This instrument was prepared by and after recording return to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxx 0000
Xxx Xxxx, XX 10036_6772
THE PRINCIPAL AMOUNT SECURED BY THIS MORTGAGE IS $32,000,000.
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SPACE ABOVE THIS LINE FOR RECORDER'S USE.
Loan No.99-086
MORTGAGE CONSOLIDATION, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
THIS MORTGAGE CONSOLIDATION, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING ("Mortgage") is made as of the ____ day of August, 1999, by 000
Xxxxx Xxxxxx Limited Partnership, a limited partnership organized and existing
under the laws of the State of Delaware, whose address is 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Borrower"), to and for the benefit of XXXXXX
FINANCIAL, INC., a corporation organized and existing under the laws of
Delaware, whose address is 000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxx Express Servicing Department, Re: Loan No. 99_086
(XXXXXX FINANCIAL, INC. and its successors and assigns are hereinafter referred
to as "Lender").
RECITALS
A. Borrower has executed and delivered to Lender a Consolidated and
Restated Promissory Note dated of even date herewith in the principal amount of
THIRTY-TWO MILLION and No/100 Dollars ($32,000,000.00) (which note, together
with all notes issued in substitution or replacement therefor and/or as any of
the foregoing may be amended, modified or supplemented from time to time, is
hereinafter referred to as the "Note"), providing for the payment of monthly
installments of principal and interest, with the balance thereof, if not sooner
due or paid as set forth in the Note, due and payable on September 1, 2009 (said
date, or any earlier date on which the entire
unpaid principal amount shall be paid or required to be paid in full, whether by
prepayment, acceleration or otherwise, is herein called the "Maturity Date")
B. Lender wishes to secure (i) the prompt payment of the Note, together
with all interest thereon in accordance with the terms of the Note, as well as
the prompt payment of any additional indebtedness accruing to Lender on account
of any future payments, advances or expenditures made by Lender pursuant to the
Note or this Mortgage or any other agreement, document, or instrument securing
the payment of the indebtedness evidenced by the Note (the Note, this Mortgage,
and any other documents evidencing or securing the indebtedness evidenced by the
Note or executed in connection therewith, and any modifications, renewals,
and/or extensions thereof, are hereinafter collectively referred to as the "Loan
Documents"), and (ii) the prompt performance of each and every covenant,
condition, and agreement now or hereafter arising contained in the Loan
Documents of Borrower or any "Principal" (as defined in the Hazardous Substance
Indemnification Agreement delivered in connection with this Mortgage ), as the
case may be. All payment obligations of Borrower or any Principal, as the case
may be, under the Loan Documents are hereinafter sometimes collectively referred
to as the "Indebtedness" and all other obligations of Borrower or any Principal,
as the case may be, under the Loan Documents are hereinafter sometimes
collectively referred to as the "Obligations".
C. Borrower is the owner of the fee interest in the real estate described
in Exhibit A attached hereto (the "Land").
D. Lender is the holder of (a) those certain mortgages listed on Exhibit
B attached hereto (collectively, the "Existing Mortgages"), encumbering
Borrower's estate in the Property (as hereinafter defined), and (b) the
respective bonds, notes, or obligations secured by the Existing Mortgages
(collectively, the "Existing Notes").
E. The terms and provisions of the Existing Notes have been amended and
restated in their entirety pursuant to the Note to constitute one joint
indebtedness in the original principal amount of the Note.
F. Borrower and Lender have mutually agreed to consolidate, coordinate,
amend and restate the terms of the Existing Mortgages in their entirety, and
have mutually agreed to consolidate and coordinate the liens of the Existing
Mortgages so that such liens are made equal and coordinate in the policy.
NOW, THEREFORE, TO SECURE TO LENDER the repayment of the Indebtedness and
the performance of the Obligations, Borrower has executed this Mortgage and does
hereby covenant and agree as follows:
To induce Lender to enter into this Mortgage, Borrower represents to
Lender that there is now validly due and owing on the Existing Notes and secured
by the Existing Mortgages, without defense, offset or counterclaim of any kind,
the total sum of $32,000,000.00 (the "Loan Amount").
The Existing Notes are modified to provide for payment of the Loan
Amount, together with interest thereon, in the manner set forth in, and subject
to the terms of, the Note , and Borrower
hereby agrees to repay the Loan Amount, together with interest thereon, in
accordance with the terms of the Note.
All of the terms and conditions of the Existing Mortgages are hereby
modified and superseded by the terms and conditions of this Mortgage, and the
Existing Mortgages are hereby combined and consolidated and made equal and
coordinate in lien without priority of the one over the other so that together
the Existing Mortgages shall hereafter constitute in law but one mortgage, a
single first lien on the Property securing the Loan Amount, and, to the extent
not already covered thereby, such Existing Mortgages, as so consolidated, are
hereby spread to cover, and Borrower does hereby mortgage, convey, assign,
warrant, transfer, pledge and grant to Lender a security interest in the
following described property and all proceeds thereof to the extent of
Borrower's interest therein (which property is hereinafter sometimes
collectively referred to as the "Property"):
A. The Land;
B. All improvements of every nature whatsoever now or hereafter
situated on the Land and owned by Borrower (the "Improvements"), and all
machinery, equipment, mechanical systems and other personal property now
or hereafter owned by Borrower and used in connection with the operation
of the Improvements;
C. All easements and appurtenances now or hereafter in any way
relating to the Land and/or Improvements or any part thereof;
D. All agreements affecting the use, enjoyment or occupancy of the
Land and/or Improvements now or hereafter entered into (the "Leases"),
including any and all guaranties of such Leases, and the immediate and
continuing right to collect all rents, income, tax, insurance, and
replacement reserve deposits, receipts, royalties, profits, issues,
service reimbursements, fees, accounts receivables, revenues and
prepayments of any of the same (including termination, cancellation,
option and similar payments) from or related to the Land and/or
Improvements from time to time accruing under the Leases and/or the
operation of the Land and/or Improvements (the "Rents"), reserving to
Borrower, however, so long as no "Event of Default" (hereinafter defined)
has occurred hereunder, a revocable license to receive and apply the
Rents in accordance with the terms and conditions of Paragraph 13 of this
Mortgage;
E. All claims, demands, judgments, insurance proceeds, awards of
damages and settlements hereafter made resulting from the taking of the
Land and/or the Improvements or any part thereof under the power of
eminent domain, or for any damage (whether caused by such taking, by
casualty or otherwise) to the Land and/or the Improvements or any part
thereof;
F. To the extent assignable, all now or hereafter existing
management contracts and all permits, certificates, licenses, agreements,
approvals, entitlements and authorizations, however characterized, issued
or in any way furnished for the acquisition, construction, operation and
use of the Land, Improvements and/or Leases, including building permits,
environmental certificates, licenses, certificates of operation,
warranties and guaranties;
G. All of Borrower's rights in and to all trademarks, tradenames,
assumed names, telephone numbers and listing rights and other rights and
interests in and to the names and marks used by Borrower in connection
with the Land and/or Improvements, including all rights in the name 000
Xxxxx Xxxxxx, and all books and records and all other general intangibles
relating to the operation of the Land and/or Improvements; and
H. Any monies on deposit with or for the benefit of Lender,
including deposits for the payment of real estate taxes, insurance
premiums and any other reserves held by Lender or its agent.
TO HAVE AND TO HOLD the Property and all parts thereof, with Power of
Sale, together with the rents, issues, profits and proceeds thereof, unto Lender
to its own proper use, benefit, and advantage forever, subject, however, to the
terms, covenants, and conditions herein.
Borrower covenants and agrees with Lender as follows:
1. Payment of Indebtedness; Performance of Obligations.
Borrower shall promptly pay when due the Indebtedness and shall promptly
perform all Obligations.
2. Taxes and Other Obligations.
Subject to Paragraphs 3 and 5 hereafter, as applicable, Borrower shall
pay, when due, and before any interest, collection fees or penalties shall
accrue, all taxes, assessments, fines, impositions and other charges and
obligations, including charges and obligations for any present or future repairs
or improvements made on the Property, or for any other goods, services or
utilities furnished to the Property, which may become a lien on or charge
against the Property prior to this Mortgage, subject, however, to Borrower's
right to contest such lien or charge upon the posting of security reasonably
satisfactory to Lender so long as such contest stays the enforcement or
collection of such lien or charge. Should Borrower fail to make such payments,
Lender may, at its option and at Borrower's expense, pay the amounts due for the
account of Borrower and all amounts advanced shall be included in the
Indebtedness. Upon the request of Lender, Borrower shall immediately furnish to
Lender any notices of amounts due and receipts evidencing payment as and when
due in each case, which come into Borrower's possession. Borrower shall promptly
notify Lender of any lien on all or any part of the Property and shall promptly
discharge any unpermitted lien or encumbrance as required by the terms and
conditions of this Mortgage..
3. Reserves for Taxes/Replacement Reserve/Tenant Improvements and Leasing
Reserve.
(a) Borrower shall pay to Lender, at the time of and in addition
to the monthly installments of principal and/or interest due under the
Note, a sum equal to 1/12 of the amount reasonably estimated by Lender to
be sufficient to enable Lender to pay at least 30 days before they become
due and payable, all taxes, assessments and other similar charges levied
against the Property as reasonably determined by Lender (the "Property
Tax Reserve"). Provided that Lender shall have a copy of the tax xxxx,
and sufficient funds on deposit from Borrower to pay such tax xxxx,
Lender shall apply the sums in the Property Tax Reserve to pay such tax
items. These sums may be commingled with funds otherwise held by Lender
on account of real estate tax obligations, and no interest shall be
payable thereon nor shall these sums be deemed to be held in trust for
the benefit of Borrower. If such amount on deposit with Lender is
insufficient to fully pay such tax items, Borrower shall, within 10 days
following notice at any time from Lender, deposit such additional sum as
may be required for the full payment of such tax items. If the sums held
in the Property Tax Reserve shall exceed the amounts due for taxes,
Lender shall, in its reasonable discretion, return any excess to Borrower
or credit such excess against future payments to be made to the Property
Tax Reserve. Borrower hereby grants Lender a security interest in such
funds and Borrower shall execute any other documents and take any other
actions reasonably necessary to provide Lender with a perfected security
interest in such funds. Upon the Maturity Date, the moneys then remaining
on deposit with Lender or its agent shall, at Lender's option, be applied
against the Indebtedness or returned to Borrower upon payment in full of
the Indebtedness .
(b) At the time of closing of the loan evidenced by the Loan
Documents ("Loan"), Lender shall deposit $200,000.00 of the proceeds of
the Loan into a replacement reserve ("Replacement Reserve"). The
Replacement Reserve shall bear interest for the benefit of Borrower.
Interest will be paid on the funds in the Replacement Reserve at the
"non-personal money market rate" in effect as of the first business day
of each month at The Northern Trust Company or its successors. Interest
on the Replacement Reserve shall be calculated using the actual number of
days in a month and a 365 day year and will be paid into the Replacement
Reserve and compounded on a monthly basis. The funds contained in the
Replacement Reserve shall be utilized by Borrower solely for capital
improvements reasonably approved in advance by Lender. Lender shall
reimburse Borrower, or pay as directed by Borrower from the Replacement
Reserve for the actual cost of such approved capital improvements within
10 business days of Borrower's providing Lender with paid receipts or
invoices, lien waivers and other documentation deemed reasonably
necessary by Lender, which shall occur no more than once per month. Upon
the Maturity Date, the moneys then remaining on deposit with Lender or
its agent shall, at Lender's option, be applied against the Indebtedness
or returned to Borrower upon payment in full of the Indebtedness.
Borrower hereby grants Lender a security interest in the Replacement
Reserve and Borrower shall execute any other documents and take any other
actions reasonably necessary to provide Lender with a perfected security
interest in the Replacement Reserve. If the balance of the Replacement
Reserve falls below $200,000.00, then at the time of and in addition to
the monthly installments of principal and/or interest due under the Note,
Borrower shall pay to Lender monthly deposits of $4,000.00 until the
balance of the Replacement Reserve equals $200,000.00.
(c) At the time of the closing of the Loan, Lender shall deposit
$1,967,000 of the proceeds of the Loan into a capital improvements
reserve ("Capital Improvements Reserve"). The Capital Improvement Reserve
shall bear interest for the benefit of Borrower. Interest will be paid on
the funds in the Capital Improvement Reserve at the "non-personal money
market rate" in effect as of the first business day of each month at The
Northern Trust Company or its successors. Interest on the Capital
Improvement Reserve shall be calculated using the actual number of days
in a month and a 365 day year and will be paid into the Capital
Improvements Reserve and compounded on a monthly basis. The funds
contained in the Capital Improvements Reserve shall be utilized by
Borrower solely for capital improvements determined in the sole
discretion of Borrower. Lender shall reimburse Borrower, or pay as
directed by Borrower from the Capital Improvements Reserve for the actual
cost of such capital improvements within 10 business days of Borrower's
providing Lender with paid receipts or invoices, lien waivers and other
documentation deemed reasonably necessary by Lender, which shall occur no
more than once per month. Upon the Maturity Date, the moneys then
remaining on deposit with Lender or its agent shall, at Lender's option,
be applied against the Indebtedness or returned to Borrower upon payment
in full of the Indebtedness. Borrower hereby grants Lender a security
interest in the Capital Improvements Reserve and Borrower shall execute
any other documents and take any other actions reasonably necessary to
provide Lender with a perfected security interest in the Capital
Improvements Reserve.
(d) At the time of the closing of the Loan, Lender shall deposit
$850,000.00 of the proceeds of the Loan into a reserve for tenant
improvements and leasing commissions relating to the sub-leasing of the
space (consisting of approximately 15,667 square feet of space) currently
leased to Europe Craft Imports, Inc. (the "Europe Craft Space") ("TI and
Leasing Reserve"). The TI and Leasing Reserve shall bear interest for the
benefit of Borrower. Interest will be paid on the funds in the TI and
Leasing Reserve at the "non_personal money market rate" in effect as of
the first business day of each month at The Northern Trust Company or its
successors. Interest on the TI and Leasing Reserve shall be calculated
using the actual number of days in a month and a 365 day year and will be
paid into the TI and Leasing Reserve and compounded on a monthly basis.
The funds contained in the TI and Leasing Reserve shall be utilized by
Borrower first solely for tenant improvements and leasing commissions for
the Europe Craft Space customary in the market place. Once the Europe
Craft Space has been completely sub-leased, any funds remaining in the TI
and Leasing Reserve will be used for tenant improvements and leasing
commissions customary in the marketplace for other space in the Property.
Lender shall reimburse Borrower, or pay as directed by Borrower from the
TI and Leasing Reserve for the actual cost of such tenant improvements
and leasing commissions customary in the market place within 10 business
days of Borrower's providing Lender with invoices or paid receipts, lien
waivers and other documentation deemed reasonably necessary by Lender,
which shall occur no more than once per month. Upon the Maturity Date,
the moneys then remaining on deposit with Lender or its agent shall, at
Lender's option, be applied against the Indebtedness or returned to
Borrower upon payment in full of the Indebtedness. Borrower hereby grants
Lender a security interest in the TI and Leasing Reserve and Borrower
shall execute any other documents and take any other actions reasonably
necessary to provide Lender with a perfected security interest in the TI
and Leasing Reserve.
(e) With respect to any disbursement pursuant to paragraphs 3(b),
3(c) or 3(d), above, if (i) the time required to complete work to be
funded thereunder exceeds one month, (ii) the contractor performing such
work requires periodic payments pursuant to the terms of a written
contract, and (iii) the total cost of such work exceeds $50,000, a
request for reimbursement or payment from the applicable reserve may be
made after completion of a portion of the work under such contract,
provided (u) such contract requires payment upon completion of such
portion of the work, (v) the materials for which the request is made are
on site at the Property and are properly secured or have been installed
in the Property, (w) all other conditions in this Mortgage for
disbursement have been satisfied, (x) funds remaining in the applicable
reserve are, in Lender's reasonable judgment, sufficient to complete such
work and the other work when required (y) the cost of the portion of the
work completed under such contract exceeds $5,000, and (z) each
contractor or subcontractor receiving payments under such contract shall
provide a waiver of lien with respect to amounts which have been paid to
that contractor or subcontractor. Borrower shall not make a request for
disbursements more frequently than monthly under this subsection and
Lender shall not be obligated to make any disbursements if an Event of
Default then exists.
4. Use of Property.
Unless required by applicable law, Borrower shall not permit changes in
the use of any part of the Property from the use existing at the time this
Mortgage was executed, which use Borrower represents and warrants is limited to
offices and retail and related uses. Borrower shall not initiate or acquiesce in
a change in the zoning classification of the Property or grant easements
burdening the Property (other than customary utility easements necessary for the
use of the Property) without Lender's prior written consent.
5. Insurance and Condemnation.
Borrower shall keep the Improvements insured, and shall maintain general
liability coverage and such other coverages requested by Lender, in amounts at
all times reasonably satisfactory to Lender provided all such policies of
insurance shall be issued by insurers qualified under the laws of the state in
which the Land is located, duly authorized and licensed to transact business in
such state and reflecting a General Policy Rating of A-(X) or better in Best's
Key Rating Guide. Existing insurance carriers (so long as they are rated A-(X))
and amounts approved by Lender as of the date hereof shall be deemed approved
hereafter. Unless Borrower provides Lender with evidence of the insurance
coverage required by this Mortgage, Lender may purchase insurance at Borrower's
expense to protect Lender's interests in the Property and to maintain the
insurance required by this Mortgage. This insurance may, but need not, protect
Borrower's interests. The coverage purchased by Lender may not pay any claim
made by Borrower or any claim that is made against Borrower in connection with
the Property or any required insurance policy. Borrower may later cancel any
insurance purchased by Lender, but only after providing Lender with evidence
that Borrower has obtained insurance as required by this Mortgage. If Lender
purchases insurance for the Property or insurance otherwise required by this
Mortgage, Borrower will be responsible for the costs of that insurance,
including interest and other charges imposed by Lender in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to the
Indebtedness. The costs of the insurance may be more than the cost of insurance
Borrower is able to obtain on its own.
In case of loss or damage by fire or other casualty, Borrower shall give
immediate written notice thereof to the insurance carrier(s) and to Lender. In
the event a casualty loss or damage does not exceed $1,000,000, Borrower may
settle and adjust any claim without the consent of Lender and agree with the
insurance company or companies on the amount to be paid upon the loss, and
Borrower is hereby authorized to collect and receipt for any such insurance
proceeds, provided Borrower delivers to Lender a written undertaking to
expeditiously commence and satisfactorily complete the restoration of the damage
caused by such casualty in compliance with all applicable laws, rules and
regulations. In the event a casualty loss or damage does exceed $1,000,000,
Lender is authorized and empowered to make or file proofs of loss or damage and
to settle and adjust any claim under insurance policies which insure against
such risks, or to direct Borrower, in writing, to agree with the insurance
carrier(s) on the amount to be paid in regard to such loss and the Net Proceeds
(defined below) are hereby assigned to and shall be paid to Lender as further
security for the payment of the Indebtedness and performance of the Obligations,
subject to the second paragraph hereafter.
Borrower shall immediately notify Lender of any action or proceeding
relating to any condemnation or other taking, whether direct or indirect, of the
Property, or part thereof, and Borrower shall appear in and prosecute any such
action or proceeding unless otherwise directed by Lender in writing. Borrower
shall diligently prosecute any such proceeding, collect any award or payment for
damages and thereafter diligently prosecute any required restoration of the
Property in compliance with all applicable laws, rules and regulations. Lender,
at Lender's option, may participate with Borrower, to commence, appear in and
prosecute any action or proceeding relating to any condemnation or other taking
of the Property, whether direct or indirect, and to settle or compromise any
claim in connection with such condemnation or other taking, provided such claim
is for an amount equal to or greater than $1,000,000.00. The Net Proceeds
(defined below) of any award, payment or claim for damages, direct or
consequential, in connection with any condemnation or other
taking in excess of $1,000,000.00, whether direct or indirect, of the Property,
or part thereof, or for conveyances in lieu of condemnation, are hereby assigned
to and shall be paid to Lender as further security for the payment of the
Indebtedness and performance of the Obligations, subject to the following
paragraph.
Anything above the contrary notwithstanding, provided no Event of Default
then exists hereunder, the net insurance proceeds and/or net proceeds of any
condemnation award (in each case after deduction only of Borrower's and Lender's
reasonable costs and expenses, if any, in collecting the same, the "Net
Proceeds") payable to Lender hereunder shall be made available for the
restoration or repair of the Property, either by means of reimbursement to
Borrower or payment as directed by Borrower for the actual cost of such
restoration or repair of the Property within 10 business days of Borrower's
providing Lender with paid receipts or invoices, lien waivers and other
documentation deemed reasonably necessary by Lender, if, in Lender's reasonable
discretion (a) restoration or repair and the continued operation of the Property
is economically feasible, (b) the value of Lender's security after completion of
the repairs or restoration is not materially reduced, (c) the loss or
condemnation, as applicable, does not occur in the six (6) month period
preceding the stated Maturity Date and Lender's independent consultant certifies
that the restoration of the Property can be completed at least 90 days prior to
the Maturity Date, and (d) Borrower deposits cash with Lender in an amount
determined by a contractor reasonably acceptable to the parties, reasonably
necessary, in addition to the Net Proceeds, to pay in full the cost of the
restoration or repair. Notwithstanding the foregoing, it shall be a condition
precedent to any disbursement of Net Proceeds held by Lender hereunder that
Lender shall have reasonably approved (x) all plans and specifications for any
proposed repair or restoration, (y) the construction schedule and (z) the
architect's and general contractor's contract for all restoration that exceeds
$1,000,000.00 in the aggregate. With respect to restoration or repair projects
in excess of $1,000,000, Lender may establish other conditions it deems
reasonably necessary to assure the work is fully completed in a good and
workmanlike manner free of all liens or claims by reason thereof. Borrower's
deposits made pursuant to this paragraph shall be used before the Net Proceeds
held by Lender for such restoration or repair. If the Net Proceeds are made
available for restoration or repair, such work shall be completed by Borrower in
a diligent fashion, and in compliance with all applicable laws, rules and
regulations. At Lender's option, the Net Proceeds shall also be disbursed by
Lender pursuant to a construction escrow reasonably acceptable to Lender and
Borrower. If following the final payments for the completion of such restoration
or repair there are any Net Proceeds remaining, such proceeds shall be paid to
Borrower, provided that such restoration and repair is completed substantially
in accordance with the previously approved plans, as determined in Lender's
reasonable discretion. If an Event of Default then exists, or any of the
conditions set forth in subparagraphs (a) through (d) of this Paragraph 5 have
not been met or satisfied, the Net Proceeds held by Lender may be applied,
without any prepayment penalty or fee or any Yield Maintenance Amount, as
defined in the Note, to the Indebtedness, whether or not then due and payable,
with any excess paid to Borrower. All covenants hereof shall be construed as
affording to Lender rights additional to and not exclusive of the rights
conferred under the provisions of Sections 254, 271 and 272 of the New York Real
Property Law or any other applicable law of any other state. If there is a
conflict between any provisions of this Mortgage and the
provisions of Section 254 of the New York Real Property Law, Borrower agrees
that the applicable provision of this Mortgage shall control.
Until such time as any part or all of the Net Proceeds held by Lender are
disbursed as provided hereinabove, such Net Proceeds shall be held by Lender in
an interest bearing account for the benefit of Borrower. Interest will be paid
on such Net Proceeds at the "non-personal money market rate" in effect as of the
first business day of each month at The Northern Trust Company or its
successors. Interest on such Net Proceeds shall be calculated using the actual
number of days in a month and a 365 day year and will be paid to the account
holding such Net Proceeds and compounded on a monthly basis.
6. Preservation and Maintenance of Property.
Borrower (a) shall not commit waste or permit impairment or deterioration
of the Property; (b) shall not abandon the Property; (c) shall, subject to
Paragraphs 3 and 5 above, as applicable, and to the extent Rents, Property
revenue and casualty and/or condemnation proceeds are available, keep the
Property in good repair and restore or repair promptly, in a good and
workmanlike manner, all or any part of the Property to the equivalent of its
original condition, ordinary wear and tear excepted, or such other condition as
Lender may reasonably approve in writing, and upon any damage or loss thereto in
accordance with the terms of Paragraph 5; (d) shall comply with all laws,
ordinances, regulations and requirements of any governmental body applicable to
the Property; (e) shall provide for management of the Property by Borrower or by
a property manager reasonably satisfactory to Lender pursuant to a contract in
form and substance reasonably satisfactory to Lender; and (f) shall give notice
in writing to Lender of and, unless otherwise directed in writing by Lender if
the Lender determines that the Property may be adversely affected by such
appearance, appear in and defend any action or proceeding purporting to affect
the Property, the security granted by the Loan Documents or the rights or powers
of Lender. Neither Borrower nor any tenant or other person shall remove,
demolish or alter any Improvement or any fixture, equipment, machinery or
appliance in or on the Land and owned or leased by Borrower except when incident
to the replacement of fixtures, equipment, machinery and appliances with items
of like kind, without the prior written consent of Lender, which consent shall
not be unreasonably withheld or delayed.
7. Protection of Lender's Security.
If Borrower fails to pay the Indebtedness or perform the Obligations
after the expiration of any applicable notice or cure period, or if any action
or proceeding is commenced which materially affects the Property or Lender's
interest therein and Borrower fails to promptly take appropriate action, as
reasonably determined by Lender, then Lender, at Lender's option, may make such
appearances, disburse such sums and take such action as Lender deems necessary,
in its reasonable discretion, to protect the Property or Lender's interest
therein, including lawful entry upon the Property to make repairs and perform
environmental tests and studies. Lender shall give Borrower reasonable notice of
all such appearances, disbursements and actions, which may be before or after
any such appearance, disbursement or action, as appropriate. Any amounts
disbursed by Lender pursuant to this Paragraph 7 (including attorneys' costs and
expenses), shall bear interest thereon at the "Default Rate" (defined in the
Note) from the date of disbursement, shall become additional Indebtedness of
Borrower secured by the Loan Documents and shall be due and payable on demand.
Nothing contained in this Paragraph 7 shall require Lender to incur any expense
or take any action hereunder. With respect to the foregoing, reference is made
to Section 291-f of the New York Real Property Law and the benefits of such
Section 291-f shall apply hereto.
8. Inspection.
Lender and its agents and designees may make or cause to be made
reasonable lawful entries upon and inspections of the Property (subject to the
rights of tenants), including for performing any environmental inspections and
testing of the Property, and inspections of Borrower's books, records, and
contracts at all reasonable times upon reasonable advance notice. Borrower shall
cooperate with Lender and its agents and designees with respect to all such
inspections, including any related to the sale or potential sale of all or any
portion of the Loan by Lender and any securitization or potential securitization
involving the Loan.
9. Books and Records.
Borrower shall keep and maintain at all times at Borrower's address
stated above, or such other place as Lender may approve in writing, complete and
accurate books of accounts and records adequate to reflect correctly the results
of the operation of the Property and copies of all written contracts, Leases and
other instruments affecting the Property.
10. Financial Statements.
Borrower shall furnish to Lender, within 45 days after the end of each
fiscal quarter of the operation of the business of Borrower and at any other
time upon five (5) business days of Lender's written request (provided Lender
shall not make such request more than two (2) times in any twelve (12) month
period), a balance sheet and a statement of income and expenses of the Property,
each in reasonable detail, prepared in accordance with sound accounting
principles customarily used in the real estate industry and consistently applied
and certified as true and complete by Borrower or its general partner or chief
financial officer. Borrower shall also furnish to Lender, and shall cause each
Principal to furnish to Lender, within 60 days after the end of each fiscal year
of Borrower, a balance sheet, a statement of income and expenses and a statement
of cash flows, each in reasonable detail, prepared in accordance with sound
accounting principles customarily used in the real estate industry and
consistently applied and certified as true and complete by Borrower or its
general partner or chief financial officer and each Principal, as the case may
be. Borrower shall furnish, together with the foregoing quarterly financial
statements and at any other time upon five (5) business days of Lender's written
request (provided Lender shall not make such request more than two (2) times in
any twelve (12) month period), (a) a rent roll for the Property, showing the
name of each tenant, and for each tenant, the space occupied, the lease
expiration date, the rent payable, the rent paid to date, and the security
deposit being held for such tenant, (b) a leasing activity report for the
Property during such fiscal quarter, (c) a capital expenditure report indicating
the type and amount of each capital expenditure made during such fiscal quarter,
and (d) any other information that Lender may reasonably require, all of the
foregoing shall be certified as true and complete by Borrower or its general
partner or chief financial officer. In addition, Borrower shall cause each
Principal to provide to Lender a draft copy of his/her/its financial statements
prepared in accordance with sound accounting principles consistently applied,
certified by such Principal to be a true and complete copy of such financial
statements and in form reasonably satisfactory to Lender, within 60 days of the
end of each calendar year with a final version of such Principal's financial
statements to be provided within 90 days of the end of such calendar year. All
of the information required by Lender in this paragraph must be in form
acceptable to Lender in its reasonable discretion. If Borrower fails to timely
furnish Lender with any of the financial information and reports set forth in
this paragraph within the required time periods, Lender shall have the right,
acting in its sole discretion, to hire a certified public accounting firm
acceptable to Lender, to prepare such financial information and reports in
accordance with generally accepted accounting principles, on an audited basis.
The costs and expenses of such accounting firm shall be paid by Borrower on
demand and, to the extent advanced by Lender become additional Indebtedness of
Borrower secured by the Loan Documents, with interest thereon from the date
advanced by Lender at the Default Rate. Additionally, if Borrower fails to
timely furnish Lender with any of the financial information and reports set
forth in this paragraph within the required time periods, Lender shall be
entitled to receive a late charge equal to $500.00 for each financial
information and/or report not so furnished to Lender (the "Financial Late
Charge"). The Financial Late Charge shall be due and payable by Borrower within
five (5) business days after receipt by Borrower of an invoice for same from
Lender and until paid, the Financial Late Charge shall bear interest at the
Default Rate, and shall be deemed additional Indebtedness of Borrower secured by
the Loan Documents.
11. Hazardous Materials.
Borrower covenants and agrees that it (a) shall not use, generate, store,
or allow to be generated, stored or used, any "Hazardous Materials" (hereinafter
defined) on the Property, except in the ordinary course of Borrower's business
and in accordance with all "Environmental Laws" (hereinafter defined), (b) shall
at all times maintain the Property in full compliance with all applicable
Environmental Laws, including timely remediating the Property if and when
required, and (c) shall reasonably cause compliance by all tenants and
sub-tenants on the Property with Borrower's covenants and agreements contained
in this Paragraph 11. Notwithstanding the foregoing, Lender acknowledges that
Borrower has informed it in writing of certain currently existing conditions on
or about the Property.
Upon obtaining knowledge thereof, Borrower shall promptly notify Lender
in writing of (i) any investigation, claim or other proceeding by any party
caused or threatened in connection with any Hazardous Materials on the Property,
or the failure or alleged failure of the Property to comply with any applicable
Environmental Laws, or (ii) Borrower's discovery of any condition on or in the
vicinity of the Property that could cause the Property to fail to comply with
applicable Environmental Laws.
The term "Environmental Laws" shall include any federal, state or local
laws or regulations relating to health, safety or protection of the environment.
The term "Hazardous Materials" shall include Hazardous Substances, as defined by
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss.9601 et seq., any petroleum or petroleum products (excluding a small
quantity of gasoline and oil used in maintenance equipment on the Property),
asbestos or asbestos containing material, or any other hazardous substances,
hazardous wastes or hazardous materials as defined by other Environmental Laws.
12. Representations and Covenants.
(a) If Borrower is a corporation, it represents that it is a
corporation duly organized, existing and in good standing under the laws
of its state of incorporation, that it is duly qualified and in good
standing under the laws of the state where the Land is located, and that
the execution and delivery of the Loan Documents and the performance of
the obligations thereunder are within Borrower's corporate powers, have
been duly authorized by all necessary action of its board of directors,
and do not contravene the terms of its articles of incorporation or
by-laws.
(b) If Borrower is a general or limited partnership or a limited
liability company, it represents that it is duly formed, organized and
existing in the state of its formation, that it is qualified to do
business under the laws of the state where the Land is located, and that
the execution and delivery of the Loan Documents and the performance of
the obligations thereunder do not conflict with any provision of
Borrower's partnership agreement or operating agreement, as applicable,
and all other certificates and agreements governing Borrower, and have
been duly authorized by all necessary action of its partners or members.
(c) Borrower represents that, to the best of Borrower's knowledge,
(i) the execution and delivery of the Loan Documents, the payment of the
Indebtedness, and the performance of the Obligations do not violate any
law or conflict with any agreement or court order by which Borrower is
bound, (ii) no consent or approval of any governmental authority or any
third party is required for the execution or delivery of the Loan
Documents, the payment of the Indebtedness, and the performance of the
Obligations, and (iii) the Loan Documents are valid and binding
agreements, enforceable in accordance with their terms.
(d) Borrower represents that (i) it is lawfully seized with fee
simple title in the estate hereby conveyed; (ii) it has the right to
mortgage, convey, assign and grant a first security interest in the
Property; (iii) the Property is unencumbered, and Borrower will warrant
and defend title to the Property against all claims and demands, subject
to encumbrances (including the Existing Mortgages), easements and
restrictions listed in a schedule of exceptions to coverage in the title
insurance policy accepted by Lender insuring Lender's interest in the
Property; and (iv) it has no operations, assets or activities other than
the Property.
(e) Borrower represents and covenants that to the best of
Borrower's knowledge after due investigation (i) all material licenses,
permits, approvals, franchises, and certificates, including certificates
of completion and occupancy permits, required by law or regulation for
the ownership and operation of the Property have been obtained and are
and shall remain in full force and effect; and (ii) the use and occupancy
of the Property is and shall remain in compliance with all laws.
(f) Borrower represents that to the best of Borrower's knowledge
all of the improvements on the Land lie wholly within the boundaries of
and building line restrictions relating to the Land and no improvements
located on adjoining lands encroach upon the Land so as to affect the
value or marketability of the Property, except those which are insured
against by the title insurance policy accepted by Lender insuring
Lender's interest in the Property.
(g) None of Borrower, any Principal, or to the best of Borrower's
knowledge after due investigation, any other holder of a direct or
indirect legal or beneficial interest in Borrower is or will be, held,
directly or indirectly, by a "foreign corporation," "foreign
partnership," "foreign trust," "foreign estate," "foreign person,"
"affiliate" of a "foreign person" or a "United States intermediary" of a
"foreign person" within the meaning of IRC Sections 897 and 1445, the
Foreign Investments in Real Property Tax Act of 1980, the International
Foreign Investment Survey Act of 1976, the Agricultural Foreign
Investment Disclosure Act of 1978, the regulations promulgated pursuant
to such acts or any amendments to such acts.
(h) None of Borrower or any Principal is insolvent, and there has
been no (i) assignment made for the benefit of the creditors of any of
them, (ii) appointment of a receiver for any of them or for the
properties of any of them, or (iii) any bankruptcy, reorganization, or
liquidation proceeding instituted by or against any of them.
(i) There has been no material adverse change in the
representations made or information heretofore supplied by or on behalf
of Borrower or any Principal in connection with the Loan as to Borrower,
any Principal, or the Property.
(j) Except as previously disclosed in the title report on the
Property delivered to Lender in connection with the Loan, there is no
litigation, arbitration, or other proceeding or governmental
investigation pending or, to Borrower's knowledge, threatened against or
relating to Borrower, any Principal, or the Property.
(k) The proceeds evidenced by the Note will be used by Borrower
solely and exclusively for proper business purposes and will not be used
for the purchase or carrying of registered equity securities within the
purview and operation of any regulation issued by the Board of Governors
of the Federal Reserve System or for the purpose of releasing or retiring
any indebtedness which was originally incurred for any such purpose.
(l) Borrower represents and covenants that all Leases of space in
the Property existing as of the date hereof are in writing.
(m) Borrower covenants that, after closing, Lender shall be
allowed to advertise in the various news or financial media that Lender
has provided the Loan to Borrower.
(n) Borrower represents and covenants that it does not have and
will not incur any other indebtedness other than (i) the Indebtedness,
(ii) trade payables incurred in the ordinary course of business and (iii)
an unsecured lien of working credit, on terms reasonably acceptable to
Lender, in an amount not to exceed $1,280,000.
(o) Borrower has made an assessment of the microchip and
computer-based systems and the software used in its business and based
upon such assessment believes that it will be Year 2000 Compliant by
January 1, 2000. "Year 2000 Compliant" means that all software, embedded
microchips and other processing capabilities utilized by, and material to
the business operations or financial condition of, Borrower are able to
interpret, store, transmit, receive and manipulate data on and involving
all calendar dates correctly and without causing any abnormal ending
scenarios in relation to dates in and after the calendar year 2000. From
time to time, at the request of Lender, Borrower shall provide to Lender
such updated information as is requested regarding its efforts to become
Year 2000 Compliant.
13. Leases of the Property/Absolute Assignment, License to Receive and Apply
Rents.
The parties intend that this Mortgage grants a present, absolute, and
unconditional assignment of the Rents and shall, immediately upon execution,
give Lender the right to collect the Rents and to apply them in payment of the
principal, interest and all other sums payable under the Loan Documents. Such
assignment and grant shall continue in effect until the Indebtedness is paid in
full and all Obligations are fully satisfied. Subject to the provisions set
forth herein and provided there is no Event of Default, Lender grants to
Borrower a revocable license to enforce
the Leases and collect the Rents as they become due (excluding, however, any
Lease termination, cancellation, option or similar payments, (unless Borrower is
simultaneously entering into a lease for the space surrendered with a tenant of
equal or greater creditworthiness and upon terms and conditions at least as
favorable to the Borrower as the terminated Lease, or unless such Lease is a
Minor Lease, as defined below) which Borrower agrees shall be held in trust and
turned over to Lender for credit to principal under the Loan, without payment of
any prepayment penalty, fee or Yield Maintenance Amount) and Borrower shall hold
the same, in trust, to be applied first to the payment of all impositions,
levies, taxes, assessments and other charges upon the Property (subject to
Paragraph 3 above), second to maintenance of insurance policies upon the
Property required hereby, third to the expenses of Property operations,
including maintenance and repairs required hereby (subject to Paragraphs 3 and 5
above), fourth to the payment of that portion of the Indebtedness then due and
payable, and fifth, the balance, if any, to or as directed by Borrower. Borrower
shall deliver such Rents to Lender as are necessary for the payment of
principal, interest and other sums payable under the Loan Documents as such sums
become due.
Borrower shall comply with and observe Borrower's obligations as landlord
under all Leases. After the date hereof, Borrower shall not, without Lender's
prior written consent, which consent shall not be unreasonably withheld or
delayed, execute or materially modify or amend any commercial Lease, other than
self storage leases or leases of less than 15,000 rentable square feet (a "Minor
Lease"). Other than with respect to Minor Leases, Borrower shall not, without
Lender's prior written consent, which consent shall not be unreasonably withheld
or delayed, cancel or terminate any Lease or accept a surrender thereof unless
Borrower is simultaneously entering into a lease for the space surrendered with
a tenant of equal creditworthiness and upon terms and conditions at least as
favorable to the Borrower as the Lease terminated. All Leases and amendments
thereto shall be on the form of lease previously approved by Lender with such
changes as are reasonably required by tenants and approved by Borrower, as
landlord, exercising prudent leasing standards. The current form of Lease is
acceptable to Lender. All commercial Leases, including self storage leases,
executed or renewed after the date hereof shall provide for rental rates
comparable to existing local market rates and shall be arm's length
transactions. Borrower shall not be authorized to enter into any ground lease of
the Property without Lender's prior written approval. If Lender consents to any
new Lease or the renewal of any existing Lease, at Lender's written request,
Borrower shall cause the tenant thereunder to execute a subordination,
non-disturbance and attornment agreement in form and substance reasonably
satisfactory to Lender contemporaneously with the execution of such Lease.
Borrower, at Lender's written request, shall furnish Lender with executed copies
of all Leases. All Leases other than for space in the Property shall be
terminable on not less than 90 days' notice, unless approved in writing by
Lender prior to Borrower's execution thereof. Any requested consent or approval
of Lender hereunder shall be deemed approved if not denied in writing within ten
(10) business days after the date on which Lender receives such request and all
information reasonably necessary to consider such request, provided that if
Lender has not requested such information within ten (10) days after the date on
which Lender receives such request, such consent or approval shall be deemed
approved.
Until Lender takes title to or possession or control of the Property by
foreclosure, mortgagee in possession or otherwise, this Mortgage shall not make
Lender responsible for the control, care, management, or repair of the Property
or any personal property or for the carrying out of any of the terms of the
Leases. Until Lender takes title to or possession or control of the
Property by foreclosure, mortgagee in possession or otherwise, Borrower hereby
acknowledges and agrees: (i) Borrower is and will remain liable under the Leases
to the same extent as though this Mortgage had not been made; and (ii) Lender
has not by this Mortgage assumed any of the obligations of Borrower under the
Leases, except as to such obligations which arise after such time as Lender
shall have taken title to or possession or control of the Property by
foreclosure, mortgagee in possession or otherwise. Until Lender takes title to
or possession or control of the Property by foreclosure, mortgagee in possession
or otherwise, Lender shall not be liable in any way for any injury or damage to
person or property sustained by any person or persons, firm, or corporation in
or about the Property, except to the extent any such injury or damage is caused
by Lender's gross negligence or willful misconduct. Until Lender takes title to
or possession or control of the Property by foreclosure, mortgagee in possession
or otherwise, this Mortgage shall not be deemed to impose upon Lender any of the
obligations or duties of the landlord or Borrower provided in any Lease.
14. Estoppel Certificate.
Borrower shall, within 10 days after Lender's written request, furnish
Lender with a written statement, duly acknowledged, setting forth the sums
secured by the Loan Documents and any right of set-off, counterclaim or other
defense which exists against such sums and the Obligations.
15. Transfers of the Property or Beneficial Interest in Borrower; Assumption.
(a) Except as permitted in Paragraphs 15(b) and 15(c) below, Borrower
agrees that Borrower shall not, without the prior written consent of Lender,
sell or transfer the Property or any part thereof or any interest therein;
(b) a sale or transfer of the Property within the meaning of this
Paragraph 15 shall be deemed to include, (i) an installment sales agreement
wherein Borrower agrees to sell the Property or any part thereof for a price to
be paid in installments; (ii) an agreement by Borrower leasing all or a
substantial part of the Property for other than actual occupancy by a space
tenant thereunder or a sale, assignment or other transfer of, or the grant of a
security interest in, Borrower's right, title and interest in and to all or
substantially all of the Leases or Rents; (iii) if Borrower, or if any general
partner or managing member of Borrower is a corporation, the voluntary or
involuntary sale, conveyance, transfer or pledge of more than 49% of such
corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) whether in one
transfer or a series of transfers or the creation or issuance of new stock by
which an aggregate of more than 49% of such corporation's stock shall be vested
in a party or parties who are not now stockholders whether in one transfer or a
series of transfers; (iv) if Borrower or any general partner or managing member
of Borrower is a limited or general partnership or joint venture, the change,
removal or resignation of a general partner or managing partner, or the transfer
or pledge of the partnership interest of any general partner or managing partner
of such partnership or any profits or proceeds relating to such partnership
interest or the transfer of more than 49% in the aggregate of any limited
partnership interests in such partnership whether in one transfer or a series of
transfers; (v) if Borrower or any general partner or managing member of Borrower
is a limited liability company,
the change, removal or resignation of the managing member of such company or any
profits or proceeds relating to such membership interest or the transfer of more
than 49% in the aggregate of any membership interests in such company whether in
one transfer or a series of transfers; and (vi) without limitation to the
foregoing, except as permitted in (iii) (iv) and (v) above, any voluntary or
involuntary sale, transfer, conveyance or pledge by any person or entity which
directly or indirectly controls Borrower (by operation of law or otherwise) of
its direct or indirect controlling interest in Borrower.
(c) Anything herein to the contrary notwithstanding, the following
transfers shall be permitted:
(i) a Family Member Transfer. The transfer of any direct or indirect
interest in any partner of Borrower may without the prior consent
of Lender, be made provided that such transfer shall be to an
Immediate Family Member or shall be a transfer of any limited
partnership interest in a limited partner of Borrower by a limited
partner thereof; provided that any such transfer shall not result
in a termination of Borrower or a change in the management and
control of Borrower. For purposes hereof, "Immediate Family
Member" shall mean with respect to any individual, such
individual's parents, a current or former spouse, siblings or
children or any trust for the benefit of, or other entity wholly
owned by, such individual or such individual's parents, current or
former spouse, siblings or children; or
(ii) a Special Transfer. For purposes hereof, "Special Transfer" shall
mean a sale or transfer of the Property to a transferee (a
"Permitted Transferee") which shall assume in writing all of the
obligations of Borrower under the Loan and provided that:
(1) no Event of Default or event which with the giving of
notice or the passage of time would constitute an Event of Default
shall have occurred and remain uncured;
(2) the Permitted Transferee and Principal shall be a
reputable entity or person of good character, creditworthy, with
sufficient financial worth considering the obligations assumed and
undertaken, as reasonably determined by Lender;
(3) the Permitted Transferee and its property manager shall
have sufficient experience in the ownership and management of
properties similar to the Property satisfactory to Lender in its
reasonable discretion and Lender shall be provided with reasonable
evidence thereof (and reserves the right to approve the Permitted
Transferee without approving the substitution of the property
manager, if any);
(4) Lender shall have received evidence in writing from any
applicable rating agencies to the effect that such a sale and
assumption of
the Loan by such purchaser will not result in a qualification,
withdrawal or downgrade of the ratings in effect immediately prior
to such sale for any securities issued in connection with any
securitization of the Loan which are then outstanding;
(5) the Permitted Transferee shall have executed and
delivered to Lender an assumption agreement in form and substance
reasonably acceptable to Lender, evidencing such Permitted
Transferee's agreement to abide and be bound by the terms of the
Note, this Mortgage and the other Loan Documents, together with
such legal opinions and title insurance endorsements as may be
reasonably requested by Lender;
(6) Lender shall have received payment of a transferee fee
in an amount equal to one percent (1.0%) of the outstanding
principal balance of the Indebtedness; and
(7) Lender shall have received payment of all costs and
expenses incurred by Lender in connection with such assumption
(including reasonable attorney's fees and costs),
provided further, however, that the right to effectuate a Special
Transfer shall only be available in connection with the first
three (3) sales or transfers of the Property subsequent to the
closing of the Loan; or
(iii) an Affiliate Transfer. For purposes hereof, "Affiliate Transfer"
shall mean a sale or transfer of the Property to a transferee (an
"Affiliate Transferee") which shall assume in writing all of the
obligations of Borrower under the Loan with no release of
Principals and provided that:
(1) no Event of Default or event which with the giving of
notice or the passage of time would constitute an Event of Default
shall have occurred and remain uncured;
(2) the Affiliate Transferee shall be a reputable entity or
person of good character, creditworthy, with sufficient financial
worth considering the obligations assumed and undertaken, as
reasonably determined by Lender;
(3) such Affiliate Transferee is either a limited
partnership or limited liability company of which Xxxxxx X.
Xxxxxxx, Xx. is the general partner or managing member,
respectively, or some other entity directly or indirectly
controlled by Xxxxxx X. Xxxxxxx, Xx.;
(4) Lender shall have received evidence in writing from any
applicable rating agencies to the effect that such a sale and
assumption of the Loan by such purchaser will not result in a
qualification, withdrawal or
downgrade of the ratings in effect immediately prior to such sale
for any securities issued in connection with any securitization of
the Loan which are then outstanding;
(5) the Affiliate Transferee shall have executed and
delivered to Lender an assumption agreement in form and substance
reasonably acceptable to Lender, evidencing such Affiliate
Transferee's agreement to abide and be bound by the terms of the
Note, this Mortgage and the other Loan Documents, together with
such legal opinions and title insurance endorsements as may be
reasonably requested by Lender; and
(6) Lender shall have received payment of all costs and
expenses incurred by Lender in connection with such assumption
(including reasonable attorney's fees and costs).
provided further, however, that the right to effectuate an
Affiliate Transfer shall only be available in connection with the
first three such transfers subsequent to the closing of the Loan.
16. No Additional Liens.
Borrower covenants not to execute any mortgage, security agreement,
assignment of leases and rents or other agreement granting a lien (except the
liens granted to Lender or permitted by the Loan Documents) or, except as set
forth in Paragraph 2 above, take or fail to take any other action which would
result in a lien against the Property or the interest of Borrower in the
Property without the prior written consent of Lender, provided, however, that in
the case of an involuntary lien, Borrower shall have 10 days after prior written
notice from Lender to remove, bond over or otherwise satisfy such lien.
17. Single Asset Entity.
Borrower shall not hold or acquire, directly or indirectly, any ownership
interest (legal or equitable) in any real or personal property other than the
Property, or become a shareholder of or member or partner in any entity that
acquires or holds any property other than the Property, until such time as the
Indebtedness has been fully repaid and all Obligations are satisfied. Borrower's
articles of incorporation, partnership agreement or operating agreement, as
applicable, limit its purpose to the acquisition, operation and disposition of
the Property, and such purposes shall not be amended without the prior written
consent of Lender. Borrower covenants:
(a) To maintain its assets, accounts, books, records, financial
statements, stationery, invoices, and checks separate from and not
commingled with any of those of any other person or entity;
(b) To conduct its own business in its own name, pay its own
liabilities out of its own funds, pay the salaries of its own employees,
allocate fairly and reasonably any
overhead for shared employees and office space, and to maintain an
arm's-length relationship with its affiliates;
(c) To hold itself out as a separate entity, correct any known
misunderstanding regarding its separate identity, maintain adequate
capital in light of its contemplated business operations, and observe all
organizational formalities;
(d) Not to amend its organizational documents without Lender's
approval;
(e) Not to guarantee or become obligated for the debts of any
other entity or person or hold out its credit as being available to
satisfy the obligations of others, including not acquiring obligations or
securities of its partners, members or shareholders; and
(f) Not to pledge its assets for the benefit of any other entity
or person or make any loans or advances to any person or entity.
18. Borrower and Lien Not Released.
Without affecting the liability of Borrower or any other person liable
for the payment of the Indebtedness, and without affecting the lien or charge of
this Mortgage as security for the payment of the Indebtedness, Lender may, from
time to time and without notice to any junior lien holder or holder of any right
or other interest in and to the Property: (a) release any person so liable, (b)
waive or modify any provision of this Mortgage or the other Loan Documents or
grant other indulgences, (c) release all or any part of the Property, (d) take
additional security for any obligation herein mentioned, (e) subordinate the
lien or charge of this Mortgage, (f) consent to the granting of any easement, or
(g) consent to any map, plat or plan of the Property.
19. Uniform Commercial Code Security Agreement.
This Mortgage shall constitute a security agreement pursuant to the
Uniform Commercial Code for any of the items specified herein as part of the
Property which, under applicable law, may be subject to a security interest
pursuant to the Uniform Commercial Code, and Borrower hereby grants Lender a
security interest in said items. Any reproduction of this Mortgage or of any
other security agreement or financing statement shall be sufficient as a
financing statement. In addition, Borrower agrees to execute and deliver to
Lender any financing statements, as well as extensions, renewals and amendments
thereof, and reproductions of this Mortgage in such form as Lender may require
to perfect a security interest with respect to said items. Borrower shall pay
all costs of filing such financing statements and any extensions, renewals,
amendments and releases thereof, and shall pay all reasonable costs and expenses
of any record searches for financing statements Lender may reasonably require.
Lender shall have the remedies of a secured party under the Uniform Commercial
Code.
20. Events of Default; Acceleration of Indebtedness; Remedies.
The occurrence of any one or more of the following events shall
constitute an "Event of Default" under this Mortgage:
(a) failure of Borrower to pay, within 10 days of the due date,
any of the Indebtedness, including any payment due under the Note or any
other Loan Documents; or
(b) failure of Borrower to strictly comply with Paragraphs 11, 15,
16 and 17 of this Mortgage; or
(c) a petition under any Chapter of Title 11 of the United States
Code or any similar law or regulation is filed by or against Borrower or
any Principal (and in the case of an involuntary petition in bankruptcy,
such petition is not discharged within 90 days of its filing), or a
custodian, receiver or trustee for any of the Property is appointed, or
Borrower or any Principal makes an assignment for the benefit of
creditors, or any of them are adjudged insolvent by any state or federal
court of competent jurisdiction, or an attachment or execution is levied
against any of the Property not discharged within 90 days; or
(d) the occurrence of an "Event of Default" under and as defined
in any other Loan Document; or
(e) Borrower is in default in the payment of any material
indebtedness (other than the Indebtedness) and such default is declared
and is not cured within the time, if any, specified therefor in any
agreement governing the same; or
(f) any statement, report or certificate made or delivered to
Lender by Borrower or any Principal is not materially true and complete
when made; or
(g) failure of Borrower, within 30 days after written notice and
demand from Lender, to satisfy each and every Obligation, other than
those set forth in the subparagraphs above; provided, however, if such
failure to satisfy such Obligation cannot by its nature be cured within
30 days, and if Borrower commences to cure such failure promptly after
written notice thereof and thereafter diligently pursues the curing
thereof (and then in all events cures such failure within 60 days after
the original notice thereof unless further extended as reasonably
determined by Lender) Borrower shall not be in default hereunder during
such period of diligent curing.
Upon the occurrence of an Event of Default, the Indebtedness, at the
option of the Lender, shall become immediately due and payable without notice to
Borrower, and Lender shall be entitled to all of the rights and remedies
provided in the Loan Documents or at law or in equity. Each remedy provided in
the Loan Documents is distinct and cumulative to all other rights or remedies
under the Loan Documents or afforded by law or equity, and may be exercised
concurrently, independently, or successively, in any order whatsoever.
21. Entry; Foreclosure; Remedies.
Upon the occurrence of an Event of Default, (a) Borrower, upon demand of
Lender, shall forthwith surrender to Lender the actual possession, or to the
extent permitted by law, Lender itself, or by such officers or agents as it may
appoint, may enter and take possession of all or any part of the Property, and
may exclude Borrower and its agents and employees wholly therefrom, and may have
joint access with Borrower to the books, papers and accounts of Borrower; and
(b) if Borrower shall for any reason fail to surrender or deliver the Property
or any part thereof after such demand by Lender, Lender may obtain a judgment or
decree conferring on Lender the right to immediate possession or requiring the
delivery to Lender of the Property, and Borrower specifically consents to the
entry of such judgment or decree. Upon every such entering upon or taking of
possession, Lender may hold, store, use, operate, manage and control the
Property and conduct the business thereof. Lender shall have no liability for
any loss, damage, injury, cost or expense resulting from any action or omission
by it or its representatives which was taken or omitted in good faith.
When the Indebtedness or any part thereof shall become due, whether by
acceleration or otherwise, Lender may, either with or without entry or taking
possession as herein provided or otherwise, proceed by suit or suits at law or
in equity or by any other appropriate proceeding or remedy to (a) enforce
payment of the Note or the performance of any term, covenant, condition or
agreement of Borrower under any of the Loan Documents, (b) foreclose the lien
hereof for the Indebtedness or part thereof and sell the Property as an entirety
or otherwise, as Lender may determine, and/or (c) pursue any other right or
remedy available to it under or by the law and decisions of the State in which
the Property is located. The failure to join any tenant or tenants of the
Property as a party defendant in any foreclosure action or the failure of any
such order or judgment to foreclose their rights shall not be asserted by the
Borrower as a defense in any civil action instituted to collect the
Indebtedness, or any part thereof, any statute or rule of law at any time
existing to the contrary notwithstanding.
Upon any foreclosure sale, Lender may bid for and purchase the Property
and shall be entitled to apply all or any part of the Indebtedness as a credit
to the purchase price.
Upon the occurrence of an Event of Default, then, without further notice
to or the consent of Borrower, Lender shall be entitled to exercise all of the
rights and remedies contained in this Mortgage or in any other Loan Document or
otherwise available at law or in equity including the right to do any one or
more of the following:
(a) To lawfully enter upon, take possession of and manage the
Property for the purpose of collecting the Rents;
(b) To require Borrower to hold all Rents collected in trust for
the benefit of Lender;
(c) Dispossess by the usual summary proceedings any Tenant
defaulting in the payment of Rent to Borrower;
(d) Lease the Property or any part thereof;
(e) Repair, restore, and improve the Property;
(f) Apply the Rent after payment of Property expenses as
determined by Lender to Borrower's indebtedness under the Loan Documents;
and
(g) Apply to any court of competent jurisdiction for specific
performance of this Mortgage, an injunction against the violation hereof
and/or the appointment of a receiver.
In any action to foreclose the lien or liens of this Mortgage, including
a partial foreclosure, no defense, counterclaim (other than a mandatory or
compulsory counterclaim), or setoff shall be available to the Borrower other
than one which (i) asserts that all moneys owed have been paid, (ii) denies the
existence or sufficiency of the facts upon which the action is grounded or (iii)
raises an issue concerning the priority of liens or the statute of limitations
or other bar to an action based on the passage of time. If any defense,
counterclaim (other than a mandatory or compulsory counterclaim) or setoff,
other than one permitted by the preceding sentence, is timely raised in such
foreclosure action, such defense, counterclaim, or setoff shall be dismissed;
provided, however, that if such defense, counterclaim or setoff is based on a
claim which could be tried in an action for money damages, such claim may be
brought in a separate action which shall not thereafter be consolidated with
such foreclosure action. The bringing of such separate action for money damages
shall not be deemed to afford any grounds for staying the foreclosure action.
Any assignee of this Mortgage and the Note shall take the same free and clear of
all offsets, counterclaims, or defenses which are unrelated to such documents
which the Borrower may have against any assignor of this Mortgage and the Note,
other than one permitted by the first sentence of this paragraph, and no such
unrelated offset, counterclaim, or defense shall be interposed or asserted by
the Borrower against any such assignee in any action or proceeding brought by
any such assignee upon this Mortgage or the Note and any such right to interpose
or assert any such offset, counterclaim, or defense against such assignee in any
such action or proceeding is hereby expressly waived by the Borrower. In
addition, the Borrower shall not make, nor be entitled to make, any claim for
money damages against the Lender based upon any claim or assertion that the
Lender has unreasonably withheld or delayed the Lender's consent and/or approval
with respect to any provisions contained in the Note, this Mortgage or any other
document which provides, in effect, that the Lender's consent and/or approval is
required and shall not be unreasonably withheld or delayed, except that nothing
herein shall prevent a claim for direct monetary damages in the event Lender or
its agents have been grossly negligent or guilty of fraudulent or illegal acts
or willful misconduct. The Borrower's sole remedy in such event shall be limited
to an action or proceeding to enforce any such provision pursuant to specific
performance, injunction, or declaratory judgment (except in the event of such
gross negligence or willful misconduct.)
Any sale of the Property or any part thereof or any interest therein
under or by virtue of this Mortgage, whether pursuant to foreclosure or power of
sale or otherwise, shall forever be a perpetual bar against the Borrower's right
to reacquire the Property.
If the unpaid principal amount of and the premium, if any, and interest
on the Note at the time outstanding shall have become due and payable and shall
not have been paid when due after any applicable notice and cure period, the
Lender may sell, assign, transfer and deliver the whole
or, from time to time, any part of the Property, or any interest in any part
thereof, at any private sale or at public auction, with or without demand,
advertisement or notice, for cash, on credit or for other property, for
immediate or future delivery, and for such price or prices and on such terms as
the Lender in its sole discretion may determine, or as may be required by law or
permitted herein. The Lender is hereby granted a power of sale with respect
thereto.
22. Expenditures and Expenses.
In any civil action to foreclose the lien hereof or otherwise enforce
Lender's rights, there shall be allowed and included as additional Indebtedness
in the order or judgment for foreclosure and sale or other order all
expenditures and expenses which may be paid or incurred by or on behalf of
Lender, including attorneys' fees, costs and expenses, receiver's fees, costs
and expenses, appraiser's fees, engineers' fees, outlays for documentary and
expert evidence, stenographers' charges, publication costs, and costs (which may
be estimates as to items to be expended after entry of said order or judgment)
of procuring all such abstracts of title, title searches and examination, title
insurance policies, Torrens' Certificates and similar data and assurances with
respect to the title as Lender may deem reasonably necessary either to prosecute
such civil action or to evidence to bidders at any sale which may be had
pursuant to such order or judgment the true condition of the title to, or the
value of, the Property (said expenditures and expenses are hereinafter
collectively referred to as the "Reimbursable Expenses"). All Reimbursable
Expenses, and such costs, expenses and fees as may be incurred by Lender at any
time or times hereafter in the protection of the Property, in maintaining
required insurance, in enforcing the Obligations, and/or the maintenance of the
lien established by any of the Loan Documents, including accountants' and
attorneys' fees, costs and expenses in any advice, litigation, or proceeding
affecting the Loan Documents or the Property, whether instituted by Lender,
Borrower or any other party, or in preparation for the commencement or defense
of any action or proceeding or threatened action or proceeding, shall be
immediately due and payable to Lender by Borrower, with interest thereon at the
Default Rate after the expiration of any applicable notice and cure period as
provided herein and as set forth in the Note, and shall be secured by the Loan
Documents. In addition, Borrower shall be liable for the payment of all
commissions and brokerage fees relating to the Loan.
23. Application of Proceeds of Foreclosure Sale.
The proceeds of any foreclosure sale of the Property shall be distributed
and applied in the order of priority set forth in the Note with the excess, if
any, being applied to any parties entitled thereto as their rights may appear.
24. Appointment of Receiver or Mortgagee in Possession.
If an Event of Default is continuing or if Lender shall have accelerated
the Indebtedness, Lender, upon application to a court of competent jurisdiction,
shall be entitled as a matter of strict right, without further notice, and
without regard to the occupancy or value of any security for the Indebtedness or
the insolvency of any party bound for its payment, to the appointment of a
receiver or the appointment of Lender to take possession of and to operate the
Property, and to collect and apply the rents, issues, profits and revenues
thereof.
25. Forbearance by Lender Not a Waiver.
Any forbearance by Lender in exercising any right or remedy under any of
the Loan Documents, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any right or remedy. Lender's acceptance
of payment of any sum secured by any of the Loan Documents after the due date of
such payment shall not be a waiver of Lender's right to either require prompt
payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the payment of
taxes or other liens or charges by Lender shall not be a waiver of Lender's
right to accelerate the maturity of the Indebtedness, nor shall Lender's receipt
of any awards, proceeds or damages under Paragraph 5 hereof operate to cure or
waive Borrower's default in payment of sums secured by any of the Loan
Documents. With respect to all Loan Documents, only waivers made in writing by
Lender shall be effective against Lender.
26. Waiver of Statute of Limitations.
Borrower hereby waives the right to assert any statute of limitations as
a bar to the enforcement of the lien created by any of the Loan Documents or to
any action brought to enforce the Note or any other obligation secured by any of
the Loan Documents.
27. Waiver of Homestead and Redemption.
Borrower hereby waives all right of homestead exemption in the Property.
Borrower hereby waives all right of redemption on behalf of Borrower and on
behalf of all other persons acquiring any interest or title in the Property
subsequent to the date of this Mortgage, except decree or judgment creditors of
Borrower.
28. Jury Trial Waiver.
BORROWER AND LENDER BY ITS ACCEPTANCE OF THIS MORTGAGE HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON, OR
ARISING OUT OF THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS. BORROWER AND LENDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH OF THEM HAS RELIED ON THIS WAIVER IN ENTERING INTO THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER
REPRESENT AND WARRANT THAT EACH HAS HAD THE OPPORTUNITY TO REVIEW THIS JURY
WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS.
29. Notice.
Except for any notice required under applicable law to be given in
another manner, (a) any notice to Borrower provided for in the Loan Documents
shall be given by sending such notice by Federal Express or any other overnight
carrier addressed to Borrower at Borrower's address stated
above or at such other address as Borrower may designate by notice to Lender as
provided herein, and (b) any notice to Lender shall be given by Federal Express
or any other overnight carrier to Lender's address stated above or to such other
address as Lender may designate by notice to Borrower as provided herein. Any
notice provided for in the Loan Documents shall be deemed to have been given to
Borrower or Lender on the first business day following such sending in the
manner designated herein.
30. Successors and Assigns Bound; Joint and Several Liability; Agents;
Captions.
The covenants and agreements contained in the Loan Documents shall bind,
and the rights thereunder shall inure to, the respective successors and assigns
of Lender and Borrower, subject to the provisions of Paragraph 15 hereof. In
exercising any rights under the Loan Documents or taking any actions provided
for therein, Lender may act through its employees, agents or independent
contractors as authorized by Lender. The captions and headings of the paragraphs
of this Mortgage are for convenience only and are not to be used to interpret or
define the provisions hereof.
31. Governing Law; Severability.
This Mortgage shall be governed by, and shall be construed and enforced
in accordance with, the internal laws of the State of Illinois without regard to
conflicts of law principles, provided, however, that to the extent the mandatory
provisions of the laws of another jurisdiction relating to (i) the perfection or
the effect of perfection or non-perfection of the security interests in any of
the Property, (ii) the lien, encumbrance or other interest in the Property
granted or conveyed by this Mortgage, or (iii) the availability of and
procedures relating to any remedy hereunder or related to this Mortgage are
required to be governed by such other jurisdiction's laws, such other laws shall
be deemed to govern and control. The invalidity, illegality or unenforceability
of any provision of this Mortgage and the Loan Documents shall not affect or
impair the validity, legality or unenforceability of the remainder of this
Mortgage and the other Loan Documents, and to this end, the provisions of this
Mortgage and the other Loan Documents are declared to be severable.
32. Release.
Upon payment of all sums secured by this Mortgage, Lender shall release
this Mortgage. Borrower shall pay Lender's reasonable costs incurred in
releasing this Mortgage and any financing statements related hereto.
33. Terms.
As used in the Loan Documents, (i) "business day" means a day when banks
are not required or authorized to be closed in Chicago, Illinois; and (ii) the
words "include" and "including" shall mean "including but not limited to" unless
specifically set forth to the contrary. All capitalized terms used herein and
not otherwise defined shall have the same meanings ascribed to them in the Note
and/or the other Loan Documents.
34. Loss of Note.
Upon notice from Lender of the loss, theft, or destruction of the Note
and upon receipt of indemnity from Lender reasonably satisfactory to Borrower,
or in the case of mutilation of the Note, upon surrender of the mutilated Note,
Borrower shall make and deliver a new note of like tenor in lieu of the then to
be superseded Note.
35. Exculpation.
This Mortgage and other Loan Documents and all of Borrower's obligations
hereunder and thereunder are subject to the provisions of Paragraph 10 of the
Note entitled Exculpation and which are incorporated herein and therein by this
reference.
36. Disclosure of Information.
Lender shall have the right (but shall be under no obligation) to make
available to any necessary and appropriate party for the purpose of granting
participations in or selling, transferring, assigning or conveying all or any
part of the Loan (including any governmental agency or authority and any
prospective bidder at any foreclosure sale of the Property) any and all
information which Lender may have with respect to the Property and Borrower,
whether provided by Borrower, any Principal or any third party or obtained as a
result of any environmental assessments. Borrower agrees that Lender shall have
no liability whatsoever as a result of delivering any such information to any
third party, and Borrower, on behalf of itself and its successors and assigns,
hereby releases and discharges Lender from any and all liability, claims,
damages, or causes of action, arising out of, connected with or incidental to
the delivery of any such information to any third party.
37. Sale of Loan; Securitization.
Lender, at any time and without the consent of Borrower or any Principal,
may grant participations in or sell, transfer, assign and convey all or any
portion of its right, title and interest in and to the Loan, this Mortgage and
the other Loan Documents, any guaranties given in connection with the Loan and
any collateral given to secure the Loan. In addition, at any time and without
the consent of Borrower or any Principal, Lender may securitize the Loan.
Borrower covenants to reasonably cooperate with Lender's efforts in the sale or
rating and securitization of the Loan; such cooperation includes Borrower's
obligation to (a) make non-material modifications of the Loan Documents (such
modifications shall not increase the amount of the Indebtedness), (b) provide
additional information regarding Borrower's financial statements, (c) deliver
updated information regarding Borrower and the Property, (d) review Lender's
securitization offering materials to the extent such materials relate to
Borrower, the Property or the Loan and (e) reasonably respond to any inquiries
of Lender or other party relating thereto; provided such cooperation does not
require Borrower to incur any cost or expense, or Lender has advanced funds to
cover such costs and expenses. Borrower agrees to represent and warrant the
absence of misstatements and/or omissions in the information relating to
Borrower, the Property and the Loan that is contained in the offering materials
and which has been furnished to or approved by Borrower. Borrower shall not be
liable for Lender's post-closing costs incurred pursuant to any sale or
securitization of the Loan by Lender.
38. Exhibits and Riders.
The following Exhibits and Riders (which may contain additional
representations, warranties, and covenants) are attached to this Mortgage and
hereby made a part of this Mortgage: Exhibit A (legal description for Land).
39. Lien Law.
Pursuant to Section 13 of the New York Lien Law, Borrower shall receive
the advances secured hereby and shall hold the right to receive such advances as
a trust fund to be applied first for the purpose of paying the cost of any
improvement and shall apply such advances first to the payment of the cost of
any such improvement on the Property before using any part of the total of the
same for any other purpose. Borrower will indemnify and hold Lender harmless
against any loss or liability, cost or expense, including, without limitation,
any judgments, attorney's fees, costs of appeal bonds and printing costs,
arising out of or relating to any proceeding instituted by any claimant alleging
a violation by Borrower of any applicable lien law including, without
limitation, any section of Article 3-A of the New York Lien law.
40. Property Improvements.
The Property is not principally improved or to be improved by one or more
structures containing in the aggregate not more than six residential dwelling
units, each dwelling unit having its own separate cooking facilities.
41. Consolidation.
This Mortgage is intended to amend and restate in their entirety the
provisions of the Existing Mortgages, but the execution and delivery of this
Mortgage shall not in any way be deemed to create a new principal indebtedness
or impair the liens of the Existing Mortgages. Borrower and Lender certify that
(a) this Mortgage secures the principal indebtedness that is secured by the
Existing Mortgages and secures no further or other principal indebtedness or
obligation and (b) the maximum aggregate principal amount secured hereby at the
execution hereof, or which under any contingency may be secured hereby at any
time, is $32,000,000.
IN WITNESS WHEREOF, Borrower has executed this Mortgage or has caused the
same to be executed by its representatives thereunto duly authorized.
BORROWER:
000 Xxxxx Xxxxxx Limited Partnership,
a Delaware limited partnership
By: 475 Fifth-GP, Inc., a Delaware
corporation, its sole general partner
By: _________________________________
Name: _______________________________
Its: ________________________________
STATE OF ____________ )
) SS
COUNTY OF __________ )
I, ____________________________, a Notary Public in and for said County,
in the State aforesaid, DO HEREBY CERTIFY, that ___________________, the
__________ president of 475 Fifth_GP, Inc., a Delaware corporation ("Corporate
G.P.") and the general partner in 000 Xxxxx Xxxxxx Limited Partnership, a
Delaware limited partnership, who is personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such officer in
such Corporate G.P., appeared before me this day in person and acknowledged that
(he/she) signed and delivered the said instrument as (his/her) own free and
voluntary act, as the free and voluntary act of Corporate G.P., and as the free
and voluntary act of said limited partnership, for the uses and purposes therein
set forth.
GIVEN under my hand and Notarial Seal this ____ day of _______________,
1999.
------------------------
Notary Public
My Commission Expires:
----------------------
EXHIBIT A
LEGAL DESCRIPTION
