Exhibit 10.1
CONSOLIDATION, EXTENSION AND MODIFICATION AGREEMENT
AGREEMENT made the 30th day of June, 2008, by and between CAPITAL ONE,
N.A., having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter, at times, the "Mortgagee") and CVD EQUIPMENT CORPORATION, a New
York corporation with an address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (hereinafter, at times, the "Mortgagor").
W I T N E S S E T H:
WHEREAS, the Mortgagor is the owner of the premises located at, and known
as, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of Ulster, and State of
New York and formally described on the Tax Maps of the said County of Ulster as
Section 17.4, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇ and described in Schedule A annexed hereto and
made a material part hereof (hereinafter referred to at times as the
"Premises"); and
WHEREAS, the Mortgagee is the owner and holder of the following notes and
mortgages, to wit:
(1) a Note dated November 14, 1988 made by Kidco Realty Corp. in favor of
Dutchess Bank & Trust Company, in the principal sum of Five Hundred Thousand and
00/100 ($500,000.00) Dollars and interest thereon Note (the "1988 Note"); and
(2) a Mortgage dated November 14, 1988 made by Kidco Realty Corp. to
Dutchess Bank & Trust Company in the principal sum of $500,000.00 and recorded
in the office of the Ulster County Clerk on November 16, 1988 in Liber 1905,
page 293 (the "1988 Mortgage"); and
(3) a Note dated April 29, 1999 made by CVD Equipment Corporation in favor
of Kidco Realty, Ltd., in the principal sum of Six Hundred Two Thousand Five
Hundred Three and 13/100 ($602,503.13) Dollars and interest thereon (the "Kid1
Note"); which such 1988 Note and Kid1 Note were consolidated and superseded by
an Amended Restated and Consolidated Promissory Note made by CVD Equipment
Corporation in favor of Kidco Realty, Ltd., in the principal sum of Nine Hundred
Thousand and 00/100 ($900,000.00) Dollars and interest thereon (the "1999
Note"); and
(4) a Mortgage dated April 29, 1999 made by CVD Equipment Corporation to
Kidco Realty Ltd. in the principal sum of $602,503.13 and recorded in the office
of the Ulster County Clerk on June 3, 1999 in Liber 4099, page 105 (the "1999
Mortgage"); and
which such 1988 Mortgage and 1999 Mortgage were consolidated by a Consolidation
Agreement dated April 29, 1999 (the "1999 CEMA"), made by and between CVD
Equipment Corporation and Kidco Realty Ltd., and recorded in the office of the
Ulster County Clerk on June 3, 1999 in Liber 2927, page 239, to form a single
lien in the consolidated amount of $900,000.00; and
which such Consolidation Agreement was corrected by a Correction Consolidation
Agreement made by and between Kidco Realty Ltd. and CVD Equipment Corporation
dated as of April 29, 1999 and recorded in the office of the Ulster County Clerk
on March 13, 2001 in Liber 3137, page 261;
which such 1988 Mortgage and 1999 Mortgage, as consolidated, are being assigned
by Kidco Realty Ltd., as assignor, to Capital One, N.A., as assignee, by
Assignment of Mortgage dated June _____, 2008, and to be recorded in the Office
of the Ulster County Clerk simultaneously herewith (the "Assignment"); and
which such 1988 Mortgage and 1999 Mortgage, as consolidated, have a principal
balance of $788,063.50 as of the date hereof; and
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(5) a Note dated June 30, 2008 made by CVD Equipment Corporation in favor
of Capital One, N.A., in the principal amount of Sixteen Thousand Nine Hundred
Thirty Six and 50/100 ($16,936.50) Dollars and interest thereon (the "2008
Note"); and
(6) a Mortgage and Security Agreement dated June 9, 2008 made by CVD
Equipment Corporation, as mortgagor, in favor of Capital One, N.A., as
mortgagee, in the principal amount of Sixteen Thousand Nine Hundred Thirty Six
and 50/100 ($16,936.50) Dollars and interest thereon, and to be recorded in the
Office of the Ulster County Clerk simultaneously herewith (the "2008 Mortgage").
(the 1988 Mortgage, the 1999 Mortgage, the 1999 CEMA and the 2008 Mortgage,
are hereinafter referred to, collectively, as the "Mortgage", and the 1988 Note,
the Kid1 Note the 1999 Note and the 2008 Note, as replaced by a Consolidated and
Restated Mortgage Note dated June 30, 2008 made by CVD Equipment Corporation in
favor of Capital One, N.A., in the principal amount of Eight Hundred Five
Thousand and 00/100 ($805,000.00) Dollars, are hereinafter referred to
collectively as the "Note"); and
WHEREAS, there is now due and owing on the Note and Mortgage, without
offset, deduction or counterclaim the principal sum of EIGHT HUNDRED FIVE
THOUSAND AND 00/100 ($805,000.00) DOLLARS; and
WHEREAS, the Mortgagee and the Mortgagor have mutually agreed to (1)
consolidate, coordinate, combine and spread the liens of the Mortgage and the
Note; (2) extend the payment of the indebtedness secured by the Mortgage and the
Note; and (3) modify, amend and restate the terms of the Mortgage and the Note
in the manner hereinafter set forth.
NOW, THEREFORE, in pursuance of said agreement and in consideration of the
sum of One ($1.00) Dollar and other valuable consideration each to the other in
hand paid, receipt and sufficiency of which is hereby acknowledged, the parties
hereto mutually covenant and agree as follows:
A. That the liens of the Mortgage and the Note are hereby consolidated,
coordinated, combined and spread so that together they shall constitute
hereinafter in law but one mortgage, a single lien covering and encumbering the
Premises securing the principal sum of EIGHT HUNDRED FIVE THOUSAND AND 00/100
($805,000.00) DOLLARS together with the interest accruing from and after the
date hereof.
B. That the terms, covenants and provisions of the Mortgage and the Note
are hereby modified, amended and restated so that henceforth the terms,
covenants and provisions of this Agreement shall supersede the terms, covenants
and provisions of the Mortgage and Note and the terms, covenants and provisions
of the Mortgage and Note shall read the same as the following paragraphs
contained in this Agreement, and the Mortgage and Note, as so modified, amended
and restated, are hereby ratified and confirmed in all respects by the
Mortgagors. All references to the "Mortgage" and the "Note" shall hereinafter
refer to the same as coordinated, combined, consolidated, spread, modified,
amended and restated pursuant to the provisions of this Agreement.
C. For value received, the Mortgagor agrees to pay all sums due and owing
under the Note and all sums secured by the Mortgage on July 1, 2018 (the
"Maturity Date"); PROVIDED, HOWEVER, that the Mortgagor meanwhile repays the
total [consolidated] principal sum of the Note in the sum of EIGHT HUNDRED FIVE
THOUSAND AND 00/100 ($805,000.00) DOLLARS with interest thereon in accordance
with the terms as stated in the Consolidated and Restated Mortgage Note made by
the Mortgagor in favor of the Mortgagee even date herewith (the "Note") and the
schedule A attached thereto and made a material part thereof, the terms of which
are incorporated herein by reference.
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THE [Consolidated and Restated] NOTE SHALL MATURE ON JULY 1, 2018 WITH ALL SUMS
OF PRINCIPAL, ACCRUED INTEREST AND RELATED CHARGES DUE AND OWING ON SUCH DATE.
Payments shall be applied first to interest on unpaid principal balance of the
Note to the date payment is received by the Mortgagee and then to reduction of
principal. Interest shall be calculated on a 360 day year and actual number of
days elapsed.
Notwithstanding the foregoing, if (i) there shall occur an "Event of Default" as
described in the Note or below or (ii) the Maturity Date shall occur, or (iii)
any sum shall not be paid when it is due hereunder, then from and after any such
occurrence or nonpayment the undersigned shall pay interest to the Holder (or
the Mortgagee) on demand, on the entire principal amount then outstanding under
the Note and/or the Mortgage at the highest rate permitted by law.
In the event of the occurrence of any default under the Note, then, at the
option of the holder of the Note, the entire principal balance and interest due
shall forthwith become due and payable. Neither delay in asserting this right
nor the acceptance of past due payments or the imposition of late charges shall
be deemed a waiver thereof. Upon the happening of any default, the holder of the
Note shall have, in addition to all other rights and remedies, the remedies of a
secured party under the New York Uniform Commercial Code with respect to any
collateral security. Interest on the indebtedness evidenced by the Note after
default or maturity shall be due and payable at the Note rate of interest plus
5.00%, or the highest rate allowed by law, computed from the date to which
interest was last credited, to the date actual payment of the entire
indebtedness.
All of the other terms and conditions of the Note are incorporated herein by
reference with the same force and effect as if set forth at length herein.
Certain Definitions
The Mortgagor and the Mortgagee agree that unless the context otherwise
specifies or requires, the following terms shall have the meanings herein
specified, such definitions to be applicable equally to the singular and to the
plural forms of such terms.
"Chattels" means all fixtures, fittings, appliances, apparatus, equipment,
machinery and articles of personal property, and replacements thereof owned by
Mortgagor, other than those owned by lessees, now or at any time hereafter
affixed to, attached to, placed upon or used in any way in connection with the
complete and comfortable use, enjoyment, occupancy or operation of the
Improvements on the Premises.
"Events of Default" means the events and circumstances described as such in
Section 2.01 hereof.
"Guarantor" means the party or parties who have guaranteed the payment of
the Note.
"Improvements" means all structures and buildings, and replacements
thereof, now or hereafter located upon the Premises, including all equipment,
apparatus, machinery and fixtures of every kind and nature whatsoever forming
part of said structures and/or buildings.
"Intangibles" means all "general intangibles" (as such quoted term is
defined in the Uniform Commercial Code of the state wherein the Premises are
located) in any way relating to the Premises and/or the Improvements and which
the Mortgagor owns, all licenses, trade names, good will and books and records
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relating to the business operated or to be operated on the Premises or any part
thereof, and all unearned premiums, accrued, accruing or to accrue under all
insurance policies now or hereafter obtained by the Mortgagor insuring the
Mortgaged Property, as hereinafter defined, and all rights and interest of
Mortgagor thereunder.
"Involuntary Rate" means the Interest Rate provided in the Note plus five
(5%) percent, but in no event to exceed the maximum rate allowed by law.
"Premises" means the premises described in Schedule A hereto, including all
of the air space, easements, rights, privileges, royalties and appurtenances
thereunto belonging or in any way appertaining, and all of the estate, right,
title, interest, claim or demand whatsoever of the Mortgagor therein and in the
streets, alleys and ways adjacent thereto, either at law or in equity, in
possession or expectancy, now or hereafter acquired.
All terms of this Mortgage which are not defined above have the meaning set
forth in this Mortgage.
Granting Clause
NOW, THEREFORE, the Mortgagor, in consideration of the premises and in
order to secure payment of both the principal of the Note and the interest and
any other sums payable thereon, and/or under this Mortgage and the performance
and observance of all the provisions hereof and of the Note, including the
payment of any sums advanced by the Mortgagee pursuant to this Mortgage
(collectively, all of such obligations are hereinafter referred to as the
"Indebtedness"), hereby gives, grants, bargains, sells, warrants, aliens,
promises, releases, conveys, assigns, transfers, mortgages, hypothecates,
deposits, pledges, sets over and confirms unto the Mortgagee all its estate,
right, title and interest in, to and under any and all of the following
described property (the "Mortgaged Property"), whether now owned or held or
hereafter acquired:
(a) the Premises;
(b) the Improvements;
(c) the Chattels;
(d) the Intangibles;
(e) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, without limitation,
proceeds of hazard and title insurance and condemnation awards;
(f) all leases and lettings of the Premises now or hereafter entered into
and all right, title and interest of the Mortgagor thereunder, including without
limitation, cash or securities deposited thereunder to secure performance by the
lessees of their obligations thereunder, whether such cash or securities are to
be held until the expiration of the terms of such leases or applied to one or
more of the installments of rent coming due immediately prior to the expiration
of such terms, subject to the Mortgagor's right to possess and apply such cash
or securities prior to an Event of Default, including, further, the right, upon
the happening of an Event of Default, to receive and collect the rents
thereunder.
TO HAVE AND TO HOLD unto the Mortgagee, its successors and assigns forever
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together with all the Improvements now or hereafter erected on the Premises to
its and their own proper use and behoof. Further, the Mortgagor does for itself,
its successors and assigns, covenant with the said Mortgagee, its successors and
assigns, that at and until the ensealing of these presents it is well seized of
the Premises in fee simple, and has good right to bargain and sell the same and
that the same are free from all encumbrances whatsoever except such as are
listed as exceptions to title in the title policy insuring the lien of this
Mortgage (the "Permitted Encumbrances").
And furthermore, the Mortgagor does by these presents bind itself and its
successors and assigns forever to warrant and defend the Premises described in
Schedule A to the Mortgagee, its successors and assigns, against all claims and
demands whatsoever except as mentioned herein.
ARTICLE I
Particular Covenants of the Mortgagor
The Mortgagor covenants and agrees as follows:
SECTION 1.01. The Mortgagor represents and warrants that it has a good and
marketable title to an indefeasible fee estate in the Premises subject to no
lien, charge or encumbrance, except the Permitted Encumbrances, if any are
specifically stated in this Mortgage ("Permitted Encumbrances"); that it will
own the Chattels free and clear of liens and claims; that this Mortgage is and
will remain a valid and enforceable first lien on the Mortgaged Property subject
only to the exceptions referred to above; that the execution and delivery of
this Mortgage and the Note has been duly authorized by the Mortgagor and that
there is no provision in any document that evidences or establishes the
existence of the Mortgagor requiring further consent for such action by any
other entity or person; that it is duly organized, validly existing and is in
good standing under the laws of the state of its formation or incorporation, as
the case may be; that it has (i) all necessary licenses, authorizations,
registrations, permits and/or approvals and (ii) full power and authority to own
its properties and carry on its business as presently conducted and the
execution and delivery by it of and performance of its obligations under, this
Mortgage and the Note will not result in the Mortgagor being in default under
any provisions of any document which evidences or establishes the existence of
the Mortgagor or of any mortgage, credit or other agreement to which Mortgagor
is a party or which affects the Mortgagor or the Premises, or any part thereof;
that it will preserve such title, and will forever warrant and defend the same
to the Mortgagee, and will forever warrant and defend the validity and priority
of the lien hereof against the claims of all persons and parties whomsoever
except for the Permitted Encumbrances.
SECTION 1.02. The Mortgagor will, at the sole cost of the Mortgagor, and
without expense to the Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as the Mortgagee shall from time to time
reasonably require, for the better assuring, conveying, assigning, transferring
and confirming unto the Mortgagee the property and rights hereby conveyed or
assigned or intended now or hereafter so to be, or which the Mortgagor may be or
may hereafter become bound to convey or assign to the Mortgagee, or for carrying
out the intention or facilitating the performance of the terms of this Mortgage,
or for filing, registering or recording this Mortgage and, on demand, will
execute and deliver and hereby authorizes the Mortgagee to execute and file in
the name of the Mortgagor to the extent it may lawfully do so, one or more
financing statements, chattel mortgages or comparable security instruments to
evidence more effectively the lien hereof upon the Mortgaged Property or any
part thereof.
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SECTION 1.03. (a) The Mortgagor forthwith upon the execution and delivery
of this Mortgage, and thereafter from time to time, upon reasonable prior
notice, will cause this Mortgage, and any security instrument creating a lien or
evidencing the lien hereof upon the Chattels and/or the Intangibles and each
instrument of further assurance to be filed, registered and/or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien hereof upon, and the
interest of the Mortgagee in, the Mortgaged Property.
(b) The Mortgagor will pay all filing, registration or recording fees, and
all expenses incident to the execution and acknowledgment of this Mortgage, any
mortgage supplemental hereto, any security instrument with respect to the
Chattels or the Intangibles, and any instrument of further assurance, and all
federal, state, county and municipal stamp taxes and other taxes, duties,
impositions, assessments and charges arising out of or in connection with the
execution and delivery of the Note, this Mortgage or any mortgage supplemental
hereto, any security instrument with respect to the Chattels and/or the
Intangibles or any instrument of further assurance.
SECTION 1.04. (a) The Mortgagor shall make punctual payment of the
principal and interest and all other sums to become due in respect of the Note
at the time and place and in the manner specified in the Note, according to the
true intent and meaning thereof, all in any coin or currency of the United
States of America which at the time of such payment shall be legal tender for
the payment of public and private debts.
(b) (i) The Mortgagor agrees that in addition to all payments of principal,
interest, and/or related charges payable to the Mortgagee under the terms of the
Note and/or hereunder, the Mortgagor will pay to the Mortgagee, at the time of
the monthly payments due to the Mortgagee under the terms of the Note,
one-twelfth (1/12) of the total annual [real estate] taxes and one-twelfth
(1/12) of the annual fire insurance premiums upon the Mortgaged Property as
estimated by the Mortgagee. If, at any time, the aforesaid sum is found to be
insufficient to pay said taxes and fire insurance premiums, or the tax reserve
or fire insurance reserve, in the opinion of the Mortgagee is insufficient, the
Mortgagor agrees to pay such deficiency on five (5) days' notice in default
whereof, the whole of the principal sum remaining unpaid, and accrued interest
shall, at the option of the Mortgagee, immediately become due and payable. All
of such funds shall be held in a trust account for the payment of said taxes and
fire insurance premiums as they become due.
(c) All payments mentioned in the preceding subsection of this paragraph
and all payments to be made under the Note secured hereby shall be added
together and the aggregate amount thereof shall be paid by the Mortgagor each
month to be applied by the Mortgagee to the following items in the order that
may be determined at the option of the Mortgagee: (i) taxes, assessments, fire
and other hazard insurance premiums; (ii) unpaid late charges; (iii) interest on
the Note secured hereby; and (iv) reduction of the principal balance of said
Note.
(d) Any excess funds in the real estate tax and insurance escrow funds
shall be credited by the Mortgagee to subsequent real estate taxes and/or
insurance payments to be made by the Mortgagor, or against the outstanding
principal and accrued interest due on the Note guaranteed and secured hereby at
the time of any satisfaction thereof, and if none, then the balance of said
escrow shall be refunded to the Mortgagor.
SECTION 1.05. (a) (i) The Mortgagor, if a corporation, will, so long as it
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is owner of the Mortgaged Property or any part thereof, do all things necessary
to preserve and keep in full force and effect its existence, franchises, rights
and privileges as a business or stock corporation under the laws of the state of
its incorporation and will comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental authority or court applicable
to the Mortgagor or to the Mortgaged Property or any part thereof.
(ii) The Mortgagor, if a limited liability company, will, so long as it is
owner of the Mortgaged Property or any part thereof, do all things necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges as a limited liability company under the laws of the state of its
establishment and will comply with all regulations, rules, ordinances, statutes,
orders and decrees of any governmental authority or court applicable to the
Mortgagor or to the Mortgaged Property or any part thereof.
(b) Nothing in this Section 1.05 shall require the payment or discharge of
any obligation imposed upon the Mortgagor by this Section so long as the
Mortgagor shall in good faith and at its own expense contest the same or the
validity thereof by appropriate legal proceedings which shall operate to prevent
the collection thereof or other realization thereon and the sale or forfeiture
of the Premises or any part thereof to satisfy the same, provided that during
such contest the Mortgagor shall, at the option of the Mortgagee, provide
security satisfactory to the Mortgagee, assuring the discharge of the
Mortgagor's obligation hereunder and of any additional charge, penalty or
expense arising from or incurred as a result of such contest; and provided
further that if, at any time, payment of any obligation imposed upon the
Mortgagor by subsection (a) of this Section shall become necessary to prevent
the delivery of a tax deed, or its equivalent, conveying the Mortgaged Property,
or any part thereof, because of non-payment, then the Mortgagor shall pay the
same in sufficient time to prevent the delivery of such tax deed or its
equivalent.
SECTION 1.06. All right, title and interest of the Mortgagor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, the Mortgaged Property hereafter
acquired by, or released to, the Mortgagor, or constructed, assembled or placed
by the Mortgagor on the Premises or any part thereof, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, conveyance, assignment or other
act by the Mortgagor, shall become subject to the lien of this Mortgage as fully
and completely, and with the same effect, as though now owned by the Mortgagor
and specifically described in the granting clause hereof, but at any and all
times the Mortgagor will execute and deliver to the Mortgagee any and all such
further assurances, mortgages, conveyances or assignments thereof as the
Mortgagee may require for the purpose of expressly and specifically subjecting
the same to the lien of this Mortgage.
SECTION 1.07. (i) (a) The Mortgagor, from time to time when the same shall
become due and payable, will pay and discharge all taxes of every kind and
nature, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges, and all other public
charges whether of a like or different nature, imposed upon or assessed against
the Mortgaged Property, or any part thereof, or upon the revenues, rents,
issues, income and profits of the Mortgaged Property, or any part thereof, or
arising in respect of the occupancy, use or possession thereof. The Mortgagor
will, upon the request of the Mortgagee, deliver to the Mortgagee receipts
evidencing the payment of all such taxes, assessments, levies, fees, rents and
other public charges imposed upon or assessed against the Mortgaged Property, or
any part thereof, or the revenues, rents, issues, income or profits thereof.
(b) The Mortgagor will pay, from time to time when the same shall become
due, all lawful claims and demands of mechanics, materialmen, laborers and
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others, which claims and demands, if unpaid, might result in, or permit the
creation of, a lien on the Mortgaged Property or any part thereof, or on the
revenues, rents, issues, income and profits arising therefrom and in general
will do or cause to be done everything necessary so that the lien of the
Mortgage shall be fully preserved, at the cost of the Mortgagor, without expense
to the Mortgagee.
(c) Nothing in this Section shall require the payment or discharge of any
obligation imposed upon the Mortgagor by this Section so long as the Mortgagor
shall in good faith and at its own expense contest the same or the validity
thereof by appropriate legal proceedings which shall operate to prevent the
collection thereof or other realization thereon and the sale or forfeiture of
the Premises or any part thereof to satisfy the same; provided that during such
contest the Mortgagor shall, at the option of the Mortgagee, provide security
satisfactory to the Mortgagee, assuring the discharge of the Mortgagor's
obligation hereunder and of any additional charge, penalty or expense arising
from or incurred as a result of such contest; and provided further that if, at
any time, payment of any obligation imposed upon the Mortgagor by subsection (a)
of this Section shall become necessary to prevent the delivery of a tax deed, or
its equivalent, conveying the Mortgaged Property, or any part thereof, because
of non-payment, then the Mortgagor shall pay the same in sufficient time to
prevent the delivery of such tax deed or its equivalent.
(ii) (a) At any time during the term of the Mortgage, the Mortgagee shall
have the right to require the Mortgagor to establish an escrow in a sum equal to
the taxes and special assessments next due on the premises covered by the
Mortgage, plus the premiums that will next become due and payable on policies of
fire and other hazard insurance on the premises covered hereby. In such event,
Mortgagor agrees to pay to the Mortgagee, together with the monthly payments of
principal and interest recited in the promissory note of even date herewith,
additional sums (a) to initially create an escrow fund which in Mortgagee's
opinion based on the real estate taxes and insurance premiums next to become due
will be sufficient to pay said real estate taxes and insurance by their due
date; and thereafter to (b) pay to Mortgagee in escrow monthly installments of
one-twelfth of the annual real estate taxes and insurance premiums so that said
real estate taxes and insurance premiums shall be paid on a timely basis as they
become due and payable.
(b) All payments mentioned in the preceding subsection of this paragraph
and all payments to be made under the promissory note secured hereby shall be
added together and the aggregate amount thereof shall be paid by the Mortgagor
each month to be applied by the Mortgagee to the following items in the order
that may be determined at the option of the Mortgagee: (i) taxes, assessments,
fire and other hazard insurance premiums; (ii) unpaid late charges; (iii)
interest on the promissory note secured hereby; and (iv) reduction of the
principal balance of said promissory note.
(c) Any excess funds in the real estate tax and insurance escrow fund shall
be credited by the Mortgagee to subsequent real estate taxes and/or insurance
payments to be made by the Mortgagor, or against the outstanding principal and
accrued interest due on the promissory note guaranteed and secured hereby at the
time of any satisfaction thereof, and if none, then the balance of said escrow
shall be refunded to the Mortgagor.
SECTION 1.08. The Mortgagor will pay any and all taxes, charges, fees
and/or levies by reason of the Mortgagee's ownership of the Note or this
Mortgage and/or resulting from the exercise by the Mortgagee of any of its
rights and/or remedies provided for under this Mortgage, except for income
taxes. The obligations assumed by the Mortgagor pursuant to this Section shall
survive the exercise by the Mortgagee of any of its rights and/or remedies under
this Mortgage.
SECTION 1.09. (a) The Mortgagor shall keep the Improvements and Chattels
insured against damage by fire and other hazards covered by the standard
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extended coverage insurance policy, and each policy shall be endorsed to name
the Mortgagee as an insured thereunder, as its interest may appear, with loss
payable to the Mortgagee, without contribution or assessment, pursuant to a
standard mortgage endorsement substantially equivalent to the New York standard
mortgagee endorsement. All insurance policies and endorsements required pursuant
to this Section 1.09 shall be fully paid for, nonassessable and contain such
provisions and expiration dates and be in such form and amounts and issued by
such insurance companies satisfactory to the Mortgagee. Without limiting the
foregoing, each policy shall specifically provide that (i) such policy may not
be canceled except upon thirty (30) days' prior written notice to the Mortgagee
and that no act or thing done by the Mortgagor shall invalidate the policy as
against the Mortgagee and (ii) any and all insurance proceeds will be paid to
the Mortgagee so long as Mortgagee certifies to the insurer that the unpaid
Indebtedness exceeds the proceeds of insurance. In addition, the Mortgagee may
require the Mortgagor to carry such other insurance on the Improvements and
Chattels in such amounts as Mortgagee may, from time to time, reasonably deem
necessary to protect against insurable casualties (including risks of war and
nuclear explosion) which at the time are commonly insured against relating to
Premises similarly situated. The Mortgagor will assign and deliver the policy or
policies of all such insurance to the Mortgagee, which policy or policies shall
have endorsed thereon an endorsement substantially equivalent to the New York
standard mortgagee endorsement in the name of the Mortgagee, so and in such
manner and form that the Mortgagee and its successors and assigns shall at all
times have and hold said policy or policies as collateral and further security
for the payment of the Indebtedness until the full payment of the Indebtedness.
In addition, from time to time, upon occurrence of any change in the use,
operation or value of the Premises, or in the availability of insurance in the
area in which the Premises are located, the Mortgagor shall, within five (5)
days after demand by the Mortgagee, take out such additional amounts and/or such
other kinds of insurance as the Mortgagee may reasonably require.
(b) The Mortgagor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section, unless the Mortgagee is included thereon as a named insured with
loss payable to the Mortgagee under the standard mortgage endorsement of the
character above described. The Mortgagor shall immediately notify the Mortgagee
whenever any such separate insurance is taken out and shall promptly deliver to
the Mortgagee the policy or policies of such insurance.
(c) If the Premises, or any part thereof, are located in an area which has
been identified by the Secretary of Housing and Urban Development as a flood
hazard area, the Mortgagor will keep, for as long as any Indebtedness remains
unpaid, the Improvements covered by flood insurance in an amount at least equal
to the full amount of the Note or the maximum limit of coverage available for
the Premises under the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as the same may have been or may hereafter be
amended or modified (and any successor act thereto), whichever is less.
(d) The Mortgagor shall give the Mortgagee prompt notice of any loss
covered by insurance and the Mortgagee shall have the right to join the
Mortgagor in adjusting any loss in excess of $50,000. Notwithstanding anything
to the contrary contained herein or in Section 254 of the Real Property Law of
the State of New York or any other provision of applicable law, the proceeds of
insurance policies coming into the possession of the Mortgagee shall not be
deemed trust funds and the Mortgagee shall have the option in its sole
discretion to apply any insurance proceeds it may receive pursuant hereto, or
otherwise, to the payment of the Indebtedness or to allow all or a portion of
such proceeds to be used for the restoration of the Mortgaged Property. In the
event any such insurance proceeds shall be used to reduce the Indebtedness, the
9
same shall be applied by the Mortgagee, after the deduction therefrom and
repayment to the Mortgagee of any and all costs incurred by the Mortgagee in the
recovery thereof, in any manner it shall designate including but not limited to,
the application of such proceeds to the then unpaid installments of the
principal balance due under the Note in the inverse order of their maturity,
such that the regular payments, if any, under the Note shall not be reduced or
altered in any manner.
(e) The Mortgagor shall give the Mortgagee prompt written notice of damage
to or destruction of the Improvements and Chattels or any part thereof, The
insurance proceeds may, in Mortgagee's discretion, be made available to
Mortgagor following Mortgagee's assessment of the damage, and pursuant to a
mutually agreed upon payment schedule. In the event insurance proceeds are made
available to Mortgagor following damage to the Premises, Mortgagor shall
promptly commence and diligently continue to perform the repairs, restoration
and rebuilding of the portion of the Improvements and Chattels so damaged or
destroyed (hereinafter the "Work") so as to restore the Improvements and
Chattels in full compliance with all legal requirements and so that the
Mortgaged Property shall be at least equal in value and general utility as they
were prior to such damage or destruction, and if such damage or destruction, in
the reasonable judgment of the Mortgagee, shall exceed Fifty Thousand ($50,000)
Dollars (hereinafter, collectively "Major Work"), the Mortgagor shall, prior to
the commencement of the work, furnish to the Mortgagee for its approval: (1)
complete plans and specifications for the Work, with satisfactory evidence of
the approval thereof (i) by all governmental authorities whose approval is
required and (ii) by an architect satisfactory to the Mortgagee (hereinafter,
the "Architect") and which shall be accompanied by the Architect's signed
estimate, bearing the Architect's seal, of the entire cost of completing the
Work; (2) certified or photo static copies of all permits and approvals required
by law in connection with the commencement and conduct of the Work; and (3) a
surety bond or guaranty of the payment for and completion of the Work, which
bond or guaranty shall be in form satisfactory to Mortgagee and shall be signed
by surety or sureties, or guarantor or guarantors, as the case may be, who are
acceptable to the Mortgagee, and in an amount not less than the Architect's
estimate of the entire cost of completing the Work, less the amount of insurance
proceeds and Mortgagor deposits, if any, then held by the Mortgagee for
application toward the cost of the Work. The Mortgagor shall not commence any of
the Work until the Mortgagor shall have complied with applicable requirements
referred to in this subsection (e), and after commencing the Work the Mortgagor
shall perform the Work diligently and in good faith in accordance with the plans
and specifications referred to in this subsection (e), if applicable.
(f) Subject to the provisions of Section 1.09(e) above, if the insurance
proceeds, less the cost, if any, to the Mortgagee of such recovery and of paying
out such proceeds (including reasonable attorneys' fees and expenses allocable
to inspecting the Work and the plans and specifications therefor) are made
available to Mortgagor, then such net proceeds shall be paid towards restoration
of the Improvements and Chattels or if such insurance proceeds are applied
toward such restoration, then such insurance proceeds shall be applied by the
Mortgagee as follows:
(i) To the payment of the cost of the Work and shall be paid out from time
to time to the Mortgagor and/or, at the Mortgagee's option exercised from time
to time, directly to the contractor, subcontractors, material men, laborers,
engineers, architects and other persons rendering services or materials for the
Work, as said Work progresses except as otherwise hereinafter provided, but
subject to the following conditions, any of which the Mortgagee may freely
waive:
(A) If the Work to be done is Major Work, as determined by the Mortgagee,
the Architect shall be in charge of the Work;
10
(B) Each request for payment shall be made on seven (7) days prior notice
to the Mortgagee and shall be accompanied by a certificate of the Architect if
one is required under subsection (f) above, otherwise by a certificate of an
officer of the Mortgagor, stating (i) that all of the Work completed has been
done in compliance with the approved plans and specifications, if any be
required under said subsection (f), and in accordance with all provisions of
law; (ii) the sum requested is justly required to reimburse the Mortgagor for
payments by the Mortgagor to, or is justly due to, the contractor,
subcontractor, materialmen, laborers, engineers, architects or other persons
rendering services or materials for the Work (giving a brief description of such
services and materials), and that when added to all sums, if any, previously
paid out by the Mortgagee does not exceed the value of the Work done to date of
such certificate, and (iii) that the amount of such proceeds and other deposits
remaining in the hands of the Mortgagee will be sufficient on completion of the
Work to pay for the same in full (giving in such reasonable detail as the
Mortgagee may require an estimate of the cost of such completion);
(C) Each request shall be accompanied by waivers of liens satisfactory to
the Mortgagee covering that part of the Work previously paid for, if any, and by
a search prepared by the title company which insured the lien of the Mortgage or
by other evidence satisfactory to the Mortgagee, that there has not been filed
with respect to the Mortgaged Property or any part thereof any mechanic's lien
or other lien or instrument for the retention of title in respect of any part of
the Work not discharged of record and that there exist no encumbrances on or
affecting the Mortgaged Property or any part thereof other than encumbrances, if
any, existing as of the date hereof and which have been approved by the
Mortgagee;
(D) The request for any payment after the Work has been completed shall be
accompanied by a copy of all certificates, permits, licenses, waivers and/or
other documents required by law to render occupancy of the Premises and/or
Improvements legal; and
(ii) Upon completion of the Work and payment in full therefor, or upon
failure on the part of the Mortgagor to commence, as provided in subsection (f)
of this Section, or diligently to continue the Work, or at any time upon request
by the Mortgagor, the Mortgagee may apply the amount of any such proceeds then
or thereafter in the hands of the Mortgagee to the payment of the Indebtedness,
provided, however, that nothing herein contained shall prevent the Mortgagee
from applying at any time the whole or any part of such proceeds to the curing
of any default under this Mortgage or the Note.
SECTION 1.10. If the Mortgagor shall fail to perform any of the covenants
contained in Section 1.01, 1.03, 1.05, 1.07, 1.08, 1.09, 1.12, 1.19 or 1.22, the
Mortgagee may, upon ten (10) days prior written notice to Mortgagor and
Mortgagor's failure to perform within that time period, make advances to perform
the same in its behalf, and all sums so advanced shall be a lien upon the
Mortgaged Property and shall be secured hereby. The Mortgagor will repay on
demand all sums so advanced on its behalf with interest at the Involuntary Rate.
The provisions of this Section shall not prevent any default in the observance
of any covenant contained in said Section 1.01, 1.03, 1.05, 1.07, 1.08, 1.09,
1.12, 1.19 or 1.22 from constituting an Event of Default.
SECTION 1.11. (a) The Mortgagor will keep adequate records and books of
account in accordance with generally accepted accounting principles and will
permit the Mortgagee, by its agents, accountants and attorneys, to visit and
inspect the Premises and examine its records and books of account and to discuss
its affairs, finances and accounts with the officers of the Mortgagor, at such
reasonable times as may be requested by the Mortgagee.
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(b) The Mortgagor shall provide the Mortgagee during the term of the Note,
with the following: (i) SEC 10-K reports including audited consolidated fiscal
financial statements of the Mortgagor prepared by a firm or certified public
accountants acceptable to the Mortgagee with an unqualified opinion, within one
hundred five (105) days of its fiscal year end; and (ii) SEC 10-Q quarterly
financial statements of the Mortgagor within sixty (60) days of each quarter
end; and (iii) compliance and covenant calculations for the Mortgagor on a
quarterly basis to be submitted with each of the afore-mentioned financial
statements. All financial statements of the Mortgagor shall be prepared in
accordance with generally accepted accounting principles, shall be delivered in
duplicate. Such statements shall be accompanied by a certificate of the chief
financial or accounting officer of the Mortgagor stating that s/he knows of no
Event of Default which has occurred and is continuing, or, if any such Event of
Default has occurred and is continuing, specifying the nature and period of
existence thereof and what action the Mortgagor has taken or proposes to take
with respect thereto, and, except as otherwise specified, stating that the
Mortgagor has fulfilled all its obligations under this Mortgage which are
required to be fulfilled on or prior to the date of such certificate.
(c) The Mortgagor, within ten (10) days upon request by mail, will furnish
a written statement duly acknowledged of the amount due whether for principal or
interest on the Note and whether any offsets, counterclaims or defenses exist
against the Mortgagee, or the Indebtedness, or any part thereof.
SECTION 1.12. The Mortgagor will not commit any waste on the Mortgaged
Property, or any part thereof, or make any change in the use of the Mortgaged
Property, or any part thereof, which will in any way increase any ordinary fire
or other hazard arising out of construction or operation. The Mortgagor will, at
all times, maintain the Improvements in good operating order and condition and
will promptly make, from time to time, all repairs, renewals, replacements,
additions and improvements in connection therewith which are needful or
desirable to such end. The Improvements shall not be demolished or substantially
altered, nor shall any Chattels be removed without the prior written consent of
the Mortgagee except where appropriate replacements free of superior title,
liens and claims are immediately made having value at least equal to the value
of the removed Chattels.
SECTION 1.13. The Mortgagor, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Premises or any part
thereof, will notify the Mortgagee of the pendency of such proceedings. The
Mortgagee may participate in any such proceedings and the Mortgagor from time to
time will deliver to the Mortgagee all instruments requested by it to permit
such participation. In the event of such condemnation proceedings, the award or
compensation payable is hereby assigned to and shall be paid to the Mortgagee.
The Mortgagee shall be under no obligation to question the amount of any such
award or compensation and may accept the same in the amount in which the same
shall be paid. In any such condemnation proceedings, the Mortgagee may be
represented by counsel selected by the Mortgagee. The proceeds of any award or
compensation so received shall be applied toward the restoration of the
Mortgaged Property pursuant to the same terms, provisions and conditions which
are applicable to the use of insurance proceeds as set forth in Sections 1.09
(d), (e) and (f) herein provided that the Mortgagor has met the conditions
contained in Sections 1.09 (d), (e) and (f) or, if the Mortgagor has not met the
conditions contained in Sections 1.09 (d), (e) and (f), to the payment of the
Indebtedness, notwithstanding the fact that the Indebtedness may not then be due
and payable, or to the restoration of the Improvements. In the event that any
portion of the condemnation awards or compensation or interest thereon, if any,
shall be used to reduce the Indebtedness, same shall be applied by the Mortgagee
in any manner it shall designate, including, but not limited to, the application
12
of such award or compensation to the then unpaid installments of the principal
balance due under the Note in the inverse order of their maturity such that the
regular payments under the Note shall not be reduced or altered in any manner.
The Mortgagor, upon request by the Mortgagee, shall make, execute and deliver
any and all instruments requested for the purpose of confirming the assignment
of the aforesaid awards and compensation to the Mortgagee free and clear of any
liens, charges or encumbrances of any kind or nature whatsoever. The Mortgagee
shall not be limited to the interest paid on the proceeds of any award or
compensation, but shall be entitled to the payment by the Mortgagor of interest
at the applicable rate provided for in the Note.
SECTION 1.14. (a) The Mortgagor will not (i) execute an assignment of the
rents, or any part thereof, from the Premises unless such assignment shall
provide that it is subordinate to the assignment contained in this Mortgage and
any assignment executed pursuant hereto, or (ii) except where the lessee is in
default thereunder, terminate or consent to the cancellation or surrender of any
lease of the Premises, or any part thereof, now existing or hereafter to be
made, having an unexpired term of two (2) years or more, except that any lease
may be canceled provided that promptly after the cancellation or surrender
thereof a new lease is entered into with a new lessee having a credit standing,
in the reasonable judgment of the Mortgagee, at least equivalent to that of the
lessee whose lease was canceled, on substantially the same or better terms as
the terminated or canceled lease, or (iii) modify any such lease so as to
shorten the unexpired term thereof or so as to decrease the amount of the rents
payable thereunder, or (iv) accept prepayments of any installments of rents to
become due under such leases, except prepayments in the nature of security for
the performance of the lessees thereunder, or (v) in any other manner materially
impair the value of the Mortgaged Property or the security of this Mortgage in
the reasonable judgment of the Mortgagee.
(b) The Mortgagor will not execute any lease of all or a substantial
portion of the Premises except for actual occupancy by the lessee thereunder,
and will at all times promptly and faithfully perform, or cause to be performed
promptly, all of the covenants, conditions and agreements contained in all
leases of the Premises, or any part thereof1 now or hereafter existing, on the
part of the lessor thereunder to be kept and performed and will at all times do
all things necessary to compel performance by the lessee under each lease of all
obligations, covenants and agreements by such lessee to be performed thereunder,
If any of such leases provide for the giving by the lessee of certificates with
respect to the status of such leases, the Mortgagor shall exercise its right to
request such certificates within five (5) days of any demand therefor by the
Mortgagee.
(c) The Mortgagor shall furnish to the Mortgagee, within thirty (30) days
after a request by the Mortgagee to do so, a written statement containing the
names of all lessees of the Premises, the terms of their respective leases, the
space occupied and the rentals payable thereunder not more than once per year.
SECTION 1.15. To the extent not so provided by applicable law each lease of
the Premises, or of any part thereof, shall provide that, in the event of the
enforcement by the Mortgagee of the remedies provided for by law or by this
Mortgage, the lessee thereunder will, upon request of any person succeeding to
the interest of the Mortgagor as a result of such enforcement, automatically
become the lessee of said successor in interest, without change in the terms or
other provisions of such lease, provided, however, that said successor in
interest shall not be bound by (i) any payment of rent or additional rent for
more than one month in advance, except prepayments in the nature of security for
the performance by said lessee of its obligations under said lease, or (ii) any
amendment or modification of the lease made without the consent of the Mortgagee
or such successor in interest. If the Premises, or any part thereof, are located
within the State of New York, then reference is hereby made to Section 291-f of
13
the Real Property Law of the State of New York, for purposes of obtaining for
the Mortgagee the benefit of Section 291-f in connection with this Mortgage.
Each such lease shall provide that upon request by such successor in interest,
such lessee shall execute and deliver an instrument or instruments confirming
such attornment.
SECTION 1.16. (a) The Mortgagor represents and warrants that, to the best
of Mortgagor's knowledge, the Mortgaged property is not now and has not ever
been used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce, process or in any manner deal with, Hazardous
Materials (as hereinafter defined), and that no Hazardous Materials have ever
been installed, placed, or in any manner dealt with on the Mortgaged property,
and that no owner of the Mortgaged property or any tenant, subtenant, occupant,
prior tenant, prior subtenant or prior occupant has received any notice or
advice from any governmental agency or any tenant, subtenant or occupant with
regard to Hazardous Materials on, from or affecting the Mortgaged property. The
Mortgagor shall covenant that the Mortgaged Property shall be kept free of
Hazardous Materials, and shall not be used to generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer, produce, process or in any
manner deal with, Hazardous Materials, and the Mortgagor shall not cause or
permit, as a result of any intentional or unintentional act or omission on the
part of the Mortgagor or any tenant or subtenant or occupant, the installation
of Hazardous Materials in the Mortgaged Property or onto any other property or
suffer the presence of Hazardous Materials on the Mortgaged Property. The
Mortgagor agrees to comply with and ensure compliance by all tenants, subtenants
and occupants with all applicable federal, state and local laws, ordinances,
rules and regulations, with respect to Hazardous Materials, and agrees to keep
the Mortgaged Property free and clear of any liens imposed pursuant to such
laws, ordinances, rules and regulations. In the event that the Mortgagor
received or receive any notice or advice from any governmental agency, any
tenant, subtenant or occupant with regard to Hazardous Materials on, from or
affecting the Mortgaged property, the Mortgagor shall agree to immediately
notify the Mortgagee in writing. The Mortgagor shall conduct and complete all
investigations, studies, sampling, and testing, and all remedial, removal, and
other actions necessary to clean up and remove all Hazardous Materials, on, from
or affecting the Mortgaged Property in accordance with all applicable federal,
state, and local laws, ordinances, rules, regulations, and policies and to the
satisfaction of the Mortgagee. For these purposes, "Hazardous Materials" or
"Hazardous Material" shall include, without limitation, any flammable
explosives, radioactive materials, hazardous wastes, hazardous or toxic
substances, or related or similar materials, asbestos or any material containing
asbestos, or any other substance or material as defined by any federal, state or
local environmental law, ordinance, rule, or regulation including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et
seq.), and in the regulations adopted and publications promulgated pursuant
thereto. These obligations and liabilities of the Mortgagor shall survive any
foreclosure involving the Mortgaged property or the delivery of a deed in lieu
of foreclosure.
(b) The Mortgagor shall protect, indemnify and save harmless the Mortgagee
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including without limitation reasonable
attorney's fees and expenses), imposed upon or incurred by or asserted against
the Mortgagee by reason of (A) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, or threatened release of any Hazardous
Materials on, from or affecting the Mortgaged property or any other property;
(B) any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials; (C) any lawsuit
brought or threatened, settlement reached, or government order relating to such
Hazardous Materials; or (D) any violation of laws, orders, regulations,
14
requirements, or demands of government authorities, or any policies or
requirements of the Mortgagee which are based upon or in any related to such
Hazardous Materials including, without limitation, attorney or consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.
(c) To enforce Mortgagor's obligations under this section, the Mortgagee
may conduct or cause to be conducted future environmental audits and tests of
the Mortgaged property from time to time as it deems necessary in its reasonable
discretion. The Mortgagor shall pay the cost of such audits or tests. Should the
Mortgagee in its reasonable discretion believe there to be a use of, or a
condition existing on, the Mortgaged Property which would violate applicable
federal, state or local laws, or which would constitute a dangerous, unhealthy
or noxious use thereof or condition thereon, or which would give rise to
potential liability for Hazardous Materials, the Mortgagee may, but shall not be
obligated to, perform or cause to be performed any remedial action, including
but not limited to removal and clean-up, which the Mortgagee in its reasonable
discretion believes necessary under the circumstances. The Mortgagor shall
reimburse the Mortgagee for any such reasonable expenses incurred, regardless of
whether the Mortgagor would have ultimately been responsible for such costs
under applicable law.
SECTION 1.17. (a) Subject to the conditions specified in the next paragraph
of this Section, the Mortgagee will, upon request of the Mortgagor, execute
subordination, non-disturbance and attornment agreements with lessees of the
Premises, which agreements shall provide that, in the event the Mortgagee or any
purchaser at foreclosure shall succeed to the Mortgagor's interest in the
Premises, the leases of such lessees will remain in full force and effect and be
binding upon the Mortgagee or such purchaser and such lessee as though each was
the original party thereto.
(b) The Mortgagee's obligation to execute such agreements shall be subject
to the following conditions: (i) the credit of the lessee and the terms of the
lease shall be satisfactory to Mortgagee, (ii) the Mortgagee shall have been
provided with a standard form of lease to be used in connection with the leasing
of the Premises and shall have approved the same, (iii) upon each request for
such an agreement the Mortgagee shall receive a counterpart of the executed
lease in which all changes from the standard form shall be indicated by
appropriate markings, such markings to be certified to be true and complete by
the responsible officer of the Mortgagor or by its counsel, (iv) the Mortgagee
shall receive a letter, signed by the Mortgagor and addressed to the lessee, to
be forwarded to the lessee by the Mortgagee, giving notice of the assignment of
each lease provided for herein, and (v) there has not occurred any Event of
Default under this Mortgage or any event which with notice, the passage of time
or both would become an Event of Default under this Mortgage.
(c) Notwithstanding anything to the contrary, as of right, the Mortgagee
agrees by the acceptance hereof to grant Non-Disturbance Agreements for all
existing or future tenants of the Mortgaged Property if such tenants shall
request such Agreement, and said tenants are rated AAA-1 by Dun & Bradstreet (or
successor) and their leases are as a result of an arms-length negotiation.
SECTION 1.18. In the event any payment provided for herein or in the Note
shall become overdue for a period in excess of ten (10) days, a late charge of
four cents ($0.04) for each dollar so overdue shall become immediately due to
the Mortgagee for the purpose of defraying the expenses incident to handling
such delinquent payment, and such charge shall be deemed to be part of the
Indebtedness and therefore secured by the lien of this Mortgage. Late charges
shall be payable with the next installment of principal and/or interest due
under the Note.
15
SECTION 1.19. The Mortgagor, in compliance with Section 13 of the Lien Law
of the State of New York, will receive the advances secured by this Mortgage and
will hold the right to receive such advances as a trust fund to be applied first
for the purpose of paying the cost of improvement and will apply the same first
to the payment of the cost of improvement before using any part of the total of
the same for any other purpose.
SECTION 1.20. The Mortgagor agrees that it shall indemnify and hold the
Mortgagee harmless against any loss or liability, cost or expense, including
without limitation, any judgments, reasonable attorneys' fees, the cost of
appeal bonds and printing, arising out of or relating to any proceedings
instituted by any claimant alleging priority over the lien of this Mortgage
and/or if the Premises or any part thereof is within the State of New York by
any claimant alleging a violation by the Mortgagor or the Mortgagee of any
section of Article 3-A of the Lien Law of the State of New York.
SECTION 1.21. The Mortgagor shall (i) execute and deliver to the
appropriate governmental authority any affidavit, instrument, document and/or
filing required pursuant to any applicable statute, ordinance, rule and/or
regulation.
SECTION 1.22. The Mortgagor expressly covenants and agrees to pay in full
the reasonable fees and expenses of the Mortgagee's outside legal counsel,
promptly upon the receipt of a statement therefor, which are incurred prior to
and after the date hereof and which fees and expenses arise in connection with
any matter incidental to the enforcement of the loan which is evidenced by the
Note and secured by this Mortgage resulting from the Mortgagor's breach.
SECTION 1.23. The Mortgagor expressly covenants and represents that at all
times during the term of the Note, it shall comply with the following financial
covenants, to wit:
(a) Mortgagor shall maintain a Maximum Leverage of 1.20:1. For purposes
hereof, the term "Maximum Leverage" shall mean the ratio of total liabilities of
the Mortgagor divided by its tangible net worth at all times; and
(b) Mortgagor shall maintain a minimum Debt Service Coverage Ratio of
1.25:1. For purposes hereof, the term "Debt Service Coverage" shall mean
earnings of the Mortgagor before interest, taxes, depreciation and amortization
for the previous twelve month period, divided by the interest expense for the
prior twelve (12) month period and aggregate principal payments of loans and
capitalized leases scheduled to be paid over the ensuing twelve (12) month
period, exclusive of any balloon or maturity balance of (i) any loans made by
the Mortgagee to the Mortgagor including, without limitation, the loan evidenced
by the Note; and (ii) the GE Capital mortgage loan made to the Mortgagor, and
exclusive of the principal balance due at the maturity of the Note.
(End of Article I)
ARTICLE II
Events of Default and Remedies
SECTION 2.01. If one or more of the following Events of Default shall
happen, that is to say:
(a) if (i) default shall be made in the payment of any interest due under
16
the Note, or in the payment of any installment of principal due under the Note,
in either such case, when and as the same shall become due and payable, and such
default shall have continued for a period of ten (10) days; or (ii) default
shall be made in any other payment of the principal of the Note, when and as the
same shall become due and payable, whether at maturity or by acceleration or as
part of any prepayment or otherwise, in each case, as in the Note and this
Mortgage provided or default in the payment of any other Indebtedness due to
Mortgagee under this Mortgage and such default shall have continued for a period
of ten (10) days; or (iii) default shall be made in the payment of any tax
required by Section 1.07 to be paid and said default shall have continued for a
period of twenty (20) days; or
(b) if default shall be made in the due observance or performance of any
covenant, term or agreement on the part of the Mortgagor contained in Section
1.01, 1.03, or 1.08, and such default shall have continued for a period of
twenty (20) days after notice specifying such default shall have been given to
the Mortgagor by the Mortgagee, (i) unless such term, covenant or agreement
cannot be complied with or such default be cured in such period and (ii) the
Mortgagor has commenced compliance with such term, covenant or agreement or
curing such default and continues to diligently prosecute such compliance or
curing such default; or
(c) if any material representation made in Section 1.01 shall have been
false when made; or
(d) if default shall be made in the due observance or performance of any
other covenant, term or agreement on the part of the Mortgagor in the Note, or
in this Mortgage contained, and such default shall have continued for a period
of twenty (20) days after notice specifying such default shall have been given
to the Mortgagor by the Mortgagee, unless (i) such term, covenant or agreement
cannot be complied with or such default be cured in such period and (ii) the
Mortgagor has commenced compliance with such term, covenant or agreement or
curing such default and continues to diligently prosecute such compliance or
curing such default; or
(e) if by the order of a court of competent jurisdiction, a trustee,
receiver or liquidator of the Mortgaged Property, or any part thereof, or of the
Mortgagor shall be appointed and such order shall not be discharged or dismissed
within sixty (60) days after such appointment; or
(f) if the Mortgagor shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case under any
such law or to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Mortgagor or of any substantial part of its property, or if the
Mortgagor shall make any general assignment for the benefit of creditors, or if
the Mortgagor shall fail generally to pay its debts as such debts become due, or
if the Mortgagor shall take any action in furtherance of any of the foregoing;
or
(g) if any of the creditors of the Mortgagor shall commence against the
Mortgagor an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect and if such case shall not be
discharged or dismissed within sixty (60) days after the date on which such case
was commenced; or
(h) if final judgment for the payment of money in excess of the sum of
$25,000 in the aggregate shall be rendered against the Mortgagor and the
Mortgagor shall not discharge the same or cause it to be discharged or bonded
17
within sixty (60) days from the entry thereof, or shall not appeal therefrom or
from the order, decree or process upon which or pursuant to which said judgment
was granted, based or entered, and secure a stay of execution pending such
appeal; or
(i) destruction of all or a material portion of the premises, said
determination to be made in the sole discretion of the Mortgagee; or
(j) intentionally omitted; or
(k) intentionally omitted; or
(l) if the Mortgagor sells, transfers, assigns, conveys or encumbers the
Premises or any part thereof or any interest therein without the prior written
consent of the Mortgagee; or
(m) if any default occurs after applicable grace periods, if any, under any
mortgage that is subordinate to the lien of this Mortgage or the mortgagee under
any subordinate mortgage commences a foreclosure action in connection with said
mortgage, it being further agreed by the Mortgagor that an Event of Default
hereunder shall constitute an Event of Default under any such other mortgage or
deed of trust held by the Mortgagee; or
(n) if the Mortgagor defaults under any other agreement with the Mortgagee;
or
(o) if Mortgagor pays out any cash dividends on its common stock during the
term of the Note; and
(p) intentionally omitted; or
(q) if any representation or warranty of Mortgagor in any certificate,
report, financial statement or other instrument furnished in connection with the
making of the Note, this Mortgage, or any related loan document, shall prove
false or misleading in any material respect or shall have omitted any
substantial contingent or unliquidated liability or claim;
(r) if it shall be illegal for the Mortgagor to pay any tax referred to in
Section 1.08 hereof or if the payment of such tax by the Mortgagor would result
in the violation of the usury laws of the State of New York; or
(s) if any person or entity having or claiming an interest in the Mortgagor
or the Mortgaged Property commences an action or proceeding against the
Mortgagor, the Mortgaged Property or any person or entity having or claiming an
interest in the Mortgagor or the Mortgaged Property; or
(t) if any proceedings are commenced for the condemnation of any part of
the Mortgaged Premises, which condemnation would have, in the opinion of the
Mortgagee, a material adverse effect on the value of the remaining security
hereunder; or
(u) the actual or threatened alteration, demolition or removal of the
Improvements erected or to be erected upon the Premises or the Mortgaged
Property; or
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(v) if any easement over, across or under or otherwise affecting the
Mortgaged Property or any portion thereof shall be granted without the
Mortgagee's prior written consent; or
(w) if there occurs any other event, which if unremedied, would require a
material and adverse change in the survey delivered to Mortgagee at time of
closing; or
(x) failure of the Mortgagor, during the term of the Note, to maintain a
Maximum Leverage of 1.20:1. For purposes hereof, the term "Maximum Leverage"
shall mean the ratio of total liabilities of the Mortgagor divided by its
tangible net worth at all times; or
(y) failure of the Mortgagor, during the term of the Note, to maintain a
minimum Debt Service Coverage Ratio of 1.25:1. For purposes hereof, the term
"Debt Service Coverage" shall mean earnings of the Mortgagor before interest,
taxes, depreciation and amortization for the previous twelve month period,
divided by the interest expense for the prior twelve (12) month period and
aggregate principal payments of loans and capitalized leases scheduled to be
paid over the ensuing twelve (12) month period, exclusive of any balloon or
maturity balance of (i) any loans made by the Mortgagee to the Mortgagor
including, without limitation, the loan evidenced by the Note and secured
hereby; and (ii) the GE Capital mortgage loan made to the Mortgagor, and
exclusive of the principal balance due at the maturity of the Note;
(z) Mortgagor shall fail to pay its debts, liabilities and obligations to
the Mortgagee as and when due and payable, or Mortgagor fails to perform or
observe any term, covenant, or condition on its part to be performed or observed
under any agreement or instrument relating to any such debts, liabilities and
obligations when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
after the giving of notice or passage of time, or both, of the maturity of such
debts, liabilities and obligations, whether or not such failure to perform or
observe shall be waived by the holder of such debts, liabilities and
obligations, or any such debts, liabilities and obligations shall be declared to
be due and payable, or be required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity of such debts,
liabilities and obligations;
(aa) If Mortgagor shall be in default under the Note, or under any other
mortgage, instrument or document evidencing, securing or guaranteeing payment of
the Mortgage Amount, in whole or in part, or otherwise executed and delivered in
connection with the Note, this Mortgage or the loan evidenced and secured
thereby or hereby;
(bb) if the Mortgagor, or any affiliate of the Mortgagor, shall default in
the payment of any indebtedness, including, without limitation, any and all
other indebtedness now or hereafter owed to the Mortgagee or a default in the
performance of any term, covenant, condition or agreement of any such
indebtedness, if the effect of such default is to permit the holder of such
indebtedness to accelerate the maturity thereof; and
(cc) if the Mortgaged Property shall become subject (i) to any tax lien,
other than a lien for local real estate taxes and assessments not due and
payable, or (ii) to any lis pendens, notice of pendency, stop order, notice of
intention to file mechanic's or materialman's lien, mechanic's or materialman's
lien or other lien of any nature whatsoever and the same shall not either be
discharged of record or in the alternative insured over to the satisfaction of
Mortgagee by the title company insuring the lien of this Mortgage within a
period of thirty (30) days after the same is filed or recorded, and irrespective
of whether the same is superior or subordinate in lien or other priority to the
lien of this Mortgage and irrespective of whether the same constitutes a
perfected or inchoate lien or encumbrance on the Mortgaged Property or is only a
matter of record or notice;
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(dd) if Mortgagor shall fail to maintain its business in good standing
under the applicable regulations of the agencies or governmental authorities
having jurisdiction thereof, or its failure to receive and maintain whatever
licenses are required, or shall be required, for the ownership, maintenance and
operation of the Mortgaged Property;
then and in every such case:
I. During the continuance of any such Event of Default, the Mortgagee, by
written notice given to the Mortgagor, may declare the entire principal of the
Note then outstanding (if not then due and payable), and all accrued and unpaid
interest thereon, together with all other Indebtedness, to be due and payable
immediately, and upon any such declaration the principal of the Note, said
accrued and unpaid interest thereon, and all other Indebtedness shall become and
be immediately due and payable, anything in the Note, or in this Mortgage to the
contrary notwithstanding;
II. During the continuance of any such Event of Default, the Mortgagee
personally, or by its agents or attorneys, may enter into and upon all or any
part of the Premises, and each and every part thereof, and may exclude the
Mortgagor, its agents and servants wholly therefrom; and having and holding the
same, may use, operate, manage and control the Premises and conduct the business
thereof, either personally or by their superintendents, managers, agents,
servants, attorneys or receivers; and upon every such entry, the Mortgagee, at
the expense of the Mortgaged Property, from time to time, either by purchase,
repairs or construction, may maintain and restore the Mortgaged Property,
whereof it shall become possessed as aforesaid, may complete the construction of
any of the Improvements and in the course of such completion may make such
changes in the contemplated Improvements as it may deem desirable and may insure
the same; and likewise, from time to time, at the expense of the Mortgaged
Property, the Mortgagee may make all necessary or proper repairs, renewals and
replacements and such useful alterations, additions, betterments and
improvements thereto and thereon as to it may seem advisable; and in every such
case the Mortgagee shall have the right to manage and operate the Mortgaged
Property and to carry on the business thereof and exercise all rights and powers
of the Mortgagor with respect thereto either in the name of the Mortgagor or
otherwise as it shall deem best; and the Mortgagee shall be entitled to collect
and receive all earnings, revenues, rents, issues profits and income of the
Mortgaged Property and every part thereof, all of which shall for all purposes
constitute property of the Mortgagor; and in furtherance of such right the
Mortgagee may collect the rents payable under all leases of the Premises
directly from the lessees thereunder upon notice to each such lessee that an
Event of Default exists hereunder accompanied by a demand on such lessee for the
payment to the Mortgagee of all rents due and to become due under its lease, and
the Mortgagor FOR THE BENEFIT OF MORTGAGEE AND EACH SUCH LESSEE hereby covenants
and agrees that the lessee shall be under no duty to question the accuracy of
the Mortgagee's statement of default and shall unequivocally be authorized to
pay said rents to the Mortgagee without regard to the truth of the Mortgagee's
statement of default and notwithstanding notices from the Mortgagor disputing
the existence of an Event of Default such that the payment of rent by the lessee
to the Mortgagee pursuant to such a demand shall constitute performance in full
of the lessee's obligation under the lease for the payment of rents by the
lessee to the Mortgagor; and after deducting the expenses of conducting the
business thereof and of all maintenance, repairs, renewals, replacements,
alterations, additions, betterments and improvements and amounts necessary to
pay for taxes, assessments, insurance and prior or other proper charges upon the
Mortgaged Property, or any part thereof, as well as just and reasonable
compensation for the services of the Mortgagee and for all attorneys, counsel,
agents, clerks, servants and other employees by it properly engaged and
employed, the Mortgagee shall apply the moneys arising as aforesaid, first to
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the payment of the principal of the Note and the interest thereon, when and as
the same shall become payable, and second to the payment of any other
Indebtedness and sums required to be paid by the Mortgagor under this Mortgage.
III. The Mortgagee, with or without entry, personally or by its agents or
attorneys, insofar as applicable, may:
(1) sell the Mortgaged Property, or any part thereof, to the extent
permitted and pursuant to the procedures provided by law, and all estate, right,
title and interest, claim and demand therein, and right of redemption thereof,
at one or more sales as an entity or in parcels, and at such time and place upon
such terms and after such notice thereof as may be required or permitted by law;
or
(2) institute proceedings for the complete or partial foreclosure of this
Mortgage; or
(3) take such steps to protect and enforce its rights whether by action,
suit or proceeding in equity or at law for the specific performance of any
covenant, condition or agreement in the Note, or in this Mortgage, or in aid of
the execution of any power herein granted, or for any foreclosure hereunder, or
for the enforcement of any other appropriate legal or equitable remedy or
otherwise as the Mortgagee shall elect; or
(4) the Mortgagee also shall have such other rights and/or remedies
provided to a mortgagee and/or a secured party by the Uniform Commercial Code as
that model statute is enacted and in effect in the jurisdiction wherein the
Premises are situated.
IV. The Mortgagor covenants to pay the indebtedness as hereinbefore
provided and as provided in the Note and notwithstanding anything to the
contrary contained herein, during the continuance of any such Event of Default,
the Mortgagee personally, or by its agents or attorneys, may enter into and upon
all or any part of the Premises, and each and every part thereof, and sell and
dispose of same, along with any benefit and equity of redemption of the said
Mortgagor, its heirs, executors, administrators, successors or assigns therein,
at public auction, according to the act in such case made and provided, as the
attorney of the Mortgagor for that purpose duly authorized, constituted and
appointed, to make and deliver to the purchaser or purchasers thereof a good and
sufficient deed or deeds of conveyance for the same in fee simple which such
sale so to be made shall forever be a perpetual bar both in law and equity
against the Mortgagor, its heirs, successors and assigns, and against all other
persons claiming or to claim the Premises, or any part thereof by, from or under
him, them or any of them.
SECTION 2.02. (a) The Mortgagee may adjourn from time to time any sale by
it to be made under or by virtue of this Mortgage by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, the Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(b) Upon the completion of any sale or sales made by the Mortgagee under or
by virtue of this Article II, the Mortgagee, or an officer of any court
empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient instruments,
conveying, assigning and transferring all estate, right, title and interest in
and to the property and rights sold and shall execute and deliver to the
appropriate governmental authority any affidavit, instrument, document and/or
filing required pursuant to any applicable statute, ordinance, rule and/or
regulation. As long as the loan secured by this Mortgage remains unpaid the
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Mortgagee is hereby irrevocably appointed the true and lawful attorney of the
Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Mortgaged Property and rights so
sold and for that purpose the Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, including, without limitation, any
affidavit, instrument, document or filing required pursuant to any applicable
statute, rule or regulation, and may substitute one or more persons with like
power, the Mortgagor hereby ratifying and confirming all that its said attorney
or such substitute or substitutes shall lawfully do by virtue hereof.
Nevertheless the Mortgagor, if so requested by the Mortgagee, shall ratify and
confirm any such sale or sales by executing and delivering to the Mortgagee or
to such purchaser or purchasers all such instruments as may be advisable, in the
reasonable judgment of the Mortgagee, for that purpose, and as may be designated
in such request. Any such sale or sales made under or by virtue of this Article
II, whether made under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
the Mortgagor in and to the properties and rights so sold, and shall he a
perpetual bar both at law and in equity against the Mortgagor and against any
and all persons claiming or who may claim the same, or any part thereof, from,
through or under the Mortgagor.
(c) In the event of any sale made under or by virtue of this Article II
(whether made under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale), the entire principal of, and interest on, the
Note, if not previously due and payable, and all other sums required to be paid
by the Mortgagor pursuant to this Mortgage, immediately thereupon, shall,
anything in the Note, or in this Mortgage to the contrary notwithstanding,
become due and payable.
(d) The purchase money proceeds or avails of any sale made under or by
virtue of this Article II, together with any other sums which then may be held
by the Mortgagee under this Mortgage, whether under the provisions of this
Article II or otherwise, shall be applied as follows:
First: To the payment of the costs and expenses of such sale, including,
but not limited to, the reasonable compensation to the Mortgagee, its agents and
counsel, and any sums that may be due under and/or pursuant to any statute,
rule, regulation and/or law which imposes any tax, charge, fee and/or levy in
connection with and/or arising from the exercise of any right and/or remedy
under this Mortgage or the requirement that any sum be paid in order to record
and/or file any deed, instrument of transfer or other such document in
connection with any such sale and of any judicial proceedings wherein the same
may be made, and of all expenses, liabilities and advances made or incurred by
the Mortgagee under this Mortgage, together with interest at the Involuntary
Rate on all advances made by the Mortgagee and all taxes or assessments, except
any taxes, assessments or other charges subject to which the Mortgaged Property
shall have been sold.
Second: To the payment of the whole amount then due, owing or unpaid upon
the Note for principal, interest, other indebtedness, and any other sums
required to be paid thereunder with interest on the unpaid principal at the
Involuntary Rate from and after the happening of any Event of Default described
in clause (a) of Section 2.01 from the due date of any such payment of principal
until the same is paid.
Third: To the payment of the whole amount then due, owing or unpaid upon
any other note held by the Mortgagee made by either the Mortgagor or any
guarantor hereof and secured by this Mortgage for principal and interest, with
interest on the unpaid principal at the Involuntary Rate from and after the
happening of any Event of Default described in clause (a) of Section 2.01 from
22
the due date of any such payment of principal until the same is paid.
Fourth: To the payment of any other Indebtedness and any other sums
required to be paid by the Mortgagor pursuant to any provision of this Mortgage,
or the Note.
Fifth: To the payment of the surplus, if any, to Mortgagor.
(e) Upon any sale made under or by virtue of this Article II, whether made
under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, the Mortgagee may bid for and acquire the Mortgaged
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the indebtedness of the
Mortgagor secured by this Mortgage the net sales price after deducting therefrom
the expenses of the sale and the costs of the action and any other sums which
the Mortgagee is authorized to deduct under this Mortgage.
SECTION 2.03. (a) In case an Event of Default described in clause (a) of
Section 2.01 shall have happened and be continuing, then, upon written demand of
the Mortgagee, the Mortgagor will pay to the Mortgagee the whole amount which
then shall have become due and payable on the Note, for principal or interest or
both, as the case may be, and after the happening of said Event of Default will
also pay to the Mortgagee interest at the Involuntary Rate on the then unpaid
principal of the Note, and the sums required to be paid by the Mortgagor
pursuant to any provision of this Mortgage, and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Mortgagee, its agents, and counsel and
any expenses incurred by the Mortgagee hereunder. In the event the Mortgagor
shall fail forthwith to pay such amounts upon such demand, the Mortgagee shall
be entitled and empowered to institute such action or proceedings at law or in
equity as may be advised by its counsel for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Mortgagor and collect, out of the property of the Mortgagor wherever situated,
as well as out of the Mortgaged Property, in any manner provided by law, moneys
adjudged or decreed to be payable.
(b) The Mortgagee shall be entitled to recover judgment as aforesaid either
before or after or during the pendency of any proceedings for the enforcement of
the provisions of this Mortgage; and the right of the Mortgagee to recover such
judgment shall not be affected by any entry or sale hereunder, or by the
exercise of any other right, power or remedy for the enforcement of the
provisions of this Mortgage, or the foreclosure of the lien hereof; and in the
event of a sale of the Mortgaged Property, or any part thereof, and of the
application of the proceeds of sale, as in this Mortgage provided, to the
payment of the debt hereby secured, the Mortgagee shall be entitled to enforce
payment of, and to receive all amounts then remaining due and unpaid upon the
Note, and to enforce payment of all other charges, payments and due under this
Mortgage, and shall be entitled to recover judgment for any portion of the debt
remaining unpaid, with interest at the Involuntary Rate. In case of the
commencement of any case against the Mortgagor under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect or any proceedings
for its reorganization or involving the liquidation of its assets, then the
Mortgagee shall be entitled to prove the whole amount of principal and interest
due upon the Note to the full amount thereof, and all other payments, charges
and costs due under this Mortgage, without deducting therefrom any proceeds
obtained from the sale of the whole or any part of the Mortgaged Property,
provided, however, that in no case shall the Mortgagee receive a greater amount
than such principal and interest and such other payments, charges and costs from
the aggregate amount of the proceeds of the sale of the Mortgaged Property and
the distribution from the estate of the Mortgagor.
23
(c) No recovery of any judgment by the Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of the Mortgagor shall affect in any manner or to any extent, the lien
of this Mortgage upon the Mortgaged Property, or any part thereof, of any liens,
rights, powers or remedies of the Mortgagee hereunder, but such liens, rights,
powers and remedies of the Mortgagee shall continue unimpaired as before.
(d) Any moneys thus collected by the Mortgagee under this Section 2.03
shall be applied by the Mortgagee in accordance with the provisions of
subsection (d) of Section 2.02.
SECTION 2.04. After the happening of any Event of Default and immediately
upon the commencement of any action, suit or other legal proceedings by the
Mortgagee to obtain judgment for the principal of, or interest on, the Note, and
all other Indebtedness and other sums required to be paid by the Mortgagor
pursuant to any provision of this Mortgage, or of any other nature in aid of the
enforcement of the Note or of this Mortgage, the Mortgagor will (a) consent to
the service of process as provided in Section 3.12 and enter its voluntary
appearance in such action, suit or proceeding, and (b) if required by the
Mortgagee, consent to the appointment of a receiver or receivers of the
Mortgaged Property, or any part thereof, and of all the earnings, revenues,
rents, issues, profits and income thereof. After the happening of any Event of
Default and during its continuance, or upon the commencement of any proceedings
to foreclose this Mortgage or to enforce the specific performance hereof or in
aid thereof or upon the commencement of any other judicial proceeding to enforce
any right of the Mortgagee, the Mortgagee shall be entitled, as a matter of
right, if it shall so elect, without the giving of notice to any other party and
without regard to the adequacy or inadequacy of any security for the
Indebtedness, forthwith either before or after declaring the unpaid principal of
the Note to be due and payable, to the appointment of such a receiver or
receivers.
SECTION 2.05. Notwithstanding the appointment of any receiver, liquidator
or trustee of the Mortgagor, or of any of their property, or of the Mortgaged
Property or any part thereof, the Mortgagee shall be entitled to retain
possession and control of all property now or hereafter held under this
Mortgage.
SECTION 2.06. No remedy herein conferred upon or reserved to the Mortgagee
is intended to be exclusive of any other remedy or remedies, and each and every
such remedy shall be cumulative, and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
No delay or omission of the Mortgagee to exercise any right or power accruing
upon any Event of Default shall impair any such right or power, or shall be
construed to be a waiver of any such Event of Default or any acquiescence
therein, and every power and remedy given by this Mortgage to the Mortgagee may
be exercised from time to time as often as may be deemed expedient by the
Mortgagee. Nothing in this Mortgage or in the Note shall affect the obligation
of the Mortgagor to pay the principal of, and interest on, the Note in the
manner and at the time and place therein respectively expressed.
SECTION 2.07. The Mortgagor will not at any time insist upon, or plead, or
in any manner whatever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance of
this Mortgage, nor claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; nor, after any such
sale or sales, claim or exercise any right under any statute heretofore or
24
hereafter enacted to redeem the property so sold or any part thereof and the
Mortgagor hereby expressly waives all benefit or advantage of any such law or
laws, and covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to the Mortgagee, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
The Mortgagor, for itself and all who may claim under it, waive, to the extent
that it lawfully may, all right to have the Mortgaged Property, or any part
thereof, marshaled upon any foreclosure hereof.
SECTION 2.08. During the continuance of any Event of Default, and pending
the exercise by the Mortgagee of its right to exclude the Mortgagor from all or
any part of the Premises, the Mortgagor agrees to pay the fair and reasonable
rental value for the use and occupancy of the Mortgaged Property, or any part
thereof that is in its possession for such period, and upon default of any such
payment, will vacate and surrender possession of the Mortgaged Property, or any
part thereof, to the Mortgagee or to a receiver, if any, and in default thereof
may be evicted by any summary action or proceeding for the recovery of
possession of the Premises for non-payment of rent, however designated.
SECTION 2.09. In the event of any Event of Default hereunder and resulting
foreclosure of the within Mortgage, any interest of the Mortgagor in any
insurance policy insuring all or any portion of the Premises shall pass to the
purchaser of the Premises at the time of foreclosure sale.
(End of Article II)
ARTICLE III
Miscellaneous
SECTION 3.01. In the event any one or more of the provisions contained in
this Mortgage or in the Note shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall, at the option of the Mortgagee, not affect any other provision of this
Mortgage, but this Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
SECTION 3.02. All notices hereunder shall be in writing and shall be deemed
to have been sufficiently given or served for all purposes three days after
being sent by registered or certified mail, return receipt requested, to any
party hereto at its address above stated (in the case of the Mortgagee, to the
attention of Real Estate Banking Department) or at such other address of which
any party shall have notified any other party giving such notice in writing as
aforesaid.
SECTION 3.03. All covenants hereof shall be construed as affording to the
Mortgagee rights additional to and not exclusive of the rights conferred under
the provisions of Sections 254 and 273 of the Real Property Law of the State of
New York, or any other applicable law.
SECTION 3.04. All of the grants, terms, conditions, provisions and
covenants of this Mortgage shall run with the land, shall be binding upon the
Mortgagor and shall inure to the benefit of the Mortgagee, subsequent holders of
this Mortgage and their respective successors and assigns. For the purpose of
this Mortgage, the term "Mortgagor" shall include and refer to the mortgagor
named herein, any subsequent owner of the Mortgaged Property, or any part
thereof, and their respective heirs, executors, legal representatives,
successors and assigns. If there is more than one Mortgagor, all their
25
undertakings hereunder shall be deemed joint and several.
SECTION 3.05. The enforcement of this Mortgage shall be governed, construed
and interpreted by the laws of the State where the Premises are located. Nothing
in this Mortgage, the Note or in any other agreement between the Mortgagor and
the Mortgagee shall require the Mortgagor to pay, or the Mortgagee to accept,
interest in an amount which would subject the Mortgagee to any penalty or
forfeiture under applicable law. In the event that the payment of any charges,
fees or other sums due hereunder or under the Note or any such other agreement,
which are or could be held to be in the nature of interest and which would
subject the Mortgagee to any penalty or forfeiture under applicable law, then,
ipso facto, the obligations of the Mortgagor to make such payment shall be
reduced to the highest rate authorized under applicable law. Should the
Mortgagee receive any payment which is or would be in excess of the highest rate
authorized under law, such payment shall have been, and shall be deemed to have
been, made in error, and shall automatically be applied to reduce the
outstanding balance of the Indebtedness.
SECTION 3.06. This Mortgage and all of the terms, covenants, provisions,
conditions and grants contained in this Mortgage cannot be altered, amended,
waived, modified or discharged orally, and no executory agreement shall be
effective to modify, waive or discharge, in whole or in part, anything contained
in this Mortgage unless it is in writing and signed by the party against whom
enforcement of the modification, alteration, amendment, waiver or discharge is
sought.
SECTION 3.07. The Mortgagor acknowledges that they have received a true
copy of this Mortgage.
SECTION 3.08. This Mortgage may be executed in any number of counterparts,
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same mortgage.
SECTION 3.09. All covenants hereof shall be construed as affording to the
Mortgagee rights additional to and not exclusive of the rights conferred under
the provisions of any applicable law.
SECTION 3.10. The information set forth on the cover hereof is hereby
incorporated herein.
SECTION 3.11. The Mortgagor expressly agree, intending that the Mortgagee
rely thereon, that this Mortgage also shall constitute a "security agreement,"
as such term is defined in the Uniform Commercial Code in the jurisdiction
wherein the Premises are situated (the "Code"). In accordance with Article 9 of
the Uniform Commercial Code and Revised Article 9 thereof, the Mortgagor hereby
authorizes the Mortgagee to file such financing statements or amendments thereof
as may be necessary in the form provided in Article 9 of the Uniform Commercial
Code and Revised Article 9 to perfect the security interests herein created in
the collateral hereinafter described. The Mortgaged Property includes, and shall
be deemed to include, inter alia, the Chattels and the Intangibles, regardless
of whether they are held or hereafter acquired, of the Mortgagor in, to and
under the Mortgaged Property. By executing and delivering this Mortgage, the
Mortgagor have granted, in the same manner and with the same effect described in
the Granting Clause hereof, to the Mortgagee, as additional security, a security
interest in the Chattels and the Intangibles which are subject to the Code. If
any Event of Default shall occur, the Mortgagee shall have, in addition to any
and all other rights and remedies set forth in this Mortgage, and may exercise
without demand, any and all rights and remedies granted to a secured party under
the Code, including, but not limited to, the right to take possession of the
Chattels and the Intangibles, or any part thereof, and the right to advertise
and sell the Chattels and the Intangibles, or any part thereof, pursuant to and
26
in accordance with the power of sale provided for in this Mortgage. The
Mortgagor agrees that any notice of sale or other action intended by the
Mortgagee with respect to the Chattels and the Intangibles, or any part thereof,
shall constitute reasonable notice if it is sent to the Mortgagor not less than
ten (10) days prior to any such sale or intended action. The proceeds of any
such sale of the Chattels and the Intangibles, or any part thereof, shall be
applied in the manner set forth in clauses First through Fourth of Section 2.02
(d) of this Mortgage.
In accordance with Article 9 of the Uniform Commercial Code and Revised
Article 9 thereof, the Mortgagor hereby authorize the Mortgagee to file such
financing statements or amendments thereof as may be necessary in the form
provided in Article 9 of the Uniform Commercial Code and Revised Article 9 to
perfect the security interests herein created in the collateral hereinafter
described.
SECTION 3.12. The Mortgagor agrees to submit to personal jurisdiction in
the State of New York in any action or proceeding arising out of the Mortgage.
In addition, Mortgagor waives any right to a trial by jury or to interpose a
counterclaim in any action brought by the Mortgagee to enforce its rights under
the Note or this Mortgage.
SECTION 3.13. This Mortgage does not cover real property principally
improved or to be improved by one or more structures containing in the aggregate
more than six (6) residential dwelling units, each having their own separate
cooking facilities.
SECTION 3.14. The loan secured hereby was approved and extended by the
Mortgagee, in part, in reliance upon the credit, financial capacity, and
property management expertise of the Mortgagor. Accordingly, in the event that
the Mortgagor shall either sell, convey or alienate the subject Premises or any
part thereof, or any interest therein, the loan secured hereby shall become
immediately due and payable.
SECTION 3.15. The Mortgagee reserves the right to participate out any
portion of the loan secured hereby. Accordingly, the Mortgagor hereby grant to
the Mortgagee the right to distribute without further notice to the Mortgagor,
and at the Mortgagee's sole discretion any information relative to this Mortgage
or any document executed in connection therewith, including without limitation,
costs estimates, income pro formas and financial statements, including, but not
limited to, those supplied to the Mortgagee by the Mortgagor.
SECTION 3.16. The Mortgagee may, in the event that the Mortgagee reasonably
determines that the value of the Premises has decreased, require the Mortgagor
to provide the Mortgagee with an appraisal or appraisals subsequent to the
closing of the Loan, but not more than one (1) time in any calendar year. In the
event that said appraisal or appraisals indicate that the value of Premises has
decreased so that the loan to value ratio at that time is unacceptable to the
Mortgagee, then the Mortgagor shall either (i) make payments to the Mortgagee
reducing the amount of the Loan to a point where the loan to value ratio is
acceptable to the Mortgagee; (ii) provide the Mortgagee with liens and/or
security interests in such additional collateral in all respects satisfactory to
the Mortgagee as will reduce the loan to value ratio to a percentage acceptable
to the Mortgagee; or (iii) repay the Loan in full. All costs of such future
appraisals shall be paid by the Mortgagor.
SECTION 3.17. INTENTIONALLY OMITTED
SECTION 3.18 Upon the occurrence of an Event of Default in the performance
27
of any of the Mortgagor's covenants or agreements herein, the Mortgagee may, at
its option, pay or perform the same and the amount or cost thereof, with
interest at the Involuntary Rate, shall immediately be due from the Mortgagor to
the Mortgagee. If the Mortgagor shall fail to perform any of its obligations
under this Mortgage, then the Mortgagee may make advances to perform the same on
its behalf and, to the extent that any such amounts or costs paid by the
Mortgagee shall constitute payment of (i) taxes, charges or assessments which
may be imposed by law upon the Premises; (ii) premiums on insurance policies
covering the Premises; (iii) expenses incurred in upholding the lien of the
Mortgage, including, but not limited to the expenses of any litigation to
prosecute or defend the rights and lien created by the Mortgage; (iv) any
amount, costs or charge to which the Mortgagee becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority; or (v) any amount pursuant to the provisions provided for herein that
shall become effective after the occurrence of an Event of Default then, and in
each such event, such amounts or costs, together with interest thereon at the
Involuntary Rate, shall be added to the indebtedness secured hereby and shall be
secured by the Mortgage .
SECTION 3.19. If at any time Mortgagor believes that Mortgagee has not
acted reasonably in granting or withholding any approval or consent under the
Note, this Mortgage or any other document or instrument now or hereafter
executed and delivered in connection therewith or otherwise with respect to the
loan secured hereby, as to which approval or consent either Mortgagee has
expressly agreed to act reasonably, or absent such agreement, a court of law
having jurisdiction over the subject matter would require Mortgagee to act
reasonably, then Mortgagors' sole remedy shall be to seek injunctive relief or
specific performance and no action for monetary damages or punitive damages
shall in any event or under any circumstance be maintained by Mortgagor against
Mortgagee.
SECTION 3.20. Anything in this Mortgage or the other Loan Documents (as
defined below) to the contrary notwithstanding, Mortgagor shall indemnify and
hold Mortgagee harmless and defend it at Mortgagor's sole cost and expense
against any loss or liability, cost or expense (including without limitation,
reasonable attorneys' fees and disbursements of Mortgagee's counsel whether
in-house staff, retained firms, or otherwise) and all claims, actions,
procedures and suits arising out of or in connection with (a) any ongoing
matters arising out of the transaction contemplated by this Mortgage, the Note
and any other document or instrument now or hereafter executed and/or delivered
in connection with the Indebtedness (hereinafter referred to as the "Loan
Documents") and the Indebtedness (including, but not limited to, all costs and
any reappraisals of the Mortgaged Property or any other collateral for the
Indebtedness), (b) any amendment to, or restructuring of, the Indebtedness and
the Loan Documents, (c) any and all lawful action that may be taken by Mortgagee
in connection with the enforcement of the provisions of this Mortgage or the
Note or any of the other Loan Documents, whether or not suit is filed in
connection with the same, or in connection with the Mortgagor, any Guarantor
and/or any partner, joint venturer or shareholder thereof becoming a party to a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding, and (d) the past, current and/or future sale or offering for sale of
limited partnership interests in Mortgagor, including, without limitation,
liabilities under any applicable securities or blue sky laws. All sums expended
by Mortgagee shall be payable on demand and, until reimbursed by Mortgagor
pursuant hereto, shall be deemed additional principal of the Indebtedness and
shall bear interest at the penalty interest rate set forth in the Note.
SECTION 3.21. Mortgagor acknowledge that Mortgagor's obligation to pay the
debt in accordance with the provisions of the Note and this Mortgage is and
shall at all times continue to be absolute and unconditional in all respects,
and shall at all times be valid and enforceable irrespective of any other
agreements or circumstances of any nature whatsoever which might otherwise
28
constitute a defense to the Note or this Mortgage or the obligation of Mortgagor
thereunder to pay the debt or the obligations of any other person relating to
the Note or this Mortgage or the obligations of Mortgagor under the Note or this
Mortgage or otherwise with respect to the loan secured hereby in any action or
proceeding brought by Mortgagee to collect the debt, or any portion thereof, or
to enforce, foreclose and realize upon the lien and security interest created by
this Mortgage or any other document or instrument securing repayment of the
debt, in whole or in part.
SECTION 3.22. If any action or proceeding be commenced to collect the Note
or enforce any of its provisions or the provisions of this Mortgage, Mortgagor
expressly waive any and every right to interpose any counterclaim in any such
action or proceeding except for mandatory counterclaims which will be waived if
not asserted, and also irrevocably and unconditionally waives any and all rights
to trial by jury in any action, suit or counterclaim arising in connection with,
out of or otherwise relating to the Note, this Mortgage and any other document
or instrument now or hereafter executed and delivered in connection therewith or
the loan secured by this Mortgage.
SECTION 3.23. This Mortgage and the Note are subject to the express
condition that at no time shall Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note to liability as a result of being in excess of
the maximum interest rate which Mortgagor are permitted by law to contract or
agree to pay. If by the terms of this Mortgage or the Note, Mortgagor are at any
time required or obligated to pay interest on the principal balance due under
the Note at a rate in excess of such maximum rate, the rate of interest under
the Note shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Note.
SECTION 3.24. Mortgagee shall, upon request of Mortgagor and upon payment
of the obligation secured by the Mortgage and all customary and reasonable
assignment and legal fees related thereto, assign this Mortgage to a party
designated by Mortgagor.
SECTION 3.25. Cross Default and Cross Collateralization. This Mortgage is
cross-defaulted and cross-collateralized with each and every obligation of the
Mortgagor due to the Mortgagee. Specifically, any event of default or default
under any loan made by Mortgagee to the Mortgagor, or any other obligation of
the Mortgagor or any guarantor in favor of the Mortgagee, shall be deemed an
Event of Default hereunder. The loan and Note secured hereby, and any other
obligation of the Borrower due to the Mortgagee, are hereby collateralized with
the same security and collateral securing the said Note and any other loan or
obligation due from Mortgagor to the Mortgagee.
29
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
the date first above written.
CVD EQUIPMENT CORPORATION,
a New York corporation
Mortgagor
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------- -----------------------------------
witness ▇▇▇▇ ▇▇▇▇▇▇▇,
Secretary and CFO
CAPITAL ONE, N.A.,
Mortgagee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇,
Vice-President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) : ss.:
County of Suffolk )
On the 30th day of June, 2008, before me, the undersigned, personally
appeared ▇▇▇▇ ▇▇▇▇▇▇▇, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that she executed same in her capacity,
and that by her signature in the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Notary Public
State of New York )
) : ss.:
County of Suffolk )
On the 30th day of June, 2008, before me, the undersigned, personally
appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇ personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that she executed same in her capacity,
and that by her signature in the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Notary Public
31
CONSOLIDATION, EXTENSION AND MODIFICATION AGREEMENT
Dated: June 30, 2008
between
CVD EQUIPMENT CORPORATION,
a New York corporation,
with an address at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Mortgagor")
and
CAPITAL ONE, N.A.,
having an office at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Mortgagee")
LOCATION OF PREMISES:
Street Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ of: Saugerties
County of: Ulster
State of: New York
Section: 17.4
Block: 2
Lot: 31
After recording, please return to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ESQ.
Ferro, Kuba, Mangano, Sklyar, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇.▇.
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
This instrument was prepared by the above-named attorney.