STATE OF SOUTH CAROLINA THIRD LOAN MODIFICATION AND
EXTENSION AGREEMENT, CROSS-PLEDGE
COUNTY OF GREENVILLE AND DEFAULT AGREEMENT, AND
MORTGAGE AMENDMENT AGREEMENT
THIS THIRD LOAN MODIFICATION AND EXTENSION AGREEMENT, CROSS-PLEDGE AND
DEFAULT AGREEMENT, AND MORTGAGE AMENDMENT AGREEMENT ("Agreement") is made and
executed to be effective the 29th day of September, 1995, by and between NEW
YORK LIFE INSURANCE COMPANY ("Lender" or "New York Life"), and ▇▇▇▇▇▇▇ COMPANIES
INCOME PROPERTIES, L.P. I, a Delaware Limited Partnership ("▇▇▇▇▇▇▇" or
"Borrower" or "Maker"), who hereby agree as follows:
W I T N E S S E T H :
WHEREAS, Dayton & Associates XII, a South Carolina General Partnership,
executed its certain Promissory Note ("Note") dated June 2, 1988, whereby it
promised to pay to the order of New York Life Insurance Company the sum of SEVEN
MILLION FIFTY THOUSAND DOLLARS ($7,050,000.00), or so much thereof as may be
advanced, with interest thereon at the rate of Nine percent (9.0%) per annum as
defined in said Note; and
WHEREAS, said Note is secured in whole or in part by a certain Mortgage,
Assignment of Leases and Rents and Security Agreement ("Mortgage") recorded on
June 1, 1988, in the Office of the Register of Mesne Conveyances for Greenville
County, in Mortgage Book 1936 at Page 273; and
WHEREAS, simultaneously with the delivery of the Note and the Mortgage,
Dayton & Associates XII executed and delivered to Lender an Assignment of
Lessor's Interest in Lease(s) - with Assignment of Rents Income and Cash
Collateral ("Assignment of Leases") recorded in the Office of the Register of
Mesne Conveyances for Greenville County in Book 1326 at Page 934 on June 1,
1988; and likewise filed in said office a UCC Financing Statement #881788 on
June 2, 1988; and likewise filed on June 2, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ #▇▇-
▇▇▇▇▇▇ ▇▇ the Office of the Secretary of State for South Carolina, ("UCC"); and
WHEREAS, Dayton & Associates XII transferred the real property encumbered
by said Loan and subject to the lien of the Mortgage to ▇▇▇▇▇▇▇ by general
warranty deed recorded July 12, 1988 in the Office of the Register of Mesne
Conveyances for Greenville County, South Carolina in Book 1331 at Page 431; and
WHEREAS, the maturity date of said Note was extended and certain terms and
conditions were modified in that certain Loan Modification and Extension
Agreement and Mortgage Amendment effective June 10, 1993 and recorded September
14, 1993 in the Office of the Register of Mesne Conveyances for Greenville
County in Mortgage Book 2442 at Page 450 along with that certain UCC Financing
Statement filed in said Office on September 21, 1993, as Document No. 93-2524
("First Modification"); and
WHEREAS, the maturity date on the Note was further extended and certain
terms and conditions were modified through that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment dated effective June 10, 1994,
and recorded December 28, 1994, in the Office of the Register of Mesne
Conveyances for Greenville County, South Carolina, in Mortgage Book No. 2632 at
Page 0103; and
WHEREAS, said Note, Mortgage, Assignment of Leases, UCC, First
Modification and Second Modification, as further modified hereafter by this
Agreement, are hereinafter sometimes referred to collectively as the "Greenville
Loan"; and
WHEREAS, ▇▇▇▇▇▇▇ wishes to extend the maturity date of said Greenville
Loan until October 10, 1998, and modify and amend the Greenville Loan in certain
other particulars as hereinafter provided; and
WHEREAS, Lender and ▇▇▇▇▇▇▇ have agreed to said modifications, amendments
and extension of said Greenville Loan under the terms and conditions hereafter
set forth, and wish to document said modifications, amendments and extension by
the execution and recording of this Agreement; and
WHEREAS, ▇▇▇▇▇▇▇ and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of One Million Six Hundred Thousand Dollars ($1,600,000.00) dated June 2, 1988,
as secured by a Mortgage recorded in Mortgage Book 337 at Page 133 in the Office
of the Register of Mesne Conveyances for Georgetown County, South Carolina (the
"RMC Office"), together with all related loan documents which Mortgage was
modified by that certain Loan Modification and Extension Agreement and Mortgage
Amendment recorded in said RMC Office in Mortgage Book 642 at Page 299, and was
further modified by that certain Second Loan Modification and Extension
Agreement and Mortgage Amendment recorded in said RMC Office in Mortgage Book
742 at Page 248, and which is being further modified simultaneously herewith
(the "Georgetown Loan").
WHEREAS, ▇▇▇▇▇▇▇ and Lender are also currently successor borrower and
lender respectively pursuant to that certain loan in the original principal sum
of Eleven Million Four Hundred Thousand Dollars ($11,400,000.00) dated June 8,
1988, as secured by a Mortgage recorded in Mortgage Book 1052 at Page 198 and
Deed Book 1041 at Page 64 in the Office of the Register of Mesne Conveyances for
Aiken County, South Carolina (the "RMC Office"), together with all related loan
documents which Mortgage was modified by that certain Loan Modification and
Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book 718 at Page 337 along with that certain UCC Financing
Statement Amendment Number 1453 also filed in said office in Mortgage Book 1579
at Page 104, and was further modified by that certain Second Loan Modification
and Extension Agreement and Mortgage Amendment recorded in said RMC Office in
Miscellaneous Book Volume 777 at Page 324, and which is being further modified
simultaneously herewith (the "Aiken Loan").
NOW, THEREFORE, Lender and ▇▇▇▇▇▇▇ in consideration of the sum of One and
00/100 Dollar ($1.00), the additional cross-collateralization between and among
the Greenville Loan, the Aiken Loan and the Georgetown Loan, and other good and
valuable consideration paid by ▇▇▇▇▇▇▇, the mutual covenants herein contained,
the receipt and sufficiency of which is hereby acknowledged by all parties, do
hereby agree to the modifications and amendments of the terms for payment of the
indebtedness evidenced by said Note, and to the terms of collateral security for
repayment thereof, as secured by said Mortgage and other Greenville Loan
documents, so that the same shall be due and payable as follows, and further
agree to all matters hereinafter set forth:
1. Incorporation of Recitals. The above recitals are incorporated into
and made a part of this Agreement.
2. Outstanding Principal Balance of Loan. The outstanding principal
balance of the Greenville Loan is Six Million Eight Hundred Eighty-
Three Thousand Four Hundred Forty-Two and 06/100 Dollars
($6,883,442.06) as of the date hereof. Concurrently with the
execution of this Agreement, ▇▇▇▇▇▇▇ shall remit payments to Lender
of $32,696.35, representing the per diem interest for the period
from September 10, 1995 through September 28, 1995, and $18,929.47
representing the per diem interest for the period from September 29,
995 through October 9, 1995, due and payable October 10, 1995.
3. The New Maturity Date; Renewal Option. The New Maturity date of the
Greenville Loan shall be revised from June 10, 1995 to October 10,
1998. Moreover, ▇▇▇▇▇▇▇ shall have the option to renew the existing
loan balance for an additional (2) years at an interest rate to be
determined by Lender in its sole and absolute discretion, and the
amortization schedule shall be recast to reflect a fifteen (15) year
amortization schedule provided that (i) neither the Greenville Loan
nor the Georgetown Loan or the Aiken Loan is in default, (ii) the
loan to value does not exceed eighty-five percent (85%), and (iii)
the debt coverage ratio is greater than or equal to 1.10, all of
which to be determined by Lender in its sole and absolute
discretion. ▇▇▇▇▇▇▇ shall notify Lender of its intention to renew
the loan not earlier than one hundred twenty (120) days nor later
than ninety (90) days prior to the New Maturity date of the
Greenville Loan.
4. The Interest Rate; Monthly Payments; Principal Balance at Maturity.
The interest rate for said Greenville Loan shall remain at Nine
percent (9.0%) per annum. The monthly installments shall be in the
amount of $64,460.00, due on the 10th day of each month, commencing
with such installments upon the tenth day of November 1995, and
continuing thereafter on the tenth day of each month to and
including October 1998, at which time the principal balance and all
other sums remaining unpaid on the Greenville Loan shall be due and
payable.
5. Prepayment Provision. It is agreed that the Note for the Greenville
Loan shall be modified to provide the following prepayment
privilege:
Upon ninety (90) days written notice to New York Life, Maker
may prepay the Note in full on any monthly installment due
date provided there is paid, in addition to interest accrued
to the date of such prepayment, a prepayment fee equal to the
difference between the Loan Interest Rate and the Yield on
U.S. Treasury Notes for a term equal to the remaining original
loan term times the outstanding principal balance of the
Greenville Loan at the time of such prepayment multiplied by
the number of years and any fraction thereof on the loan term
as if there had been no prepayment. In no event shall the
prepayment fee be less than one percent (1%). The prepayment
fee is to be computed on the unpaid principal balance at the
time of such prepayment.
In the event the outstanding principal balance hereof shall
become due and payable as a result of (a) an Event of Default
(as such term is defined in the Mortgage) causing the
acceleration under this Note or the Loan Documents, which
Event of Default shall be conclusively deemed to be a willful
default for purposes of avoiding the prepayment fee to which
Holder is entitled; (b) the exercise by Maker or any other
party having the right to redeem or to prevent a foreclosure
of the Secured Property of any right of redemption or
repayment under foreclosure laws or other action to prevent a
foreclosure of the Secured Property; (c) an acceleration by
Holder as a result of the sale or further encumbrance of the
Secured Property in violation of the applicable provisions of
the Mortgage; or (d) a casualty or condemnation with respect
to the Secured Property; then, in such event, Maker shall pay
the prepayment fee and to the extent permitted by law, such
prepayment fee shall be calculated in the same manner as
specified above; provided that in the event such prepayment
fee is construed to be interest under the laws of the State of
South Carolina in any circumstance, such payment shall not be
required to the extent that the amount thereof, together with
other interest payable hereunder, exceeds the maximum interest
that may be lawfully charged under the laws of the State of
South Carolina.
6. Cross-Default and Cross-Collateralization. It is expressly understood
and agreed that the occurrence of a default under the Georgetown Loan
or the Aiken Loan, or any document securing either of them, or a
default under this Greenville Loan, for which no right to notice or
cure shall exist, shall constitute a cross default under each of the
Georgetown Loan, the Aiken Loan and the Greenville Loan, and the
rights of enforcement and other rights and remedies applicable to
default shall be fully operative and applicable as to each and all of
said Georgetown Loan, Aiken Loan and Greenville Loan. It is further
understood and agreed that all collateral now or hereafter securing the
Georgetown Loan, the Aiken Loan and the Greenville Loan shall also
secure each of the Georgetown Loan, the Aiken Loan and the Greenville
Loan. The Mortgage and other Loan Documents for the Greenville Loan
shall hereby be amended to add the description of the collateral from
each of the Georgetown Loan and the Aiken Loan to the collateral
(Secured Property) securing the Greenville Loan, which descriptions are
as set forth on Exhibits "A" and "B" hereto, respectively, and
which are incorporated into and made a part of this Agreement.
7. Insurance. Section 1.03(F)(2) of the Greenville Mortgage is hereby
deleted and substituted in lieu thereof is the following revised
Section 1.03(F)(2):
(2) In the event of any such damage or destruction, Mortgagee
shall have the option in its sole and absolute discretion and
without regard to the adequacy of its security hereunder of
applying all or part of the insurance proceeds (i) to the
Indebtedness, whether or not then due, in the inverse order of
maturity, or (ii) to the repair or restoration of the
Improvements, or (iii) to cure any then current default under
this Mortgage or the other Loan Documents, (iv) to reimburse
the costs and expenses of Lender in connection with the
recovery of such insurance proceeds; or (v) any combination of
the foregoing.
8. Insurance. Section 1.03(F) is further amended by adding the
following provisions as new subsections:
(4) Mortgagor's Use of Proceeds. In the event of any
destruction to the Premises by fire or other casualty (except for
any destruction which occurs during the last six (6) months of the
loan term), the insurance proceeds shall be made available to the
Mortgagor for repair and restoration after deducting and payment to
Mortgagee of Mortgagee's costs of collection and disbursement of
such proceeds and any other deductions Mortgagee is entitled to
under subsection (F)2 above, provided:
(a) The proceeds are deposited with Mortgagee;
(b) No default shall have occurred and be continuing under
the terms of any of the Loan Documents;
(c) The insurance carrier does not deny liability to any
named insured;
(d) If Mortgagee so requests, Mortgagee is furnished with an
estimate of the cost of restoration accompanied by a
certificate of Mortgagee's Architect as to such costs;
(e) The value of the Secured Property so restored or rebuilt
shall be at least equal to what was originally erected;
(f) Mortgagor furnishes Mortgagee with evidence reasonably
satisfactory to Mortgagee that all Improvements so
restored and/or reconstructed and their use shall fully
comply with all (i) applicable easements, covenants,
conditions, restrictions or other private agreements
affecting the Premises, (ii) zoning and building laws,
ordinances and regulations and (iii) all other
applicable federal, state and municipal laws,
regulations and requirements;
(g) If the estimated cost of reconstruction exceeds the
proceeds available, at Mortgagee's option, Mortgagor
shall (i) furnish a bond of completion or provide such
other evidence satisfactory to Mortgagee of Mortgagor's
ability to meet such excess costs of (ii) deposit with
Mortgages additional funds equal to such excess;
(h) Mortgagee shall have received notice of destruction
caused by such fire or other hazard from the Mortgagor
within ten (10) days from the date thereof, which notice
shall state the date of such fire or other hazard and a
request to Mortgagee to make the insurance proceeds
available to Mortgagor;
(i) The aggregate monthly net income under all Leases
remaining in full force and effect with respect to the
Secured Property after restoration shall be in an amount
sufficient to pay the monthly installments of principal
and interest required to be paid upon the Obligations as
well as all escrows for taxes and insurance as estimated
by Mortgagee hereunder;
(j) All Leases remain in full force and effect; and
(k) Mortgagee shall have determined that such damage or
destruction is fully reparable prior to the Maturity
Date (as defined in the Note).
(5) Disbursement of the proceeds during the course of
reconstruction shall be upon the certification of Mortgagee's
Architect as to the cost of the work done and the conformity of the
work to plans and specifications approved by Mortgagee, and evidence
supplied by a title insurance company acceptable to Mortgagee that
there are no liens arising out of the reconstruction or otherwise.
Notwithstanding the above, a portion of the proceeds may be released
prior to the commencement of reconstruction to pay for items
approved by Mortgagee in its sole discretion. Disbursements shall
be made within ten (10) business days after a request by Mortgagor.
No payment made prior to the final completion of work shall exceed
ninety percent (90%) of the value of the work performed from time to
time, and at all times the undisbursed balance of said proceeds
remaining with the Mortgagee must be at least sufficient to pay for
the cost of completion of the work free and clear of liens. Final
payment shall be upon a certification of Mortgagee's Architect as to
completion in accordance with plans and specifications approved by
Mortgagee.
(6) At such time as Mortgagee's Architect shall certify to
Mortgagee that the damaged or destroyed portion of the Secured
Property has been put in a state of repair equivalent to or better
than that existing prior to the date of such fire or other casualty,
the work shall be deemed completed. With Mortgagee's prior written
consent, which may be granted or withheld in Mortgagee's sole
discretion; any certification required to be made by an architect or
registered engineer may be made by a reputable contractor approved
by Mortgagee. The balance of the insurance proceeds so deposited
with Mortgagee after full disbursement in accordance with the terms
herein, at the sole option of Mortgagee, shall be either (a)
returned to Mortgagor, it being understood that such obligation or
reimbursement shall not exceed the amount of insurance proceeds for
such restoration and/or repair, or (b) applied to the payment of
installments of the Obligations in inverse order of maturity whether
or not such installments shall be due and payable.
(7) In all cases where any destruction to the Secured Property by
fire or other casualty occurs during the last six (6) months of the
loan term, or in Mortgagee's sole judgment, Mortgagor is not
proceeding with the repair or restoration in a manner that would
entitle Mortgagor to have the proceeds disbursed to it, or for any
other reason Mortgagee determines in its sole judgment that
Mortgagor shall not be entitled to such proceeds pursuant to the
terms of this Mortgage, Mortgagee shall have the options set forth
in subsection F(2) above.
(8) Under no circumstances shall Mortgagee become personally
liable for the fulfillment of the terms, covenants and conditions
contained in any of the Leases or obligated to take any action to
restore the Secured Property.
9. Covenants Regarding Hazardous Substances. Sections 1.10 and 1.13(B)
of the existing Greenville Mortgage are hereby deleted in their
entirety and in lieu thereof is substituted the following:
1.10 A. Mortgagor's Representations, Warranties & Covenants.
To the best of Mortgagor's actual knowledge, Mortgagor
represents, warrants and covenants that Hazardous Materials are not
being used, on, from, or affecting the Secured Property in any
manner and, to the best of Mortgagor's actual knowledge, no prior
owner of the Secured Property or any tenant, subtenant, prior tenant
or prior subtenant has used "Hazardous Materials" as such term is
hereinafter defined, on, from, or affecting the Secured Property, in
any manner. Mortgagor represents warrants and covenants: (i) that
the Secured Property is in compliance with all Environmental Laws
(as hereafter defined); (ii) that there are no conditions existing
currently or reasonably likely to exist during the term of this
Mortgage which would subject Mortgagor to damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws as
such term is hereinafter defined, or assertions thereof, or which
require or are likely to require cleanup, removal, remedial action
or other response pursuant to Environmental Laws by Mortgagor; (iii)
that Mortgagor is not a party to any litigation or administrative
proceedings, nor so far as is known by Mortgagor is any litigation
or administrative proceeding threatened against it, which asserts or
alleges that Mortgagor has violated or is violating Environmental
Laws or that Mortgagor is required to clean up, remove or take
remedial or other responsive action due to the disposal, depositing,
discharge, leaking or other release of any hazardous substances or
materials; (iv) that neither the Secured Property nor Mortgagor is
subject to any judgment, decree, order or citation related to or
arising out of Environmental Laws or has been named or listed as a
potentially responsible party by any governmental body or agency in
a matter arising under any Environmental Laws; (v) that no permits,
licenses or approvals material to the ownership or operation of the
Secured Property are required under Environmental Laws relative to
the Secured Property, or any portion of the Secured Property; and,
(vi) to the best of Mortgagor's knowledge, there are not now, nor to
the best of Mortgagor's knowledge after due and diligent inquiry
have there ever been materials stored, deposited, treated, recycled
or disposed of, on, under or at the Secured Property (or tanks or
other facilities thereon containing such materials) which materials
or contained materials, if known to be present at the Secured
Property or present in soils or ground water, would require cleanup,
removal or some other remedial action under Environmental Laws.
Mortgagor shall promptly advise Mortgagee in writing of any
Hazardous Materials claims which are hereafter asserted, or if
Borrower obtains knowledge of any discharge, release, or disposal of
any Hazardous Materials in, on, under or about the Secured Property,
or that any condition described hereinabove has occurred.
B. Definition "Environmental Laws".
Wherever used in this Mortgage and/or the Loan Instruments,
the term, "Environmental Laws" shall mean the Comprehensive
Environmental Response Compensation and Liability Act as amended, 42
U.S.C. Section 9601, et seq.; the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq.; any so-called "Superfund" or
"Superlien" law or any other federal, state, local and foreign laws
or regulations, codes, plans, orders, decrees, judgments,
injunctions, notices or demand letters issued, promulgated or
entered thereunder relating to pollution or protection of the
environment, (collectively "Environmental Laws"), including without
limitation, Environmental Laws relating to reclamation of land and
waterways and Environmental Laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes or otherwise relating to worker
health and safety or public health and safety, in each case material
to the ownership or operation of the Secured Property. Neither the
Mortgagor nor, to the best knowledge and belief of the Mortgagor,
any other person has ever caused or knowingly permitted, in
violation of law, any Hazardous Materials to be placed, held,
located or disposed of, on, under or at the Secured Property or any
part thereof, or any other real property legally or beneficially
owned (or any interest or estate which is owned) by the Mortgagor in
any state now or hereafter having in effect a so-called "Superlien"
law or ordinance or any part thereof (the effect of which would be
to create a lien on the Secured Property to secure any obligation in
connection with the real property in such state), and neither the
Secured Property, nor any part thereof, nor any other real property
legally or beneficially owed (or any interest or estate therein
which is owned) by the Mortgagor in any state now or hereafter
having in effect a so-called "Superlien" law or ordinance or any
part thereof, has ever been used (whether by the Mortgagor, to the
best knowledge of the Mortgagor, by any other person) as a dump site
or storage (whether permanent or temporary) site for any Hazardous
Materials. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge and belief of Mortgagor, any
other person has ever caused or knowingly permitted any asbestos or
under-ground, storage facility to be located on the Secured
Property. Mortgagor further represents and warrants that neither
Mortgagor nor, to the best knowledge or belief of Mortgagor having
made no investigation, any other person has discovered any
occurrence or condition on any real property adjoining or in the
vicinity of the Secured Property that could cause the Secured
Property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of the Secured
Property under any federal, state local law, ordinance or regulation
relating to Hazardous Materials.
C. Environmental Indemnification of Mortgagee.
Mortgagor hereby indemnifies and agrees to defend, protect and
hold Mortgagee, its partners, employees and agents, and any
successor, successors, or assigns to Mortgagee's interest in the
chain of title to the Secured Property, harmless from and against
any and all losses, liabilities, fines, charges, damages, injuries,
penalties, response and investigation costs, costs, expenses and
claims of any and every kind whatsoever paid, incurred or suffered
by or asserted against Mortgagee including without limitation, (a)
any loss in value of the improvements, (b) all foreseeable
consequential damages; (c) the costs of any required or necessary
repair, cleanup or detoxification of the Secured Property, and the
preparation and implementation of any closure, remedial or other
required plans; and (d) all reasonable costs and expenses incurred
by Mortgagee in connection with clauses (a), (b) and (c) hereof,
including but not limited to, reasonable attorneys' fees and fees of
any and all other consultants, experts and engineers and witnesses
(expert and otherwise) for, with respect to, or as a direct or
indirect result of (i) the presence on or under, or the escape,
seepage, leakage, spillage, emission, discharge or release from, the
Secured Property or any other property legally or beneficially owned
(or any interest or estate which is owned) by Mortgagor of any
Hazardous Material (as hereinafter defined) (including, without
limitation, any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under, through or as a result
of any Environmental Laws relating to or imposing liability or
standards of conduct concerning any Hazardous Material), or (ii) the
presence of any asbestos on the Secured Property (including, without
limitation, the cost of relocating tenants and the cost of removal)
regardless of whether caused by, or within the control of,
Mortgagor, or any predecessor in title or any employees, agents,
contractors or subcontractors of Mortgagor, or any third persons at
any time, occupying or present on the Secured Property, or arising
out of or related to any breach of Mortgagor's obligations under
this Mortgage. Any of such activities were or will be undertaken in
accordance with Environmental Laws. For the purposes of this
Mortgage, the term "Hazardous Material" means and includes any
flammable explosives, radioactive materials, or hazardous, toxic or
dangerous waste, substance or related material including, but not
limited to, substances defined as such in (or for purposes of) the
Environmental Laws regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter in
effect. The indemnification and hold harmless agreement of
Mortgagor contained herein shall survive the repayment of all sums
due under the Loan Documents and the discharge and satisfaction of
this Mortgage of transfer of title to Mortgagee or any third party
by foreclosure or otherwise.
D. Compliance With Environmental Laws.
Mortgagor shall keep and maintain the Secured Property in
compliance with and shall not cause or permit the Secured Property
to be in violation of any Environmental Laws or any federal, state
or local laws relating to hygiene or to the environmental conditions
on, under or about the Secured Property including, but not limited
to, soil and ground water conditions. Mortgagor shall not use,
generate, manufacture, store, dispose or permit to exist in, on,
under or about the Secured Property any Hazardous Material.
Mortgagor hereby agrees at all times to comply fully and in a timely
manner with, and to cause all of its employees, agents, contractors
and subcontractors and any other persons occupying or present on the
Secured Property to so comply with all Environmental Laws applicable
to the use, generation, handling, storage, treatment, transport,
storage, manufacture and disposal of any Hazardous Material now or
hereafter located or present on or under the Secured Property,
including, but not limited to any underground storage tanks.
E. Written Consent for Environmental Action.
Without Mortgagee's prior written consent, Mortgagor shall not
take any remedial action in response to the presence of any
Hazardous Materials, on, under, or about the Secured Property, nor
enter into any settlement agreement, consent decree, or other
compromise in respect to any Hazardous Materials claims, which
remedial action, settlement, consent or compromise might, in
Mortgagee's sole judgment, impair the value of Mortgagee's security
hereunder; provided, however, that Mortgagee's prior consent shall
not be necessary in the event that the presence of any Hazardous
Material on, under, or about the Secured Property either poses an
immediate threat to the health, safety or welfare of any individual
or is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Mortgagee's consent
before taking such action, provided that in such event Mortgagor
shall notify Mortgagee as soon as practicable of any action so
taken. Mortgagee agrees not to withhold its consent where such
consent is required hereunder, if either (a) a particular remedial
action is ordered by a court of competent jurisdiction, or (b)
Mortgagor establishes to the reasonable satisfaction of Mortgagee
that there is no reasonable alternative to such remedial action
which would result in less impairment of Mortgagee's security
hereunder.
F. Mortgagee's Right to Contest Environmental Claims.
Mortgagee shall have the right, but not the obligation, to
join and participate in, as a party if it so elects, any legal
proceeding or actions initiated by any person or entity in
connection with any Hazardous Materials claims and in such case, to
have its reasonable attorneys' fees and costs incurred in connection
therewith paid by Mortgagor.
10. Audits. Section 1.06(B) of the Greenville Mortgage shall be amended
by adding at the end of the existing sentence, the additional words
"at Mortgagor's expense".
11. Compliance with Laws. Section 1.11(K) of the Greenville Mortgage is
amended by adding at the conclusion thereof the following additional
provisions:
Mortgagor shall comply with any and all state and federal
legislation relating to environmental protection and such other
legislation, rules and regulations as are in or may come into effect
and apply them to Mortgagor, Mortgagee, this Loan Transaction or the
Secured Property or occupancy users thereof, whether as lessees,
tenants, licensees or otherwise. Mortgagor does agree to indemnify
and hold Mortgagee harmless against any and all claims, costs or
expenses relating to such environmental protection, real estate
taxes, insurance premiums as well as fraud, material
misrepresentation or misappropriation of funds notwithstanding any
exculpation or non-recourse provision in the Loan Documents.
12. Further Sales or Encumbrances. Section 1.12(B) of the Greenville
Mortgage is modified by adding to the initial paragraph at the
conclusion thereof, the following additional provisions:
For purposes of this paragraph, the following shall also be
deemed to constitute a transfer of the Secured Property, whether
made directly or through an intermediary:
(i)If Mortgagor is a corporation, a transfer or disposition of
more than fifty percent (50%) of the outstanding voting stock
of Mortgagor; or
(ii)If Mortgagor is a partnership, a transfer of disposition
of any interest of any general partner in Mortgagor.
Notwithstanding the foregoing, however, Mortgagor shall be permitted the one-
time right to transfer title to the Secured Property to an affiliated entity in
which the general partner is the current general partner of Mortgagor.
13. Covenants Regarding Tenant Improvement, Leasing Commissions, Capital
Improvements and Debt Service Shortfall Escrow Account. ▇▇▇▇▇▇▇ covenants
and agrees that within fifteen (15) days following the end of each
calendar quarter commencing January 1, 1996, ▇▇▇▇▇▇▇ shall deposit or
cause to be deposited into an account maintained at a commercial bank (the
"Depository") acceptable to Lender all Net Cash Flow as hereinafter
defined, generated from the use and operation of the Secured Property,
during the immediately preceding calendar quarter (the "Escrow Account").
Proof of such deposit, in the form of either a copy of the deposit slip or
a statement from the Depository, shall be submitted to Lender no later
than twenty (20) days following the end of each calendar quarter. Provided
that the Greenville Loan is not in default, the funds on deposit in the
Escrow Account shall from time to time be applied by Depository or
disbursed to ▇▇▇▇▇▇▇ to pay for tenant improvements, leasing commissions,
capital improvements and for debt service shortfall. Additionally, a
maximum amount calculated at two percent (2%) of the total collected
revenue shall be deducted from Net Cash Flow to be applied to the payment
of partnership operating costs.
"Income" shall mean all rents, income and profits received on a cash basis
by ▇▇▇▇▇▇▇ from the Secured Property.
"Net Cash Flow" shall mean Income less operating expenses. Operating
expenses shall include a property management fee not to exceed three percent
(3%) of the total base rental income and expense reimbursements.
Within fifteen (15) days after the end of each calendar quarter, ▇▇▇▇▇▇▇
shall submit to Lender a statement of Net Cash Flow for the preceding quarter,
certified to be true and accurate by an officer of ▇▇▇▇▇▇▇. Additionally,
within fifteen (15) days after the end of each calendar year ▇▇▇▇▇▇▇ shall
submit to Lender a statement of New Cash Flow for the preceding year, certified
to be true and accurate by an officer of ▇▇▇▇▇▇▇.
Funds in the Escrow Account are to be used for costs incurred relating to
tenant improvements, leasing commissions, capital improvements and potential
debt service shortfall. Additionally a maximum amount calculated at two percent
(2%) of the total collected revenue may be deducted from Net Cash Flow to be
applied to the payment of partnership operating costs.
For disbursements (as hereinafter defined) to be made, the following
conditions must be met:
(A) All work shall be performed in a good and workmanlike manner, using
materials of at least standard grade and quality, to the
satisfaction of Lender in its sole discretion, free and clear of any
claims or liens for labor and materials.
(B) The deposits shall be held in an escrow account satisfactory to
Lender and by a Depository acceptable to Lender as assurance of the
performance of the work. Interim disbursements (each a
"Disbursement") of the Escrow Account shall be made to ▇▇▇▇▇▇▇ for
not less than Five Thousand and 00/100 Dollars ($5,000.00) per
request and no more often than one time per calendar quarter.
Lender shall direct Depository to make Disbursements conditioned
upon the following:
(1) There is no default under this Greenville Loan, the
Georgetown Loan or the Aiken Loan and ▇▇▇▇▇▇▇ shall
deliver to Lender a certificate to such effect signed by
an authorized officer of ▇▇▇▇▇▇▇;
(2) Lender's receipt and approval of the following:
(a) A Breakdown of the Disbursement among the tenant
improvements, leasing commissions, capital
improvements, debt service shortfall and
partnership operating costs.
(b) Lease(s) pertaining to the specific portions of
the Secured Property affected, subject to all of
the requirements set forth under "Occupancy Leases
and Certified Rent Roll" contained in the Mortgage
Loan Application/Commitment.
(C) Further, prior to any subsequent Disbursements, Lender shall receive
evidence of satisfactory completion of tenant improvements, capital
improvements, and payment of leasing commissions relating to the
previous Disbursement. Such evidence shall include the following:
(1) Copies of the paid receipts related to the Disbursement.
(2) A copy of executed lien waivers signed by the leasing
agents, contractor(s) and/or subcontractor(s) paid from
the Disbursement and certificates of occupancy if
required by the local municipality.
(3) An inspection of the premises, at the option of Lender.
The fees and expenses incurred for such inspections
shall be paid by ▇▇▇▇▇▇▇.
(D) All cost and expenses associated with the Escrow Account are to be
borne by ▇▇▇▇▇▇▇. In the event of a default in the Loan Documents,
Lender in its sole discretion will either apply the funds in
reduction of principal or apply the funds towards any outstanding
tenant improvement costs, leasing commissions or capital
improvements.
▇▇▇▇▇▇▇ does hereby designate First Union National Bank of South Carolina,
One Insignia ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇.▇. ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as the proposed Depository for
Lender's approval, and Lender does hereby approve such designation.
14. Force and Effect. It is agreed that said Note, Mortgage, Assignment
of Leases, UCC, First Modification and Second Modification, except as
expressly modified, altered or extended by this Agreement, shall be and
remain in full force and effect, and all of the terms of said documents as
well as those additional terms created hereby have been assumed by
▇▇▇▇▇▇▇.
15. Borrower's Covenant of Payment and Compliance. ▇▇▇▇▇▇▇, in
consideration of the above modifications, amendments and extension and of
One and 00/100 Dollar ($1.00) paid by Lender (the receipt and sufficiency
of which is hereby acknowledged), and of the mutual covenants and
agreements herein contained, does hereby covenant and agree to pay said
principal sum, and interest as set forth in this Agreement, and to comply
with the other terms of said Note, Mortgage, and Assignment of Leases,
First Modification, Second Modification and the provisions of this
Agreement.
16. Effect of Agreement. The Parties hereto agree that the execution of
this Agreement shall not release any guarantor, maker or other party of
said Note or Mortgage or any undertaking in connection therewith, nor
shall this Agreement effect any release of any collateral given at any
time to secure payment of said Note or said other undertaking.
17. ▇▇▇▇▇▇▇ Representation as to Consent. ▇▇▇▇▇▇▇ represents that no
consent of any person, firm or corporation, not a party hereto, is
required for the effectiveness of this Agreement and ▇▇▇▇▇▇▇ agrees to
indemnify and hold harmless the Lender from or against any and all loss,
damage or liability whatever, including attorney's fees, arising out of
the failure to obtain consent of any person not a party hereto.
18. Rate of Interest. It is agreed that nothing herein shall mean or be
construed to mean to call for a rate of interest in excess of that allowed
to be charged by the laws of the State of South Carolina; and that if the
provisions hereof should be determined to call for a rate of interest in
excess of the maximum rate allowed by said laws as to any person, firm or
corporation, then immediately or without necessity of any further action,
the interest rate herein provided shall, as to such person, firm or
corporation, be immediately reduced by that amount necessary to eliminate
said excess.
19. Binding Nature of Agreement. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, their heirs, successors
and assigns.
IN WITNESS WHEREOF, we have hereunto set our hands and seals the day
and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: LENDER:
NEW YORK LIFE INSURANCE COMPANY
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇▇▇ Salabella
▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇ Companies Income
Properties, L.P. I, a Delaware
Limited Partnership
By: ▇▇▇▇▇▇▇ Management Limited
Partnership, General Partner
By: 104 Management Inc.,
General Partner
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Attest: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Secretary
STATE OF NEW YORK )
) A C K N O W L E D G E M E N T
COUNTY OF NEW YORK )
I ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, do hereby certify that ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as duly
authorized Real Estate Vice President of NEW YORK LIFE INSURANCE COMPANY, on
behalf of the corporation, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument, and that ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, as duly authorized Real Estate Vice President of the corporation
personally appeared before me this day and acknowledged his/her attestation
to the foregoing instrument.
WITNESS my hand and official seal this 3rd day of October, 1995.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
Notary Public for New York
My Commission Expires:6/3/97
STATE OF SOUTH CAROLINA )
) A C K N O W L E D G E M E N T
COUNTY OF GREENVILLE )
I, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, do hereby certify that ▇▇▇ ▇. ▇▇▇▇,▇▇., as a duly
authorized officer of 104 Management, Inc., on behalf of 104 Management, Inc.
in its capacity as General Partner of ▇▇▇▇▇▇▇ Management Limited Partnership,
General Partner of ▇▇▇▇▇▇▇ Companies Income Properties, L.P. I, personally
appeared before me this day and acknowledged the due execution of the foregoing
instrument and that ▇▇▇ ▇. ▇▇▇▇, ▇▇., a duly uthorized officer of 104
Management, on behalf of 104 Management Inc. in its capacity as General Partner
of ▇▇▇▇▇▇▇ Management Limited Partnership, General Partner of ▇▇▇▇▇▇▇ Companies
Income Property, L.P. I, personally appeared before me and acknowledged his/her
attestation of the foregoing instrument.
WITNESS my hand and official seal this 29 day of September, 1995.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (SEAL)
Notary Public for South Carolina
My Commission Expires: 3/12/01