fifteen (15) year amortization schedule provided that (i) neither the
Aiken Loan nor the Greenville Loan or the Georgetown Loan is in default, (ii)
the loan to value does not exceed eighty-five percent (85%), and (iii) the debt
coverage ratio is greater than or equal to 1.10, all of which to be determined
by Lender in its sole and absolute discretion. Xxxxxxx shall notify Lender of
its intention to renew the loan not earlier than one hundred twenty (120) days
nor later than ninety (90) days prior to the New Maturity date of the Aiken
Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at
Maturity. The interest rate for said Aiken Loan shall remain at Nine percent
(9.0%) per annum. The monthly installments shall be in the amount of
$101,759.00, due on the 10th day of each month, commencing with such
installments upon the tenth day of November 1995, and continuing thereafter on
the tenth day of each month to and including October 1998, at which time the
principal balance and all other sums remaining unpaid on the Aiken Loan shall
be due and payable.
5. Prepayment Provision. It is agreed that the Note for the Aiken
Loan shall be modified to provide the following prepayment privilege:
Upon ninety (90) days written notice to New York Life,
Maker may prepay the Note in full on any monthly
installment due date provided there is paid, in addition
to interest accrued to the date of such prepayment, a
prepayment fee equal to the difference between the Loan
Interest Rate and the Yield on U.S. Treasury Notes for
a term equal to the remaining original loan term times
the outstanding principal balance of the Aiken Loan at
the time of such prepayment multiplied by the number of
years and any fraction thereof on the loan term as if
there had been no prepayment. In no event shall the
prepayment fee be less than one percent (1%). The
prepayment fee is to be computed on the unpaid principal
balance at the time of such prepayment.
In the event the outstanding principal balance hereof
shall become due and payable as a result of (a) an Event
of Default (as such term is defined in the Mortgage)
causing the acceleration under this Note or the Loan
Documents, which Event of Default shall be conclusively
deemed to be a willful default for purposes of avoiding
the prepayment fee to which Holder is entitled; (b) the
exercise by Maker or any other party having the right to
redeem or to prevent a foreclosure of the Secured
Property of any right of redemption or repayment under
foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration
by Holder as a result of the sale or further encumbrance
of the Secured Property in violation of the applicable
provisions of the Mortgage; or (d) a casualty or
condemnation with respect to the Secured Property; then,
in such event, Maker shall pay the prepayment fee and to
the extent permitted by law, such prepayment fee shall
be calculated in the same manner as specified above;
provided that in the event such prepayment fee is
construed to be interest under the laws of the State of
South Carolina in any circumstance, such payment shall
not be required to the extent that the amount thereof,
together with other interest payable hereunder, exceeds
the maximum interest that may be lawfully charged under
the laws of the State of South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly
understood and agreed that the occurrence of a default under the Greenville
Loan or the Georgetown Loan, or any document securing either of them, or a
default under this Aiken Loan, for which no right to notice or cure shall exist,
shall constitute a cross default under each of the Greenville Loan, the
Georgetown Loan and the Aiken Loan, and the rights of enforcement and other
rights and remedies applicable to default shall be fully operative and
applicable as to each and all of said Greenville Loan, Georgetown Loan and Aiken
Loan. It is further understood and agreed that all collateral now or hereafter
securing the Greenville Loan, the Georgetown Loan and the Aiken Loan shall also
secure each of the Greenville Loan, the Georgetown Loan and the Aiken Loan.
The Mortgage and other Loan Documents for the Aiken Loan shall hereby be amended
to add the description of the collateral from each of the Greenville Loan and
the Georgetown Loan to the collateral (Secured Property) securing the Aiken
Loan, which descriptions are as set forth on Exhibit "A" and "B" hereto,
respectively, and which are incorporated into and made a part of this
Agreement.
7. Insurance. Section 1.03(F)(2) of the Aiken Mortgage is hereby
deleted and substituted in lieu thereof is the following revised Section
1.03(F)(2):
(2) In the event of any such damage or
destruction, Mortgagee shall have the option in its sole
and absolute discretion and without regard to the
adequacy of its security hereunder of applying all or
part of the insurance proceeds (i) to the Indebtedness,
whether or not then due, in the inverse order of
maturity, or (ii) to the repair or restoration of the
Improvements, or (iii) to cure any then current default
under this Mortgage or the other Loan Documents, (iv) to
reimburse the costs and expenses of Lender in connection
with the recovery of such insurance proceeds, or (v) any
combination of the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event
of any destruction to the Premises by fire or other
casualty (except for any destruction which occurs during
the last six (6) months of the loan term), the insurance
proceeds shall be made available to the Mortgagor for
repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and
disbursement of such proceeds and any other deductions
Mortgagee is entitled to under subsection (F)2 above,
provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of
Mortgagee's Architect as to the cost of the work done
and the conformity of the work to plans and
specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to
Mortgagee that there are no liens arising out of the
reconstruction or otherwise. Notwithstanding the above,
a portion of the proceeds may be released prior to the
commencement of reconstruction to pay for items approved
by Mortgagee in its sole discretion. Disbursements
shall be made within ten (10) business days after a
request by Mortgagor. No payment made prior to the
final completion of work shall exceed ninety percent
(90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said
proceeds remaining with the Mortgagee must be at least
sufficient to pay for the cost of completion of the work
free and clear of liens. Final payment shall be upon a
certification of Mortgagee's Architect as to completion
in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall
certify to Mortgagee that the damaged or destroyed
portion of the Secured Property has been put in a state
of repair equivalent to or better than that existing
prior to the date of such fire or other casualty, the
work shall be deemed completed. With Mortgagee's prior
written consent, which may be granted or withheld in
Mortgagee's sole discretion; any certification required
to be made by an architect or registered engineer may be
made by a reputable contractor approved by Mortgagee.
The balance of the insurance proceeds so deposited with
Mortgagee after full disbursement in accordance with the
terms herein, at the sole option of Mortgagee, shall be
either (a) returned to Mortgagor, it being understood
that such obligation or reimbursement shall not exceed
the amount of insurance proceeds for such restoration
and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of
maturity whether or not such installments shall be due
and payable.
(7) In all cases where any destruction to the Secured
Property by fire or other casualty occurs during the
last six (6) months of the loan term, or in Mortgagee's
sole judgment, Mortgagor is not proceeding with the
repair or restoration in a manner that would entitle
Mortgagor to have the proceeds disbursed to it, or for
any other reason Mortgagee determines in its sole
judgment that Mortgagor shall not be entitled to such
proceeds pursuant to the terms of this Mortgage,
Mortgagee shall have the options set forth in subsection
F(2) above.
(8) Under no circumstances shall Mortgagee become
personally liable for the fulfillment of the terms,
covenants and conditions contained in any of the Leases
or obligated to take any action to restore the Secured
Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and
1.13(B) of the existing Aiken Mortgage are hereby deleted in their entirety and
in lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties &
Covenants.
To the best of Mortgagor's actual knowledge,
Mortgagor represents, warrants and covenants that
Hazardous Materials are not being used, on, from, or
affecting the Secured Property in any manner and, to the
best of Mortgagor's actual knowledge, no prior owner of
the Secured Property or any tenant, subtenant, prior
tenant or prior subtenant has used "Hazardous Materials"
as such term is hereinafter defined, on, from, or
affecting the Secured Property, in any manner.
Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all
Environmental Laws (as hereafter defined); (ii) that
there are no conditions existing currently or reasonably
likely to exist during the term of this Mortgage which
would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any
Environmental Laws as such term is hereinafter defined,
or assertions thereof, or which require or are likely to
require cleanup, removal, remedial action or other
response pursuant to Environmental Laws by Mortgagor;
(iii) that Mortgagor is not a party to any litigation or
administrative proceedings, nor so far as is known by
Mortgagor is any litigation or administrative proceeding
threatened against it, which asserts or alleges that
Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove
or take remedial or other responsive action due to the
disposal, depositing, discharge, leaking or other
release of any hazardous substances or materials; (iv)
that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation
related to or arising out of Environmental Laws or has
been named or listed as a potentially responsible party
by any governmental body or agency in a matter arising
under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or
operation of the Secured Property are required under
Environmental Laws relative to the Secured Property, or
any portion of the Secured Property; and, (vi) to the
best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent
inquiry have there ever been materials stored,
deposited, treated, recycled or disposed of, on, under
or at the Secured Property (or tanks or other facilities
thereon containing such materials) which materials or
contained materials, if known to be present at the
Secured Property or present in soils or ground water,
would require cleanup, removal or some other remedial
action under Environmental Laws. Mortgagor shall
promptly advise Mortgagee in writing of any Hazardous
Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or
disposal of any Hazardous Materials in, on, under or
about the Secured Property, or that any condition
described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan
Instruments, the term, "Environmental Laws" shall mean
the Comprehensive Environmental Response Compensation
and Liability Act as amended, 42 U.S.C. Section 9601, et
seq.; the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq.; any so-called "Superfund"
or "Superlien" law or any other federal, state, local
and foreign laws or regulations, codes, plans, orders,
decrees, judgments, injunctions, notices or demand
letters issued, promulgated or entered thereunder
relating to pollution or protection of the environment,
(collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation
of land and waterways and Environmental Laws relating to
emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the
environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to
worker health and safety or public health and safety, in
each case material to the ownership or operation of the
Secured Property. Neither the Mortgagor nor, to the
best knowledge and belief of the Mortgagor, any other
person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed,
held, located or disposed of, on, under or at the
Secured Property or any part thereof, or any other real
property legally or beneficially owned (or any interest
or estate which is owned) by the Mortgagor in any state
now or hereafter having in effect a so-called
"Superlien" law or ordinance or any part thereof (the
effect of which would be to create a lien on the Secured
Property to secure any obligation in connection with the
real property in such state), and neither the Secured
Property, nor any part thereof, nor any other real
property legally or beneficially owed (or any interest
or estate therein which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called
"Superlien" law or ordinance or any part thereof, has
ever been used (whether by the Mortgagor, to the best
knowledge of the Mortgagor, by any other person) as a
dump site or storage (whether permanent or temporary)
site for any Hazardous Materials. Mortgagor further
represents and warrants that neither Mortgagor nor, to
the best knowledge and belief of Mortgagor, any other
person has ever caused or knowingly permitted any
asbestos or under-ground, storage facility to be located
on the Secured Property. Mortgagor further represents
and warrants that neither Mortgagor nor, to the best
knowledge or belief of Mortgagor having made no
investigation, any other person has discovered any
occurrence or condition on any real property adjoining
or in the vicinity of the Secured Property that could
cause the Secured Property or any part thereof to be
subject to any restrictions on the ownership, occupancy,
transferability or use of the Secured Property under any
federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend,
protect and hold Mortgagee, its partners, employees and
agents, and any successor, successors, or assigns to
Mortgagee's interest in the chain of title to the
Secured Property, harmless from and against any and all
losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs,
expenses and claims of any and every kind whatsoever
paid, incurred or suffered by or asserted against
Mortgagee including without limitation, (a) any loss in
value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or
necessary repair, cleanup or detoxification of the
Secured Property, and the preparation and implementation
of any closure, remedial or other required plans; and
(d) all reasonable costs and expenses incurred by
Mortgagee in connection with clauses (a), (b) and (c)
hereof, including but not limited to, reasonable
attorneys' fees and fees of any and all other
consultants, experts and engineers and witnesses (expert
and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the
escape, seepage, leakage, spillage, emission, discharge
or release from, the Secured Property or any other
property legally or beneficially owned (or any interest
or estate which is owned) by Mortgagor of any Hazardous
Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under,
through or as a result of any Environmental Laws
relating to or imposing liability or standards of
conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property
(including, without limitation, the cost of relocating
tenants and the cost of removal) regardless of whether
caused by, or within the control of, Mortgagor, or any
predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third
persons at any time, occupying or present on the Secured
Property, or arising out of or related to any breach of
Mortgagor's obligations under this Mortgage. Any of
such activities were or will be undertaken in accordance
with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and
includes any flammable explosives, radioactive
materials, or hazardous, toxic or dangerous waste,
substance or related material including, but not limited
to, substances defined as such in (or for purposes of)
the Environmental Laws regulating, relating to, or
imposing liability or standards of conduct concerning,
any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment
of all sums due under the Loan Documents and the
discharge and satisfaction of this Mortgage of transfer
of title to Mortgagee or any third party by foreclosure
or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured
Property in compliance with and shall not cause or
permit the Secured Property to be in violation of any
Environmental Laws or any federal, state or local laws
relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but
not limited to, soil and ground water conditions.
Mortgagor shall not use, generate, manufacture, store,
dispose or permit to exist in, on, under or about the
Secured Property any Hazardous Material. Mortgagor
hereby agrees at all times to comply fully and in a
timely manner with, and to cause all of its employees,
agents, contractors and subcontractors and any other
persons occupying or present on the Secured Property to
so comply with all Environmental Laws applicable to the
use, generation, handling, storage, treatment,
transport, storage, manufacture and disposal of any
Hazardous Material now or hereafter located or present
on or under the Secured Property, including, but not
limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent,
Mortgagor shall not take any remedial action in response
to the presence of any Hazardous Materials, on, under,
or about the Secured Property, nor enter into any
settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims,
which remedial action, settlement, consent or compromise
might, in Mortgagee's sole judgment, impair the value of
Mortgagee's security hereunder; provided, however, that
Mortgagee's prior consent shall not be necessary in the
event that the presence of any Hazardous Material on,
under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any
individual or is of such a nature that an immediate
remedial response is necessary and it is not possible to
obtain Mortgagee's consent before taking such action,
provided that in such event Mortgagor shall notify
Mortgagee as soon as practicable of any action so taken.
Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a
particular remedial action is ordered by a court of
competent jurisdiction, or (b) Mortgagor establishes to
the reasonable satisfaction of Mortgagee that there is
no reasonable alternative to such remedial action which
would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the
obligation, to join and participate in, as a party if it
so elects, any legal proceeding or actions initiated by
any person or entity in connection with any Hazardous
Materials claims and in such case, to have its
reasonable attorneys' fees and costs incurred in
connection therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Aiken Mortgage shall be amended
by adding at the end of the existing sentence, the additional words "at
Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Aiken Mortgage
is amended by adding at the conclusion thereof the following additional
provisions:
Mortgagor shall comply with any and all state and
federal legislation relating to environmental protection
and such other legislation, rules and regulations as are
in or may come into effect and apply them to Mortgagor,
Mortgagee, this Loan Transaction or the Secured Property
or occupancy users thereof, whether as lessees, tenants,
licensees or otherwise. Mortgagor does agree to
indemnify and hold Mortgagee harmless against any and
all claims, costs or expenses relating to such
environmental protection, real estate taxes, insurance
premiums, as well as fraud, material misrepresentation
or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan
Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Aiken
Mortgage is modified by adding to the initial paragraph at the conclusion
thereof, the following additional provisions:
For purposes of this paragraph, the following
shall also be deemed to constitute a transfer of the
Secured Property, whether made directly or through an
intermediary:
(i) If Mortgagor is a corporation, a transfer or
disposition of more than fifty percent (50%) of the
outstanding voting stock of Mortgagor; or
(ii) If Mortgagor is a partnership, a transfer of
disposition of any interest of any general partner in
Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions,
Capital Improvements and Debt Service Shortfall Escrow Account. Xxxxxxx
covenants and agrees that within fifteen (15) days following the end of each
calendar quarter commencing January 1, 1996, Xxxxxxx shall deposit or cause to
be deposited into an account maintained at a commercial bank (the "Depository")
acceptable to Lender all Net Cash Flow as hereinafter defined, generated from
the use and operation of the Secured Property, during the immediately preceding
calendar quarter (the "Escrow Account"). Proof of such deposit, in the form of
either a copy of the deposit slip or a statement from the Depository, shall be
submitted to Lender no later than twenty (20) days following the end of each
calendar quarter. Provided that the Aiken Loan is not in default, the funds on
deposit in the Escrow Account shall from time to time be applied by Depository
or disbursed to Xxxxxxx to pay for tenant improvements, leasing commissions,
capital improvements and/or debt service shortfall. Additionally, a maximum
amount calculated at two percent (2%) of the total collected revenue shall be
deducted from Net Cash Flow to be applied to the payment of partnership
operating costs.
"Income" shall mean all rents, income and profits received on a cash
basis by Xxxxxxx from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
Expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter,
Xxxxxxx shall submit to Lender a statement of Net Cash Flow for the preceding
quarter, certified to be true and accurate by an officer of Xxxxxxx.
Additionally, within fifteen (15) days after the end of each calendar year
Xxxxxxx shall submit to Lender a statement of New Cash Flow for the preceding
year, certified to be true and accurate by an officer of Xxxxxxx.
Funds in the Escrow Account are to be used for costs incurred
relating to tenant improvements, leasing commissions, capital improvements and
potential debt service shortfall. Additionally a maximum amount calculated at
two percent (2%) of the total collected revenue may be deducted from Net Cash
Flow to be applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner,
using materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear
of any claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory
to Lender and by a Depository acceptable to Lender as
assurance of the performance of the work. Interim
disbursements (each a "Disbursement") of the Escrow Account
shall be made to Xxxxxxx for not less than Five Thousand and
00/100 Dollars ($5,000.00) per request and no more often than
one time per calendar quarter. Lender shall direct Depository
to make Disbursements conditioned upon the following:
(1) There is no default under this Aiken Loan, the
Greenville Loan or the Georgetown Loan and Xxxxxxx shall
deliver to Lender a certificate to such effect signed by
an authorized officer of Xxxxxxx;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy
Leases and Certified Rent Roll" contained in the
Mortgage Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall
receive evidence of satisfactory completion of tenant
improvements, capital improvements, and payment of leasing
commissions relating to the previous Disbursement. Such
evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by Xxxxxxx.
(D) All cost and expenses associated with the Escrow Account are
to be borne by Xxxxxxx. In the event of a default in the Loan
Documents, Lender in its sole discretion will either apply the
funds in reduction of principal or apply the funds towards any
outstanding tenant improvement costs, leasing commissions or
capital improvements.
Xxxxxxx does hereby designate First Union National Bank of South
Carolina, One Insignia Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000; X.X.
Xxx 0000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 as the proposed Depository for
Lender's approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage,
Assignment of Leases, UCC, First Modification and Second Modification, except
as expressly modified, altered or extended by this Agreement, shall be and
remain in full force and effect, and all of the terms of said documents as well
as those additional terms created hereby have been assumed by Xxxxxxx.
15. Borrower's Covenant of Payment and Compliance. Xxxxxxx, in
consideration of the above modifications, amendments and extension and of One
and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency of which
is hereby acknowledged), and of the mutual covenants and agreements herein
contained, does hereby covenant and agree to pay said principal sum, and
interest as set forth in this Agreement, and to comply with the other terms of
said Note, Mortgage, and Assignment of Leases, First Modification, Second
Modification and the provisions of this Agreement.
16. Effect of Agreement. The Parties hereto agree that the
execution of this Agreement shall not release any guarantor, maker or other
party of said Note or Mortgage or any undertaking in connection therewith, nor
shall this Agreement effect any release of any collateral given at any time
to secure payment of said Note or said other undertaking.
17. Xxxxxxx Representation as to Consent. Xxxxxxx represents that
no consent of any person, firm or corporation, not a party hereto, is required
for the effectiveness of this Agreement and Xxxxxxx agrees to indemnify and hold
harmless the Lender from or against any and all loss, damage or liability
whatever, including attorney's fees, arising out of the failure to obtain
consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean
or be construed to mean to call for a rate of interest in excess of that allowed
to be charged by the laws of the State of South Carolina; and that if the
provisions hereof should be determined to call for a rate of interest in excess
of the maximum rate allowed by said laws as to any person, firm or corporation,
then immediately or without necessity of any further action, the interest rate
herein provided shall, as to such person, firm or corporation, be immediately
reduced by that amount necessary to eliminate said excess .
19. Binding Nature of Agreement. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto, their heirs, successors
and assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxxx X. Xxxxxx
/s/ Xxx Xxxxxxxx Attest: /s/ Xxxxxxx Salabella
XXXXXXX:
Xxxxxxx Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: Xxxxxxx Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxxxx X. Xxxxxx Attest: /s/ Xxxxxx Xxxxxxxx
Attest: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Assistant Secretary
STATE OF NEW YORK
A C K N O W L E D G E M E N T
COUNTY OF NEW YORK
I Xxxxxxx Xxxxxxx, do hereby certify that Xxxxxxxx X. Xxxxxx, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that Xxxxxxxx X.
Xxxxxx, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation to
the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ Xxxxxxx Xxxxxxx (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA
A C K N O W L E D G E M E N T
COUNTY OF AIKEN
I, Xxxxxxxx X. Xxxxxx, do hereby certify that Xxx X. Xxxx, Xx., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of Xxxxxxx Management Limited Partnership,
General Partner of Xxxxxxx Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that Xxx X. Xxxx, Xx., a duly authorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of Xxxxxxx Management Limited Partnership, General Partner of Xxxxxxx Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29th day of September, 1995.
/s/ Xxxxxxxx X. Xxxxxx (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01
