Exhibit 10.70
ACADIA TARRYTOWN LLC,
formerly known as
Acadia-Noddle Tarrytown Development Co., LLC
TO
ANGLO IRISH BANK CORPORATION PLC
MORTGAGE CONSOLIDATION AND MODIFICATION AGREEMENT
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Dated: |
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As of October 30, 2007 |
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Location: |
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124-134 Wildey Street |
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County: |
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Westchester |
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Town: |
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Greenburgh |
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Village: |
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Tarrytown |
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Section: |
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1 |
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Sheet: |
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2 |
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Lots: |
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P25 and P25B |
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RECORD AND RETURN TO:
Sullivan & Worcester LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Hugh P. Finnegan, Esq.
TABLE OF CONTENTS
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Section 1.
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Definitions |
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Section 2.
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Consolidation; Spreader; Granting
Clause |
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Section 3.
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Obligations Secured |
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Section 4.
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Representations and Warranties |
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Section 5.
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Mortgagor’s Covenants |
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5.1
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Title |
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5.2
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Payment and Performance of
Obligations |
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5.3
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Insurance |
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5.4
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Payment of Taxes and Liens |
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5.5
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Insurance and Tax Deposits |
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5.6
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Maintenance and Inspections |
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5.7
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Alterations and Additions |
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5.8
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Management and Operation |
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5.9
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Compliance with Laws and
Restrictions |
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5.10
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Hazardous Waste |
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5.11
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Condemnation |
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5.12
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Records and Financial Statements |
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5.13
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Alienation |
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5.14
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Senior or Junior Indebtedness |
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5.15
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Preservation of Easements, Licenses
and Zoning |
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5.16
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Mortgagee’s Right to Pay or
Perform Mortgagor’s Covenants |
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5.17
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Proceedings and Indemnification |
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5.18
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Further Assurances |
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5.19
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Expenses |
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5.20
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Required Repairs |
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5.21
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Estoppel Certificates |
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5.22
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Undertakings |
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Section 6.
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Assignment of Leases and Rents |
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Section 7.
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Security Agreement |
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Section 8.
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Events of Default |
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Section 9.
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Remedies |
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9.1
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Rights upon Default |
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9.2
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Right to Release and Negotiate |
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9.3
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Mortgagor to Surrender
Possession |
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9.4
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Rights under UCC |
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Section 10.
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Miscellaneous |
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10.1
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Notices |
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10.2
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Captions |
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10.3
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Modifications |
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10.4
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Non-Waiver |
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10.5
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Cumulative Nature of Rights and
Remedies |
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10.6
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Limitation of Third-Party Rights |
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10.7
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Interpretation |
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10.8
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Assignability of Mortgagee’s
Interest |
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10.9
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Integration |
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10.10
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Singular Includes Plural |
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10.11
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Severability |
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10.12
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Governing Law |
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10.13
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Incorporation of Exhibits |
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10.14
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Successors and Assigns Bound |
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10.15
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Waiver of Jury Trial |
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Section 11.
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New York Provisions. |
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11.1
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Non-Residential Property |
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11.2
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Trust Fund |
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11.3
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Maximum Amount Secured |
Signature of Mortgagor
Acknowledgment(s)
2
MORTGAGE CONSOLIDATION AND MODIFICATION
AGREEMENT
This Mortgage Consolidation and
Modification Agreement, dated as of this 30th day of October, 2007,
is made by ACADIA TARRYTOWN LLC, formerly known as Acadia-Noddle
Tarrytown Development Co., LLC, a New York limited liability
company, having an address at c/o Acadia Realty Trust, 1311
Mamaroneck Avenue, Suite 260, White Plains, New York 10605,
(“Mortgagor”) in favor of ANGLO IRISH BANK CORPORATION
PLC, a banking corporation organized under the laws of the Republic
of Ireland having its principal place of business at Stephen Court,
18/21 St. Stephen’s Green, Dublin 2, Ireland
(“Mortgagee”).
RECITALS :
WHEREAS, Mortgagor is the
owner of the fee estate in the premises described in Exhibit
A attached hereto (the “Premises”) and
Mortgagee is the owner and holder of certain mortgages covering the
fee estate of Mortgagor in the Premises, as more particularly
described in Exhibit C attached hereto (collectively,
the “Existing Mortgages”) and of the notes, bonds or
other obligations secured thereby, as more particularly described
in Exhibit C attached hereto (collectively, the
“Existing Notes”);
WHEREAS, there is, prior to
the execution of the note and the mortgage dated the date hereof,
presently owing on the Existing Notes and the Existing Mortgages
the principal balance of $1,859,478.61 and interest;
WHEREAS, Mortgagor and
Mortgagee have agreed in the manner hereinafter set forth
(a) to spread the Existing Mortgages and the respective liens
thereof over those portions of the Mortgaged Property not already
covered thereby, if any, and (b) to modify the terms and
provisions of the Existing Mortgages;
NOW THEREFORE, in
consideration of the premises and other good and valuable
consideration, the receipt and legal sufficiency of which is hereby
acknowledged, Mortgagor hereby represents and warrants to and
covenants and agrees with Mortgagee as follows:
Section 1. Definitions .
Each reference in this Mortgage to the following terms shall be
deemed to have the following meaning:
Bankruptcy Code : The federal
bankruptcy code, 11 U.S.C. § 101 et seq ., as
the same now exists or may hereafter be amended.
Collateral : Collectively,
the Personal Property, the Proceeds, the Leases, Rents and Security
Deposits.
Commitment Letter :
Mortgagee’s term sheet, dated September 6, 2007, setting
forth the general terms of the Loan.
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Continuing Expenses : Normal
operating expenses of the Mortgaged Property that are incurred
during the period of any loss due to a casualty with respect to the
Mortgaged Property.
Cost to Repair : The term
“Cost to Repair” is defined in Section 5.3.9
hereof.
Default Condition : The
existence of any Event of Default or the existence of any condition
or state of facts which, with the giving of notice or passage of
time, or both, would constitute an Event of Default.
Default Rate : The rate of
interest payable under the Note at maturity or upon the occurrence
of an Event of Default.
Deposited Funds : Any and all
sums deposited with Mortgagee pursuant to Section 5.5 hereof
for payment of Impositions and insurance premiums.
Environmental Site Assessment
Report : The report, dated October 9, 2007 prepared by ATC
Associates Inc. and provided to Mortgagee in connection with the
Loan.
Event of Default : Any event
of default listed in Section 8 hereof.
Existing Mortgages : The term
“Existing Mortgages” is defined in the Recitals.
Existing Notes : The term
“Existing Notes” is defined in the Recitals.
Guarantor : The term
“Guarantor” shall mean Acadia Strategic Opportunity
Fund, LP.
Guaranty Documents : The term
“Guaranty Documents” shall collectively mean that
certain Non-Recourse Carve Out Guaranty Agreement, dated the date
hereof, executed by Mortgagor and Guarantor in favor of Mortgagee
and that certain Environmental Indemnity Agreement, dated the date
hereof, executed by Mortgagor and Guarantor in favor of
Mortgagee.
Governmental Authority : Each
and every national, state and local governmental body, department,
agency or subdivision having jurisdiction over Mortgagor, any
Guarantor or the Mortgaged Property or any part thereof or any use,
operation or occupancy thereof.
Hazardous Waste : Any
“oil,” “hazardous material,”
“hazardous wastes” or “hazardous
substances” as defined in the Hazardous Waste Laws,
including, without limitation (whether or not included in the
definition contained in the Hazardous Waste Laws), PCBs, asbestos,
radon and other chemicals which would be materially dangerous to
the environment or to human beings.
Hazardous Waste Laws :
Collectively, any present and future federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to
liability for or costs of remediation or prevention of releases of
Hazardous Substances or relating to liability for or costs of other
actual or threatened danger to human health or the
environment,
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including, but not limited to, the following statutes, as amended,
any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability
Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource Conservation
and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the
Clean Water Act; the Clean Air Act; the Toxic Substances Control
Act; the Safe Drinking Water Act; the Occupational Safety and
Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species
Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act.
Hedging Agreement : The term
“Hedging Agreement” shall mean any swap, collar, option
or similar contract entered into or to be entered into between the
Mortgagor and the Mortgagee in connection with the Loan.
Impositions : Any and all
taxes, assessments, water and sewer charges, and other charges of
whatever nature which may at any time be assessed against, levied
upon or constitute a lien on the whole or any part of the Mortgaged
Property, or which otherwise might become a lien prior to this
Mortgage or otherwise have priority in the distribution of the
proceeds of a judicial sale, and any and all interest, costs or
penalties with respect to any and all unpaid taxes, assessments or
charges.
Improvements : Any and all
buildings and improvements now or hereafter located on the
Premises.
Lease : Each and every
agreement providing for use or occupancy of all or any part of the
Mortgaged Property, whether written or oral, whether now existing
or hereafter arising, and any and all amendments, renewals and
extensions thereof including all guaranties thereof.
Lessee : Any tenant pursuant
to a Lease.
Licenses : Any and all
franchises, licenses and permits whether issued by a Governmental
Authority or otherwise, relating to construction on the Premises or
any part thereof, or the use, operation or occupancy of the
Premises and Improvements or any part thereof or any business
conducted thereon.
Loan : The loan evidenced by
the Note.
Loan Documents :
Collectively, the Note, the Security Instruments and the Other
Documents.
Mortgage : The term
“Mortgage” is defined in Section 2.2 hereof.
Mortgaged Property : The term
“Mortgaged Property” as defined in Section 2.1
hereof.
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Net Proceeds : The net amount
of all insurance proceeds received by Mortgagee pursuant to the
provisions of this Mortgage as a result of damage or destruction of
the Mortgaged Property, after deducting Mortgagee’s
reasonable costs and expenses, if any, in collecting the same
available for the repair and restoration of the Improvements.
Note : The term
“Note” means that certain Note Consolidation and
Modification Agreement, dated the date hereof, executed by
Mortgagor in favor of Mortgagee in the principal amount of up to
$9,800,000.00.
Obligations : The term
“Obligations” as defined in Section 3
hereof.
Other Documents : Any
document, instrument or agreement now or hereafter securing the
Note or executed by Mortgagor or any Other Liable Party in
connection with the Loan, other than the Note and the Security
Instruments, including, without limitation, any Hedging
Agreement.
Other Liable Party : Each and
every person, corporation, limited liability company, partnership
or other entity (other than Mortgagor) now or hereafter liable,
absolutely or contingently, for the whole or any part of the
indebtedness evidenced by the Note, including, without limitation,
the Guarantor.
Permitted Encumbrances : The
liens and encumbrances, if any, listed on Exhibit B
attached hereto and incorporated herein by reference and any real
estate taxes and assessments with respect to the Premises and
Improvements to the extent that the same are not yet due and
payable.
Permitted Use : Retail uses
permitted by applicable law.
Personal Property : Any and
all fixtures, machinery, equipment and other personal property of
every kind, now or hereafter located in or upon or affixed to the
Premises or Improvements, or any part thereof, or now or hereafter
used or to be used in connection with any present or future
operation of the Premises or Improvements, or any part thereof, and
now owned or hereafter acquired by Mortgagor, or in which Mortgagor
now or hereafter has an interest, including, without limitation,
any and all (i) heating, lighting, incinerating,
refrigerating, ventilating, air conditioning, air cooling, lifting,
fire extinguishing, plumbing, cleaning, communications and power
equipment and apparatus, (ii) gas, water and electrical
equipment, (iii) elevators, escalators, switchboards, engines,
motors, tanks, pumps, partitions, conduits, ducts and compressors,
(iv) electrical and/or gas appliances, incinerators,
carpeting, furniture and furnishings, draperies, storm windows and
doors, and screens and awnings and (v) Licenses; and any and
all renewals of, replacements, accessions or additions to,
substitutions for and proceeds of any and all of the
foregoing.
Premises : The term
“Premises” is defined in the Recitals.
Proceeds : Any and all
proceeds payable or paid for or with respect to any or as a result
of damage or loss to the Premises, Improvements and Personal
Property, or any part thereof,
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including, without limitation, insurance proceeds, and all awards
in connection with any condemnation or other taking of the
Premises, Improvements and Personal Property, or any part thereof,
or for conveyance in lieu thereof.
Rents : Any and all rents and
other payments of every kind due or payable and to become due or
payable to Mortgagor by virtue of the Leases, or otherwise due or
payable and to become due or payable to Mortgagor as the result of
any use, possession or occupancy of all or any part of the
Mortgaged Property.
Security Deposits : All
tenant security deposits held by or deposited with Mortgagor or
Mortgagee in connection with any of the Leases, whether in the form
of cash, letter of credit or otherwise.
Security Instruments :
(i) this Mortgage, (ii) an Assignment of Leases and Rents
from Mortgagor to Mortgagee of even date herewith, (iii) any
guaranty or indemnity of the obligations of Mortgagor under the
Note or any of the other Loan Documents and (iv) the UCC-1
Financing Statements perfecting the security interest granted
herein.
Section 2. Consolidation;
Spreader; Granting Clause .
2.1. The Existing Mortgages and the
respective liens thereof are hereby spread over those portions of
the Mortgaged Property not already covered thereby, and for
consideration paid and for other good and valuable consideration,
the receipt and legal adequacy of which are hereby acknowledged,
Mortgagor hereby grants, bargains, sells, conveys, transfers and
assigns to Mortgagee, its successors and assigns, forever, WITH
MORTGAGE COVENANTS, and Mortgagor hereby grants to Mortgagee, its
successors and assigns a security interest in and to all of
Mortgagor’s right, title and interest, if any, in the
following property, rights and interests ( such property,
rights and interests being heretofore and hereinafter collectively
referred to as the “Mortgaged Property”):
(i) the
Premises;
(ii) the
Improvements;
(iii) the
Personal Property;
(iv) any
and all easements, rights of way, privileges, hereditaments and
appurtenances now or hereafter belonging to or inuring to the
benefit of the Premises and/or Improvements or any part thereof,
all right, title and interest of Mortgagor in and to the land lying
within any street or roadway adjoining the Premises or any part
thereof, and all right, title and interest of Mortgagor in and to
any now or hereafter vacated streets or roads adjoining the
Premises or any part thereof;
(v) any
and all issues, benefits and profits of the Premises and/or
Improvements;
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(vi) the
Leases, Rents and Security Deposits;
(vii) the
Proceeds;
(viii) the
Deposited Funds;
(ix) any
and all records and books of account now or hereafter maintained by
Mortgagor in connection with the operation of the Premises,
Improvements and Personal Property or any part thereof;
(x) all
of Mortgagor’s right, title and interest in and to any name
under which the Premises and/or Improvements may at any time be
operated and any variation thereof and the goodwill of Mortgagor in
connection herewith or therewith;
(xi) all
of Mortgagor’s right, title and interest in and to any
Hedging Agreement.
All of
which Premises, Improvements, Personal Property and other property
hereby granted, sold and conveyed, or intended so to be, are
collectively referred to as the “Mortgaged
Property.”
TO HAVE
AND TO HOLD the Mortgaged Property unto and to the use of
Mortgagee, its successors and assigns forever.
2.2. The Existing Mortgages and the
respective liens thereof, as so spread, constitute in law but one
mortgage, a single first mortgage lien, covering the Mortgaged
Property and securing the principal sum of up to $9,800,000.00,
together with interest thereon as hereinafter provided (the
Existing Mortgages, as modified, amended, restated, ratified and
confirmed pursuant to the provisions of this Mortgage hereinafter
set forth, being hereinafter collectively referred to as the
“Mortgage”).
2.3. The terms, covenants and
provisions of the Mortgage are hereby modified, amended and
restated in their entirety so that henceforth the terms, covenants
and provisions of the Mortgage shall read the same as the
paragraphs set forth herein, and the Mortgage, as so modified,
amended and restated, is hereby ratified and confirmed in all
respects by Mortgagor.
2.4. Mortgagor represents, warrants
and covenants that there are no offsets, counterclaims or defenses
against the Note or this Mortgage and that Mortgagor (and the
undersigned representative of Mortgagor) has full power, authority
and legal right to execute this Mortgage and to keep and observe
all of the terms of this Mortgage on Mortgagor’s part to be
observed and performed.
Section 3. Obligations
Secured .
This conveyance is made to secure the
following obligations (collectively, the
“Obligations”):
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(i) Payment
of the indebtedness of Mortgagor to Mortgagee evidenced by the
Note;
(ii) payment
by Mortgagor to Mortgagee of any and all sums expended or advanced
by Mortgagee pursuant to any term or provision of this
Mortgage;
(iii) performance
and observance by Mortgagor of each and every covenant, condition
and obligation contained in the Note, this Mortgage, the other
Security Instruments and any other document, instrument or
agreement now or hereafter given by Mortgagor as additional
security for the payment of the indebtedness hereby secured, or
otherwise executed in connection therewith;
(iv) payment
by Mortgagor to Mortgagee of any and all sums expended or advanced
by Mortgagee pursuant to any term or provision of any Hedging
Agreement entered into between Mortgagor and Mortgagee; and
(v) performance
and observance by Mortgagor of every condition and obligation
contained in any Hedging Agreement entered into between Mortgagor
and Mortgagee.
Section 4. Representations
and Warranties .
4.1. Mortgagor is duly organized,
validly existing and in good standing under the laws of the state
of its organization and is duly qualified to transact business in
the state in which the Premises is located;
4.2. Mortgagor has the requisite
power and authority (a) to own its properties and to carry on
its business as now being conducted and as contemplated under this
Mortgage and each Lease, (b) to place mortgages and liens upon
its assets and (c) to execute and deliver or cause to be
executed and delivered the Loan Documents and to perform its
obligations thereunder;
4.3. The execution and delivery of
the Loan Documents and the performance of the terms and conditions
thereof by Mortgagor, have been duly authorized by all requisite
action, and create the valid and binding obligations of Mortgagor,
enforceable in accordance with their respective terms;
4.4. Neither the execution, delivery
and performance of this Mortgage by Mortgagor, nor the execution,
delivery and performance, by Mortgagor or any other party (except
for Mortgagee), of any of the other Loan Documents or any and all
other documents, instruments and agreements required by Mortgagee
in connection with the Loan, including, without limitation, the
execution and delivery of any guaranty by the Guarantor, will
violate any provision of (a) law, (b) any order of any
court or other Governmental Authority, (c) Mortgagor’s
organizational documents or operating agreement, (d) any indenture,
agreement or other instrument to which Mortgagor or any Guarantor
is a party, or by which Mortgagor or any Guarantor is bound, or be
in conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation
or imposition of any lien, charge or encumbrance of any nature
whatsoever
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upon any
of the property or assets of Mortgagor or any Guarantor, other than
as provided herein and in the Security Instruments;
4.5. All financial data, reports and
other information prepared by or for the benefit of Mortgagor or
Guarantor and furnished Mortgagee in connection with the Loan are
accurate and complete and fairly present the financial position and
the results of operations for the periods indicated therein, and
there has been no material adverse change in the condition,
financial or otherwise, of Mortgagor or the Guarantor since the
dates of the most recent financial statements;
4.6. Neither Mortgagor, nor any
Guarantor, nor any corporation, partnership or other legal entity
in which Mortgagor or any Guarantor is a principal, is in default
under any of their respective material obligations and agreements
(including the payment of all federal, state and local taxes), to
the best of Mortgagor’s and Guarantor’s knowledge, no
condition or state of facts exists which with the giving of notice
or passage of time or both would constitute such a default, and
there is no action, suit or proceeding at law or in equity or by or
before any Governmental Authority now pending, or, to the knowledge
of Mortgagor or any Guarantor, threatened against or affecting
Mortgagor, any Guarantor, the Mortgaged Property or any properties
adjacent to the Mortgaged Property, which, if adversely determined,
would have a material adverse effect on the business, operations,
properties (including without limitation, the Mortgaged Property),
assets or condition, financial or otherwise, of Mortgagor or any
Guarantor;
4.7. To Mortgagor’s knowledge
and except as otherwise previously disclosed to Mortgagee in
writing, there is no default under and there exists no condition or
state of facts which, with the giving of notice or passage of time
or both, would constitute a default under any Lease;
4.8. To the best of Mortgagor’s
knowledge, the Mortgaged Property and the use thereof for the
Permitted Use does not violate (a) any building, zoning,
subdivision, land-use, health, sanitation, environmental protection
or other law, ordinance, rule or regulation promulgated by any
Governmental Authority or (b) any deed, plat or other
restriction of any kind applicable to the Mortgaged Property;
4.9. To the best of Mortgagor’s
knowledge, all utilities and services necessary for the operation
of the Mortgaged Property for the Permitted Use and in accordance
with each Lease, (a) are available at the boundary of the Premises
and are connected to the Improvements, (b) are operational and
(c) are of sufficient capacity to adequately service the
operation of the Improvements;
4.10. Except as may be set forth in
that certain Title Commitment dated the date hereof issued by
Commonwealth Land Title Insurance Company under Title Number
07NYW10958 (the “Title Commitment”), there are no party
wall agreements or easements across or affecting the Mortgaged
Property which have any adverse effect upon the operation of the
Mortgaged Property;
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4.11. To the best of
Mortgagor’s knowledge, the Improvements are not located in a
designated flood hazard area, as defined in the Flood Disaster
Protection Act of 1973 (P.L. 93-234), as amended;
4.12. There is unrestricted access
for the passage of motor vehicles to and from the Premises to and
from the public road upon which the Premises fronts and all
required curb cut or access permits (if any) have been obtained;
and
4.13. Neither the making of the Loan
nor Mortgagee’s acceptance of the Loan Documents will subject
Mortgagee to any claim for a brokerage commission, finder’s
fee or like charge by virtue of any action of Mortgagor.
Section 5. Mortgagor’s
Covenants . The Mortgagor covenants and agrees with Mortgagee
as follows:
5.1. Title .
5.1.1
Mortgagor has good and clear, record and marketable title in fee
simple to the Mortgaged Property subject only to the Permitted
Encumbrances; this Mortgage is and will remain a valid and
enforceable lien on the Mortgaged Property; Mortgagor has full
power and lawful authority to grant, sell and convey the Mortgaged
Property in the manner and form herein done; and Mortgagor will
preserve such title, will forever warrant and defend the same to
Mortgagee and will forever warrant and defend the validity and
priority of the lien hereof against the claims of all persons
whatsoever, except the holders of the Permitted Encumbrances.
5.1.2
Mortgagor agrees to deliver, within thirty (30) days after the
date hereof, an ALTA standard form of Mortgagee’s loan policy
of title insurance with respect to the Premises, in the amount of
the Note, insuring the lien of this Mortgage as a good and valid
first lien subject only to the Permitted Encumbrances, and
containing such endorsements and affirmative coverage as have been
requested by or on behalf of Mortgagee in writing prior to the
recording hereof or as Mortgagee otherwise reasonably may
require.
5.2. Payment and Performance of
Obligations .
5.2.1
Mortgagor shall pay all indebtedness hereby secured at the time or
times and in the manner provided herein, in the Note, or in any
other instrument secured hereby.
5.2.2
Mortgagor will perform and observe all the terms, provisions,
covenants and conditions imposed upon Mortgagor under each and
every of the Loan Documents, all at the time or times and in the
manner provided therein.
5.3. Insurance .
5.3.1
Mortgagor shall keep the Improvements continuously insured against
loss by fire and the risks covered under a so-called
“extended coverage endorsement”, flood, explosion of
boilers, heating apparatus and other pressure vessels, and such
other hazards,
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casualties and contingencies as Mortgagee from time to time
reasonably may require, in an amount equal to one hundred percent
(100%) of the replacement cost of the Improvements. The insurance
policy evidencing such coverage: (a) shall be endorsed with an
Agreed Amount Endorsement, (b) shall be endorsed with a Loss
of Rents Endorsement (or equivalent endorsement) for a twelve
(12) month period, and (c) shall contain a deductible
satisfactory to Mortgagee. The amount of such insurance coverage
shall be reviewed not less than annually and increased whenever
necessary so as to provide the required coverage.
5.3.2
Mortgagor shall continuously keep in full force and effect a policy
of public liability insurance and (if relevant) elevator insurance,
against claims for bodily injury, death or property damage
occurring upon, in or about the Mortgaged Property or any part
thereof in which the limits of liability shall not be less than One
Million Dollars (US$1,000,000) per occurrence and Two Million
Dollars (US$2,000,000) general aggregate, together with an umbrella
form liability policy in the amount of Five Million Dollars
(US$5,000,000), which shall be in addition to the limits above set
forth. Mortgagor agrees to increase the limits of such liability
insurance to such higher amounts as Mortgagee from time to time
reasonably may require.
5.3.3
All such insurance shall be evidenced by valid and enforceable
policies in form and substance satisfactory to Mortgagee. Without
limiting the generality of the foregoing: (a) all such
insurance policies shall contain an endorsement requiring thirty
(30) days written notice to Mortgagee prior to cancellation or
change in the coverage, scope or amount of any such policy or
policies, (b) all such insurance policies and certificates
thereof shall name Mortgagee, its successors and assigns, as
mortgagee, loss payee and additional insured, and (c) any and
all policies evidencing casualty insurance shall provide that any
and all loss shall be payable to Mortgagee and such loss shall be
payable to Mortgagee notwithstanding any act or omission of
Mortgagor which might otherwise result in cancellation or
forfeiture of said insurance.
5.3.4
Mortgagor shall deliver to Mortgagee evidence satisfactory to
Mortgagee of the issuance of renewal or replacement policies not
less than thirty (30) days prior to the expiration date of the
policy to be renewed or replaced, accompanied, if requested by
Mortgagee, by evidence satisfactory to Mortgagee that all premiums
payable with respect to such policies have been paid in full by
Mortgagor. In addition, Mortgagor shall provide such other
insurance as may be reasonably requested by Mortgagee from time to
time.
5.3.5
From time to time, upon the request of Mortgagee, Mortgagor shall
provide Mortgagee with the originals of all policies evidencing the
insurance coverage required under this Mortgage. In any event
Mortgagor shall furnish to Mortgagee (a) concurrently with the
execution of this Mortgage, a certificate of insurance or other
evidence of insurance satisfactory to Mortgagee evidencing that
Mortgagor has in full force and effect the insurance coverage
required hereunder, and (b) from time to time at the request
of Mortgagee, a certificate of insurance or other evidence of
insurance satisfactory to Mortgagee evidencing that Mortgagor has
in full force and effect the insurance coverage required
hereunder.
5.3.6
Mortgagor shall have the right of free choice in the selection of
the agent or insurer through or by which the insurance required
hereunder is to be placed; provided,
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however,
said insurer is authorized to write such insurance in the state in
which the Premises is located, has a licensed resident agent in
said state and has, at all times while this mortgage is in effect,
a general policyholder’s rating of A-VIII or better in
Best’s latest rating guide.
5.3.7
Mortgagee shall be, and is hereby, authorized and empowered, for
and in the name or names and on behalf of Mortgagor and/or
Mortgagee, and for the purposes hereinafter set forth, shall be and
is hereby made, constituted and appointed the true and lawful
attorney-in-fact of Mortgagor (with full power of substitution and
revocation), and in the sole and uncontrolled discretion of said
attorney, (a) to demand, adjust, sue for, settle, compromise
and collect any amounts due under such insurance polices in the
event of loss, and (b) to give releases for any and all
amounts received in settlement of loss under such policies;
provided, however, so long as no Default Condition exists,
Mortgagee shall not exercise such power of attorney unless and
until three (3) months have elapsed from the date of such loss
without settlement having been made. Unless the settlement of such
loss is in excess of the amount of the Obligations, no settlement
therefor shall be made without the prior written consent of
Mortgagee. The foregoing appointment, being coupled with an
interest, is irrevocable until the Obligations are paid and
otherwise satisfied in full.
5.3.8
(a) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Mortgagor shall
give prompt notice thereof to Mortgagee. Mortgagor hereby
authorizes and empowers Mortgagee, at Mortgagee’s option and
at Mortgagee’s sole discretion, as attorney-in-fact for
Mortgagor, to make proof of loss, to adjust and compromise any
claim under any insurance policy, to appear in and prosecute any
action arising from any policy, to collect and receive insurance
proceeds and to deduct therefrom Mortgagee’s expenses
incurred in the collection process, to endorse any checks, drafts
or other instruments representing any proceeds of such insurance,
whether payable by reason of loss thereunder or otherwise, and to
make any election required or permitted under any insurance policy
relating to repair or restoration; provided, however, so long as no
Default Condition exists, Mortgagee shall not exercise such power
of attorney unless and until three (3) months have elapsed
from the date of such loss without settlement having been made. So
long as no Default Condition exists, Mortgagee shall disburse any
Rents and Continuing Expenses received under any insurance policy
to Mortgagor. Mortgagee shall make the Net Proceeds available for
the repair and restoration of the Improvements, provided that
(i) no Default Condition shall exist, (ii) Mortgagor
shall proceed with the repair and restoration of the Improvements
as nearly as reasonably possible to the condition the Improvements
were in immediately prior to such fire or other casualty promptly
after the insurance claims are settled, (iii) no Lease shall
be terminated as a result of such fire, (iv) Mortgagee shall
be reasonably satisfied that upon the completion of such repair and
restoration the gross cash flow and the net cash flow of the
Mortgaged Property will be restored to a level at least equal to
the level the same were at prior to the date of such fire or other
casualty and (v) the estimated cost of repair, restoration,
rebuilding or replacement (hereinafter, collectively, the
“Cost to Repair”) does not exceed $500,000.00. If the
Cost to Repair is greater than $500,000.00 but does not exceed
$1,000,000.00, provided the conditions set forth in (i), (ii),
(iii) and (iv) above have been satisfied, Mortgagee shall
release so much of the Net Proceeds as may be required to pay for
the actual Cost to Repair directly to the Mortgagor in accordance
with the provisions of this Section 5.3.9. If the Cost to Repair is
greater than or equal to $1,000,000.00 or if the casualty occurs
within one hundred and eighty
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(180) days of the Maturity Date (as such term is defined in
the Note) the Mortgagee, in its sole and absolute discretion, may
either apply the proceeds of insurance to reduce the
Mortgagor’s Obligations or, provided the conditions set forth
in (i), (ii), (iii) and (iv) above have been satisfied,
release so much of the Net Proceeds as may be required to pay for
the actual Cost of the repair work to repair, restore, rebuild or
replace the Improvements (collectively, the “Repair
Work”) directly to the Mortgagor in accordance with the
provisions of this Section 5.3.9.
(b)
Upon satisfaction of the provisions of the preceding paragraph (a),
the Net Proceeds will be disbursed by Mortgagee to Mortgagor to pay
for the costs of the Repair Work. The Net Proceeds shall be held by
Mortgagee in escrow until expended in connection with the Repair
Work, it being agreed that any Net Proceeds so held by Mortgagee
may be commingled with the general funds of Mortgagee, shall bear
interest at such rate as reasonably determined by Mortgagee, and
shall constitute additional security for the payment of the
Obligations. The Net Proceeds shall be paid by Mortgagee to, or as
directed by, Mortgagor from time to time during the course of the
Repair Work upon satisfaction of the following conditions:
(i) all plans, specifications, costs estimates, contracts and
bonds, if any, for the Repair Work, have been obtained and are
satisfactory to Mortgagee in its commercially reasonable discretion
and (ii) Mortgagee has received satisfactory evidence that:
(x) all materials installed and work and labor performed
(except to the extent that they are to be paid for out of the
requested payment) in connection with the repair and restoration
have been paid for in full, (y) there exists no notices of
intention, mechanics or other liens and encumbrances on the
Mortgaged Property arising out of the Repair Work, and (z) the
balance of the Net Proceeds plus the balance of any deficiency
deposits made by Mortgagor pursuant to the provisions of this
paragraph hereinafter set forth shall be sufficient to pay in full
the balance of the cost of the Repair Work. The Repair Work shall
be done and completed by Mortgagor in an expeditious and diligent
fashion and in compliance with all applicable laws, rules and
regulations, and all plans and specifications required in
connection with the repair and restoration shall be subject to the
prior review and approval in all respects by an independent
inspecting engineer selected by Mortgagor and reasonably acceptable
to Mortgagee (the “Inspecting Engineer”). All costs and
expenses incurred by Mortgagee in connection with making the Net
Proceeds available for the Repair Work, including, without
limitation, counsel fees and disbursements and the Inspecting
Engineer’s fees incurred by Mortgagee, shall be paid by
Mortgagor. In no event shall Mortgagee be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to
the value of the work in place as part of the repair and
restoration, as certified by the Inspecting Engineer, minus 10% of
such costs (such 10% being hereinafter referred to as the
“Retainage”). Once fifty percent (50%) of the Repair
Work has been completed, the Retainage shall be reduced to 5%.
Mortgagee shall not be obligated to make disbursements of the Net
Proceeds more than once every thirty (30) days. If the Cost to
Repair does not exceed $500,000.00, only one disbursement of the
Net Proceeds shall be made by Mortgagee, which disbursement shall
be made upon certification by the Inspecting Engineer that the
Repair Work has been completed in accordance with the provisions of
this paragraph, and upon receipt by Mortgagee of evidence
satisfactory to Mortgagee that the costs of the repair and
restoration have been paid in full or will be paid in full out of
such disbursement. The Retainage shall not be released until the
Inspecting Engineer certifies that the repair and restoration have
been completed in accordance with the provisions of this paragraph,
and Mortgagee receives evidence satisfactory to Mortgagee that the
costs of the repair and restoration have been paid in full or will
be paid in full out of the
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Retainage. The excess, if any, of the Net Proceeds after the
completion of the Repair Work and the payment in full of all costs
incurred in connection therewith shall be applied by Mortgagee in
reduction of the Obligations in such priority and proportions as
Mortgagee in its commercially reasonable discretion shall deem
proper. If at any time the Net Proceeds, or the undisbursed balance
thereof, shall not, in the commercially reasonable opinion of
Mortgagee, be sufficient to pay in full the balance of the costs
which will be incurred in connection with the completion of the
Repair Work, Mortgagor shall deposit the deficiency with Mortgagee
before any further disbursement of the Net Proceeds shall be made,
which deficiency deposit may be commingled with the general funds
of Mortgagee, shall bear interest at such rate as reasonably
determined by Mortgagee and shall be disbursed for costs actually
incurred in connection with the Repair Work on the same conditions
applicable to the Net Proceeds. Any such deficiency deposit, until
disbursed pursuant to this paragraph, shall constitute additional
security for the payment of the Obligations. The balance, if any,
of any such deficiency deposit remaining after the Inspecting
Engineer certifies that the Repair Work has been completed in
accordance with the provisions of this paragraph and the receipt by
Mortgagee of evidence satisfactory to Mortgagee that all costs
incurred in connection with the Repair Work have been paid in full
shall be returned by Mortgagee to Mortgagor. All costs of the
Repair Work in excess of the Net Proceeds shall be paid for by
Mortgagor. If Mortgagee shall receive and retain such Net Proceeds,
the lien of this Mortgage shall be reduced only by the amount
thereof received and retained by Mortgagee and actually applied by
Mortgagee in reduction of the Obligations. Mortgagee shall not be
obligated to see to the proper application of insurance money paid
over to Mortgagor, and if Mortgagee receives and retains any Net
Proceeds, the lien of this Mortgage shall be affected only by a
reduction of the amount of said lien by the amount of such
insurance money so received and retained by Mortgagee.
Nevertheless, if prior to the receipt by Mortgagee of any insurance
proceeds, the Mortgaged Property shall have been sold on
foreclosure of this Mortgage, as between Mortgagor and Mortgagee,
Mortgagee shall have the right to receive said insurance proceeds,
and Mortgagor shall pay over to Mortgagee said insurance proceeds
as, if and when Mortgagor receives same, to the extent of
(i) any deficiency found to be due upon such sale, with legal
interest thereon, whether or not a deficiency judgment on this
Mortgage shall have been sought or recovered, and (ii) of the
attorneys’ fees, costs and disbursements incurred by
Mortgagee in connection with the collection of such insurance
proceeds. Mortgagor will not permit any condition to exist on the
Mortgaged Property that would wholly or partially invalidate the
insurance policies.
5.3.9
If Mortgagee shall by any manner acquire title to the Mortgaged
Property, it shall thereupon become the sole and absolute owner of
all insurance policies held by or required hereunder to be
delivered to Mortgagee, with the sole right to collect and retain
all unearned premiums and dividends thereon, and Mortgagor shall
only be entitled to a credit, in reduction of the then outstanding
indebtedness secured hereby, in the amount of the short rate
cancellation refund. Without limiting the generality of the
foregoing, in the event of foreclosure of this Mortgage or any
transfer of title to the Mortgaged Property to a third-party
purchaser pursuant to the power(s) in this Mortgage granted
Mortgagee, Mortgagee shall be and is hereby authorized and
empowered, for and in the name or names and on behalf of Mortgagor
and/or Mortgagee, and for the purposes hereinafter set forth, shall
be and is hereby made, constituted and appointed the true and
lawful attorney-in-fact of Mortgagor (with full power of
substitution and revocation) in the name place and stead of
Mortgagor, and in the sole and uncontrolled
15
discretion of said attorney, to surrender up the policies of
insurance covering the Mortgaged Property and any part thereof and
to collect any amounts due thereunder or, at its option, to
transfer all right, title and interest in and to said policies and
the proceeds thereof to any purchaser of the Mortgaged Property or
any part thereof without obligation to account therefor to any
person claiming title to the Mortgaged Property; provided ,
however , that any amounts received by Mortgagee under said
policies by way of refunds, dividends or otherwise, as aforesaid,
shall be applied to the payment of the Obligations, and any surplus
shall be paid over as a surplus on foreclosure. The foregoing
appointment being coupled with an interest is irrevocable. Upon the
occurrence of an Event of Default, Mortgagee shall have no
obligation to disburse any funds to Mortgagor and all monies held
by Mortgagee may be applied toward satisfaction of the Obligations.
Notwitstanding the foregoing, this Section 5.39 shall not
apply with respect to any blanket insurance policies of Mortgagor
which do not relate solely to the Mortgaged Property. The
provisions of Subsection 4 of Section 254 of the Real Property
Law of New York covering the insurance of buildings against loss by
fire shall not apply to the terms of this Mortgage.
5.3.10
Mortgagee consents to Mortgagor providing the insurance coverage
required under this Section 5.3 by causing one or more tenants
leasing the entire or a portion of the Mortgaged Property to
provide such insurance in the same form and amounts as set forth in
this Section 5.3.
5.4. Payment of Taxes and
Liens .
5.4.1
Mortgagor shall pay, when due, all Impositions and shall furnish to
Mortgagee, promptly after payment of the same, certificates,
receipts or other evidence reasonably satisfactory to Mortgagee of
such payment; provided, however, Mortgagor shall not be required to
pay and discharge any such Imposition, if and so long as
(a) the validity thereof shall be contested by Mortgagor with
diligence and in good faith by appropriate proceedings and
(b) Mortgagor shall have deposited with Mortgagee a sum equal
to the amount being so contested and any additional charge, penalty
or expense which may be incurred as a result of such contest; and
provided further, however, that any such Imposition and any such
additional charge, penalty or expense shall be paid in full before
the Mortgaged Property, or any part thereof, shall be seized and
sold in satisfaction thereof.
5.4.2
Mortgagor shall pay, when the same shall become due and payable,
all claims and demands of mechanics, materialmen, laborers and
others which, if unpaid, might result in or permit the creation of
a lien on the Mortgaged Property or any part thereof, provided,
however, Mortgagor shall not be required to pay any such claim or
demand, if and so long as (a) the validity thereof shall be
contested by Mortgagor with diligence and in good faith by
appropriate proceedings and (b) in the event that such claim or
demand results in a lien or notice of record against the Mortgaged
Property or any part thereof, Mortgagor shall have bonded or
otherwise caused such lien to be removed or discharged.
5.4.3
Mortgagor shall pay to Mortgagee, within thirty (30) days
after Mortgagee’s demand, an amount equal to any and all
taxes, assessments or charges of whatever nature which may at any
time be assessed against Mortgagee with respect to the Note or this
Mortgage or its ownership or holding thereof, whether under
statutes now or hereafter in effect.
16
In the
event any such tax, assessment or charge is not or, under
applicable law, cannot be so paid by Mortgagor, at the option of
Mortgagee, the Obligations shall become immediately due and
payable.
5.5. Insurance and Tax
Deposits .
Mortgagee, at any time if an Event of
Default has occurred and is continuing or if Mortgagor has failed
to pay the Impositions for the immediately preceding due date, upon
ten (10) days notice to Mortgagor, may require Mortgagor to
pay to Mortgagee, on the first day of each calendar month, a sum
equal to (a) one-twelfth (1/12) of the Impositions and
(b) one-twelfth (1/12) of the annual premiums for the
insurance required hereunder to be maintained on the Mortgaged
Property, the respective amounts of such Impositions and premiums
to be reasonably estimated from time to time by Mortgagee.
Mortgagee shall apply the Deposited Funds to the payment of such
Impositions and premiums and shall render an annual accounting to
Mortgagor of all disbursements of the Deposited Funds. Although
each such monthly payment of Deposited Funds are to be in a lump
sum, each component thereof shall be deemed to be held separately
by Mortgagor for, and shall be applied only to, the particular item
for which payment was made by Mortgagor, unless Mortgagee, in its
discretion, elects otherwise. If at any time Mortgagee estimates
that there shall or will not be on deposit with it, at least one
(1) month prior to the due date (a) of any item
constituting part of the Impositions and/or (b) of any annual
insurance premium, a sum sufficient for the payment of such item
and/or premium in full, Mortgagor, upon demand, shall pay the
amount of such deficiency to Mortgagee notwithstanding that there
may already be deposited with Mortgagee sums for the payment of
other items which are not yet due. If the amount of the Deposited
Funds shall exceed the amount necessary to pay such Impositions and
premiums for the then current year, such excess shall be credited
against future monthly deposits required hereunder. Unless
otherwise required by applicable law, no interest shall be paid on
the Deposited Funds, and the Deposited Funds may be commingled with
Mortgagee’s general funds. Upon payment and other
satisfaction in full of the Obligations, any excess Deposited Funds
shall be refunded to Mortgagor. Upon the occurrence of any Event of
Default, Mortgagee may apply against the Obligations, in such
manner as Mortgagee may determine, any or all of the Deposited
Funds then held by Mortgagee.
5.6. Maintenance and
Inspections .
5.6.1
Mortgagor shall at all times keep and maintain the Mortgaged
Property and each part thereof in sound condition and in a
first-class state of decoration and repair.
5.6.2
Mortgagor shall not: permit any strip or waste of the Mortgaged
Property; permit the violation of any law, ordinance or rule or
regulation of any Governmental Authority affecting the same or the
use thereof, permit any conditions to exist which would wholly or
partially invalidate any insurance on the Mortgaged Property; or do
or permit anything to be done to the Mortgaged Property or any part
thereof that might materially diminish the value thereof.
5.6.3
Mortgagor shall permit Mortgagee, its officers, agents and
representatives to enter upon the Mortgaged Property at all
reasonable times to view and inspect the same.
17
5.6.4
Mortgagor, within thirty (30) days after demand by Mortgagee
(or immediately upon demand in cases which Mortgagee deems to be an
emergency), shall make such repairs, replacements, renewals, or
additions, or perform such items of maintenance to the Mortgaged
Property or any part thereof as Mortgagee reasonably may require in
order to maintain the Mortgaged Property at the standards required
by this Section.
5.7. Alterations and Additions
.
Mortgagor shall not remove or
demolish any Improvements, or make any material alteration or
addition to the Improvements (each an “Alteration”),
including, without limitation, changes to the character, design,
structure or size of the Improvements, without the prior written
consent of the Mortgagee. Notwithstanding the foregoing, Mortgagor
shall have the right to make any Alteration with respect to the
Improvements without Mortgagee’s prior written consent
provided the cost of such Alteration
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