NOTE AND MORTGAGE MODIFICATION AND ASSUMPTION AGREEMENT
This Note and Mortgage Modification and Assumption Agreement
(hereinafter this "Agreement") made as of the 30th day of November, 1998, by and
among:
KEYDOCROM, INC., a corporation duly organized, validly
existing and in good standing under the laws of the State of New
Jersey, having offices at 000 Xxxx Xxxxxx, X.X. Xxx 000, Xxxxxxx, Xxx
Xxxxxx 00000 ("Keydocrom") and OHIO KEY I, LNC. and OHIO KEY II, INC.,
both corporations duly organized, validly existing and in good
standing under the laws of the State of Florida, both having a mailing
address of 000 Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxx 00000
(collectively, Ohio Key I, Inc. and Ohio Key III, Inc. hereinafter
will be referred to as "Ohio Key" and hereinafter Keydocrom and Ohio
Key shall be collectively referred to as the "Borrowers") and XXXXXX
XXXXXXXX. an individual having an address at 000 Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Original Guarantor") and XXXX XXXX
KNORRI JR., an individual having an address at 000 Xxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxx 00000 (the "New Guarantor")(collectively, the
Original Guarantor and the New Guarantor shall be collectively
referred to as the "Guarantors");
and
PNC BANK, NATIONAL ASSOCIATION. having an office at Xxx Xxxxx
Xxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 ("Lender").
WITNESSETH
WHEREAS, the Lender is the present owner and holder of a certain
Promissory Note (the "Note") executed by Keydocrom, as maker and payable to
Midlantic National Bank (the predecessor to the Lender), which Note is dated
October 20, 1986. evidencing a loan :he "Loan") in the. original principal
amount of S3,500,000: and
WHEREAS, the Note is secured by, among other things, that:
certain Purchase Money Mortgage and Security Agreement (the "First
Mortgage") dated October 2(i. 1986. which First Mortgage relates to
the lands and premises situate. king and being in the Township of West
Windsor, County of Xxxxxx, and State of New Jersey as particularly
described in the First Mortgage (hereinafter referred to as the
"Premises') recorded on October 21. 1986 in Book 2089 of Mortgages,
page 672 et sea. in the Xxxxxx County Clerk's Office. which First
Mortgage was modified by a certain (a) Modification of Note and
Mortgage and Building Loan Agreement (the "First Modification
Agreement") dated as of August 1987, and recorded on August 2, 1987 in
Book 174 at page 6l et seq. in the Xxxxxx County Clerk's Office. tb)
Modification of Note and Mortgage (the "Second Modification
Agreement") dated as of January 3, 1991. and recorded on February
7,1991 in Book 193 at Page 990 et in the Xxxxxx County Clerk's Office.
(c) Note and Mortgage Modification and Extension Agreement (the "Third
Modification Agreement") dated as of June 29, 1993, and recorded on
July 27, 1993 in Book 220 at Page 149 et sec. in the Xxxxxx County
Clerk's Office, and (d) Fourth Note and Mortgage Modification and
Extension Agreement (the "Fourth Modification Agreement") dated as of
June 29, 1998 and about to be recorded in the Xxxxxx County Clerk's
Office (the First Mortgage, as modified by the First Modification
Agreement, the Second Modification Agreement, the Third Modification
Agreement, and the Fourth Modification Agreement, is hereinafter
referred to as the "Mortgage"); and
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WHEREAS, the Note is further secured by a certain Assignment
of Leases and Rents dated as of October 20, 1986 and recorded on
October 21, 1986 in Deed Book 2089, page 687, in the Xxxxxx Country
Clerk's Office, which Assignment of Leases and Rents was restated and
amended from time to time ("Assignment of Leases"); and
WHEREAS, at the time of the execution of the First
Modification Agreement, the Loan was increased from $3,500,000 to a
principal amount of $6,000,000; and
WHEREAS, pursuant to that certain Guaranty of Note and
Mortgage dated August, 1997 (the "Original Guaranty") the Original
Guarantor (as well as two other individuals who have since been
released as guarantors of the Loan) guaranteed all obligations and
liabilities owing to the Lender in connection with the Loan; and
WHEREAS, in addition to the foregoing, the Loan is further
secured by various other collateral, all as more particularly
described in the loan documentation and the various modification
agreements; and
WHEREAS, for purposes hereof, the Note, Mortgage, Assignment
of Leases, the Original Guaranty and all other documents. instruments
and agreements executed in connection with the Loan, as modified from
time to time shall be collectively referred to as the Loan Documents";
and
WHEREAS, the Keydocrom is the current owner of the fee simple
title to the Premises; and
WHEREAS, Keydocrom has requested that Lender, inter alia. (i)
waive the due-on-sale provision in the existing Loan Documents; (ii)
permit the assumption of all obligations under the Loan by Ohio Key so
as to allow Ohio Key sufficient time to secure permanent financing
with another lender; (iii) waive the prohibition against secondary
financing from the date hereof until the Maturity Date, so as to allow
Ohio Key to pledge to Keydocrom a second mortgage lien on the Premises
as security for purchase money financing in the amount of S4.K"JO,000;
and (iv) approve Xxxx Xxxx Xxxxx. Jr. as new Guarantor of the Loan, in
addition to the Original Guarantor, for the remaining term of the
Loan, all upon the terms and conditions as are more fully set forth
herein.
NOW, THEREFORE. in consideration of the mutual promises
contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby' acknowledged, the parties
hereto agree as follows:
1. PRESENT PRINCIPAL BAlANCE - The Borrowers and Guarantors agree that as
of November 30th 1998, the outstanding principal balance of the Loan
is S 1,000,000, reduced from S3, 190,412 by payment of even date
herewith in the amount of S2,190,412 by Ohio Key to Lender. It is
expressly understood and agreed that in the event that, for whatever
reason, the Lender shall not receive such $2,190,412 in good and
available funds on or before the end of the business day on November
30, 1998, the terms and provisions of this Agreement shall not be
effective.
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2. ASSUMPTION OF LOAN OBLIGATIONS - Ohio Key hereby assumes all
obligations and liabilities owing to the Lender in connection with the
Loan as such obligations and liabilities are set forth in the Loan
Documents. Ohio Key hereby agrees that it is fully obligated to the
Lender under the terms and provisions of the Loan Documents as if such
Loan Documents had originally been executed by Ohio Key. Not by way of
limitation, Ohio Key specifically assumes the obligation to make
payments of principal and interest in the amounts, at the times, and
at the rate as set forth in the Note. Ohio Key hereby restates and
remakes on behalf of the Lender each and every representation,
covenant, warranty and all other provisions contained in the Loan
Documents. It is expressly understood and agreed that each of the
Guarantors, the individual entities which comprise Ohio Key and
Keydocrom shall be jointly and severally liable for all obligations
and liabilities owing to the Lender in connection with the Loan.
3. MATURITY DATE - The Maturity Daze of the Loan is June 29, 1999.
Nothing contained herein shall be construed as to extend the Maturity
Date of the Loan beyond such date. The Borrowers and the Guarantors
understand and agree that each is jointly and severally liable for the
payment in full of all outstanding principal, interest, fees and
expenses owing to the Lender on June 29, 1999.
4. NEW GUARANTOR AND REPRESENTATIONS OF NEW GUARANTOR -
(a) Pursuant to that certain Guaranty and Suretyship Agreements of
even date herewith executed and delivered by the New Guarantor
in favor of Lender (referred to herein collectively as the
"New Guaranty"), the New Guarantor has guaranteed all
obligations and liabilities owed to the Lender by the
Borrowers, including, without limitation, all obligations and
liabilities owing the Lender in connection with the Loan. It
is understood and agreed that the execution and delivery of
such New Guaranty has materially induced the Lender to permit
the modification and assumption the Loan by Ohio Key and that
the Lender would not have entered into this Agreement but for
the execution and delivery c~f such New Guaranty.
(b) The New Guarantor is a shareholder of Ohio Key. As such. the
New Guarantor has derivatively benefitted from the
modification and assumption of the Loan by Ohio Key. and the
New Guarantor would have been materially and adversely
affected in the event that the Lender elected not to allow for
the modification and assumption of the Loan by Ohio Key. The
New Guarantor therefore represents that it has materially
benefitted from the modification and assumption of the Loan by
Ohio Key and that it has received substantial, adequate and
material consideration for the execution and delivery of the
New Guaranty.
5. REAFFIRMATION OF OBLIGATIONS OF KEYDOCROM AND ORIGINAL GUARANTOR -
(a) Nothing contained herein shall be construed so as to
release either Keydocrom or the Original Guarantor from their
respective obligations and liabilities to the Lender under or
in connection with the Loan. It is expressly understood and
agreed that the Lender has not released either Keydocrom or
the Original Guarantor from such obligations and liabilities.
(b) Keydocrom and the Original Guarantor hereby consent to
all of the terms, provisions and conditions of this
Agreement, and each agrees that nothing in this Agreement in
any way impairs or lessens the respective liability
of Keydocrom or the Original Guarantor under the Original
Guaranty or any of the other Loan Documents, as applicable.
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All provisions of the Original Guaranty heretofore executed
by the Original Guarantor are hereby reaffirmed and confirmed
and given again in this instrument as if each such provision
were herein set forth at length.
6. LENDER'S CONSENT - Subject to the terms and conditions set forth
herein, Lender hereby consents to (i) waive the due-on-sale provision
in the existing Loan Documents so as to permit the sale of the Premises
to Ohio Key, (ii) permit the assumption of the Loan by Ohio Key as set
forth herein, (iii) waive the prohibition against secondary financing
so as to permit Ohio Key to pledge to Keydocrom a second mortgage lien
on the Premises as security for purchase money financing in the amount
of $4,000,000; and (iv) Xxxx Xxxx Xxxxx, Xx. becoming new guarantor of
the Loan, in addition to the Original Guarantor.
7. NON-WAIVER BY LENDER - The Borrowers and Guarantors confirm and
acknowledge that the agreement of Lender hereunder shall not constitute
a waiver of any rights of Lender under the Loan Documents, and shall
not constitute a waiver of its rights of approval or objection, in the
manner provided in the Loan Documents, to any other similar future
transaction. Further, nothing contained herein shall be construed so as
to obligate the Lender to consent to any further transfers of the
Premises, any further Loan assumptions, any further secondary liens on
the Premises, or any other matters contemplated herein.
8. COVENANTS AND REPRESENTATIONS OF OHIO KEY -
(a) Each of the entities which comprise Ohio Key is duly
organized, validly existing and in 200d standing under the
laws of the State of Florida. Each of such entities has duly
authorized the execution and delivery of this Agreement and
all documents in connection herewith. and has obtained any
and all necessary consents in order to purchase the Premises
and assume the Loan obligations. Further, Ohio Key has
obtained all permits, licenses and approvals from all
applicable governmental entities in order to lawfully
purchase the Premises and operate the same as a hotel other
than approval from the New Jersey Department of Community
Affairs, which approval has been applied for and will be
forthcoming in due course. Finally, Ohio Key will obtain,
within 45 days from the date hereof, any and all consents or
approvals from Best Western International, Inc. in order to
continue to operate the Premises as a Best Western.
(b) Within forty-five (45) days of the date hereof, Ohio Key
shall provide the Lender with copies of Certificates allowing
Ohio Key to transact business in New Jersey.
(c) It was originally contemplated that Xxxxx X. Xxxxxxxx would
become a shareholder and officer of Ohio Key and that he
would guarantee the Loan prior to the closing of this
Agreement. The Lender, however, has been advised immediately
prior to the date hereof that Xxxxx X. Xxxxxxxx will not
become a shareholder and officer of Ohio Key and will not
guarantee the Loan, prior to the closing of this Agreement.
In the event that Xxxxx X. Xxxxxxxx becomes a shareholder and
officer of Ohio Key, the Borrowers and Guarantors hereby
agree that Xxxxx X. Xxxxxxxx, upon the request of the Bank,
shall become an additional guarantor of the Loan.
9. ACCOUNTS FROM PREMISES - As further security for the Loan, the
Borrowers hereby pledge to the Lender all of their right, title and
interest in and to all accounts arising from the operation of the
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Premises, including without limitation, all accounts arising from the
renting of rooms, the food and beverage operations at the Premises, and
any other accounts now and hereafter arising from the operation of the
Premises as a hotel/motel.
10. SECOND LIEN: CROSS DEFAULT -
(a) The Lender hereby consents to Ohio Key's pledging to Keydocrom
a second mortgage lien on the Premises as security for
purchase money financing in the amount of $4,000,000 (the
"Second Lien"); provided, however, it is agreed that the
Second Lien is subject and subordinate to the Mortgage.
(b) The Borrowers and Guarantors and the Lender hereby agree that
the occurrence of an event of default (subsequent to the
giving of any required notice and/or the expiration of any
applicable cure period) under the Second Lien shall
automatically and immediately constitute an event of default
(without the requirement of giving any further notice or the
expiration of any cure period) under the Mortgage and all
other Loan Documents.
11. AUTHORITY AND ENFORCEABILITY - The Borrowers and Guarantors represent
and warrant to Lender that the execution of this Agreement. the
delivery by the Borrowers and Guarantors to Lender o fall monies,
items and documents provided for herein, the Borrowers' and
Guarantors' performance hereof and the transactions contemplated
hereby have been duly authorized by all requisite action on the part
of the Borrowers and Guarantors. This Agreement constitutes the valid
and binding obligation of the Borrowers and Guarantors and is
enforceable against the Borrowers and Guarantors in accordance with
its terms.
12. NO DEFENSE(S). SET-OFF(S) OR COUNTERCLAIM(S) - The Borrowers and the
Guarantors represent and warrant to Lender that they have no
defenses), set-off(s) or counterclaim(s) of any kind or nature
whatsoever against Lender with respect to the Loan Documents or any
obligations thereunder, or any action previously taken or not taken by
Lender with respect thereto or with respect to any computation of any
adjustable interest rate or with respect to any security interest,
encumbrance, lien or collateral in connection therewith to secure the
outstanding indebtedness under the Loan Documents.
13. AMENDMENT - This Agreement shall not be amended or modified in any way
except by an instrument in writing executed by each of the parties
hereto.
14. CHOICE OF LAW - This Agreement shall be governed and construed by the
laws of the State of New Jersey.
15. ENTIRE AGREEMENT - This Agreement constitutes the entire agreement
between the parties and there are no agreements, understandings,
warranties or representations with respect to the matters set forth
herein, except as specifically delineated herein. Any exhibits attached
hereto are hereby incorporated herein by reference. This instrument is
not intended to have any legal effect, or to be a legally binding
agreement or any evidence thereof, until it has been signed by each of
the parties hereto and all conditions to effectiveness hereunder have
been satisfied.
16. THIRD PARTY BENEFICIARIES - This Agreement is entered into for the
exclusive benefit of the parties hereto and no other party shall derive
any rights or benefits here from.
17. BINDING EFFECT - This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
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18. MULTIPLE COUNTERPARTS - This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
19. FURTHER ASSURANCE - The Borrowers and the Guarantors hereby agree that,
upon the request of the Lender, it will execute and deliver to Lender
such other additional instruments and documents, or perform or cause to
be performed such other and further acts and things, as may be
necessary to fully consummate the transaction contemplated by this
Agreement.
20. LOAN DOCUMENTS CONTINUE IN EFFECT - Except as expressly provided in
this Agreement, all of the terms, covenants, conditions and provisions
of the Loan Documents shall be and remain in full force and effect as
written, unmodified hereby. The B9rrowers and Guarantors hereby
further ratify and acknowledge the continuing validity and
enforceability of the Loan Documents and the obligations evidenced
thereby. In the event of any conflict between the terms of this
Agreement and any of the Loan Documents, this Agreement shall control
without any effect on the remaining portion of the Loan Documents.
This Agreement shall not waive, suspend, diminish or impair the Loan
Documents or the obligations, liabilities, liens and security
interests represented thereby.
21. INCORPORATION OF RECITALS - Recitals preceding this Agreement are
incorporated into this Agreement by this reference.
22. ACKNOWLEDGMENT OF RELIANCE - KEYDOCROM, OHIO KEY, THE ORIGINAL
GUARANTOR ANT) THE NEW GUARANTOR ACKNOWLEDGE AND AGREE THAT LENDER IS
SPECIFICALLY RELYING UPON THE REPRESENTATIONS, WARRANTIES AND
AGREEMENTS CONTAINED HEREIN.
23. WAIVER AND RELEASE - KEYDOCROM, OHIO KEY, THE ORIGINAL GUARANTOR AND
THE NEW GUARANTOR HEREBY WAIVE, RELEASE AND FOREVER DISCHARGE LENDER,
ITS AGENTS, OFFICERS, DIRECTORS AND
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EMPLOYEES FROM AND AGAINST ANY AND ALL RIGHTS, CLAIMS OR CAUSES OF
ACTION AGAINST LENDER, ITS AGENTS, OFFICERS, D[RECTORS AND EMPLOYEES
ARISING OUT OF LENDERS' ACTIONS OR INACTIONS IN CONNECTION WITH THE
LOAN OR ANY SECURITY INTEREST, LIEN OR COLLATERAL HELD IN CONNECTION
THEREWITH AS WELL AS ANY AND ALL RIGHTS OF DEFENSE(S), SET-OFF(S),
CLAIM(S), CAUSE(S) OF ACTIONS OR ANY OTHER BAR TO THE ENFORCEMENT OF
THE LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the day and year first above written.
Attest: Keydocrom, Inc.:
/s/ Xxxxx X. X'Xxxx /s/ Xxxxxx Xxxxxxxx
---------------------------------- ---------------------------
Xxxxx X. X'Xxxx, Secretary By: Xxxxxx Xxxxxxxx
Attest: Ohio Key I, Inc.
/s/Xxxx Xxxx Xxxxx, Xx. /s/Xxxx Xxxx Xxxxx, Xx.
---------------------------------- ---------------------------
Xxxx Xxxx Xxxxx, Xx., Secretary Xxxx Xxxx Xxxxx, Xx., President
Attest: Ohio Key II, Inc.
/s/Xxxx Xxxx Xxxxx, Xx. /s/Xxxx Xxxx Xxxxx, Xx.
---------------------------------- ---------------------------
Xxxx Xxxx Xxxxx, Xx., Secretary Xxxx Xxxx Xxxxx, Xx., President
Witness: Original Guarantor:
/s/ Xxxxx X. X'Xxxx /s/ Xxxxxx Xxxxxxxx
---------------------------------- ---------------------------
Xxxxx X. X'Xxxx Xxxxxx Xxxxxxxx
Witness: New Guarantor:
/s/Xxxx Xxxx Xxxxx, Xx. /s/Xxxx Xxxx Xxxxx, Xx.
---------------------------------- ---------------------------
Xxxx Xxxx Xxxxx, Xx. Xxxx Xxxx Xxxxx, Xx.
/s/Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
Witness: PNC Bank, National Association
--------------------------- ---------------------------
Xxxx X. Xxxxxxx
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