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Mortgage Security Agreement And Assignment Of Leases And Rents Form. This is a New York form and can be use in Real Estate Statewide.
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MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS (1999)
This form was prepared by the Committee on Real Property Law of the Association of the Bar of the
City of New York. To view a commentary on this form, including instructions for its use, visit the Real
Estate Law page at www.abcny.org.
MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
Made By: _________________________, as Mortgagor
To: ______________________________, as Mortgagee
Dated:
Location:
Block:
Lot:
Street Address:
RECORD AND RETURN TO:
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Table of Contents
Page
MORTGAGE OF THE MORTGAGED PROPERTY ................................................. 1
COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES...... 4
1.
Payment of Debt...................................................................................................... 4
2.
Warranty of Title..................................................................................................... 4
3.
Insurance. ................................................................................................................ 5
4.
Payment of Taxes, etc. ............................................................................................ 7
5.
Escrow Fund............................................................................................................ 7
6.
Permitted Contests................................................................................................... 7
7.
Condemnation. ........................................................................................................ 8
8.
Assignment of Leases and Rents............................................................................. 9
9.
Maintenance of the Mortgaged Property............................................................... 10
10.
Environmental Provisions. .................................................................................... 11
11.
Estoppel Certificates. ............................................................................................ 14
12.
Transfer or Encumbrance of the Mortgaged Property. ......................................... 14
13.
Notice. ................................................................................................................... 15
14.
Sale of Mortgaged Property. ................................................................................. 16
15.
Changes in Laws Regarding Taxation. ................................................................. 16
16.
No Credits on Account of the Debt....................................................................... 16
17.
Offsets, Counterclaims and Defenses.................................................................... 16
18.
Other Security for the Debt. .................................................................................. 17
19.
Documentary Stamps. ........................................................................................... 17
20.
Right of Entry........................................................................................................ 17
21.
Books and Records................................................................................................ 17
22.
Performance of Other Agreements........................................................................ 18
23.
Events of Default................................................................................................... 18
24.
Right to Cure Defaults........................................................................................... 21
25.
Appointment of Receiver. ..................................................................................... 22
26.
Non-Waiver........................................................................................................... 22
27.
Liability. ................................................................................................................ 23
28.
Choice of Law/Construction. ................................................................................ 23
29.
Security Agreement............................................................................................... 23
30.
Splitting of Lien. ................................................................................................... 24
31.
Further Acts, etc. ................................................................................................... 25
32.
Headings, etc. ........................................................................................................ 25
33.
Filing of Mortgage, etc.......................................................................................... 25
34.
Usury Laws. .......................................................................................................... 26
35.
Sole Discretion of Mortgagee. .............................................................................. 26
36.
Reasonableness...................................................................................................... 26
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37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
Recovery of Sums Required To Be Paid............................................................... 26
Actions and Proceedings. ...................................................................................... 27
Duplicate Originals. .............................................................................................. 27
Certain Definitions. ............................................................................................... 27
Waiver of Notice. .................................................................................................. 27
No Oral Change..................................................................................................... 28
Absolute and Unconditional Obligation................................................................ 28
Trust Fund. ............................................................................................................ 29
Non-Residential Property...................................................................................... 29
Foreclosure by Power of Sale................................................................................ 29
Waiver of Trial by Jury. ........................................................................................ 29
Waiver of Statutory Rights.................................................................................... 29
Brokerage. ............................................................................................................. 30
Indemnity. ............................................................................................................. 30
Enforceability. ....................................................................................................... 31
Relationship........................................................................................................... 31
Condominium Obligations. ................................................................................... 31
The Mortgaged Lease............................................................................................ 32
New Mortgaged Lease with Mortgagee. ............................................................... 35
No Merger of Fee and Leasehold Estates.............................................................. 35
Consolidation. ....................................................................................................... 36
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Index of Defined Terms
Page
Bankruptcy Code ................................................................................................................ 2
Condominium ................................................................................................................... 31
Condominium Association ............................................................................................... 31
Condominium Documents ............................................................................................... 31
Debt..................................................................................................................................... 1
Deceased ........................................................................................................................... 14
Default Rate ..................................................................................................................... 22
Environmental Requirements ........................................................................................ 11
Equipment.......................................................................................................................... 2
Escrow Fund ...................................................................................................................... 7
Governmental Authority ................................................................................................ 11
Guarantor ........................................................................................................................ 19
Guaranty .......................................................................................................................... 19
Hazardous Material ........................................................................................................ 11
Improvements .................................................................................................................... 2
insurance requirements .................................................................................................... 8
Leases.................................................................................................................................. 3
legal requirements ............................................................................................................. 8
Loan Documents.............................................................................................................. 28
Mortgage ............................................................................................................................ 1
Mortgaged Lease ................................................................................................................ 1
Mortgaged Property.......................................................................................................... 1
Mortgagee .......................................................................................................................... 1
Mortgagor .......................................................................................................................... 1
Note..................................................................................................................................... 1
Note Modification Agreement.......................................................................................... 37
Policies ................................................................................................................................ 5
Premises.............................................................................................................................. 1
Prior Mortgage ................................................................................................................. 36
Prior Note ......................................................................................................................... 36
Rents ................................................................................................................................... 3
Taxes................................................................................................................................... 7
Title Policy ......................................................................................................................... 4
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THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF
LEASES AND RENTS (the “Mortgage”) made the _____ day of ______________,
______,
between
________________________________________,
a
_______________________________________________ having an office at
____________________________________________________________________ (the
“Mortgagor”),
and
______________________________________,
a
_________________________________________________ having an office at
____________________________________________________________________ (the
“Mortgagee”).
W I T N E S S E T H:
WHEREAS the Mortgagor is
the owner of a fee estate in the premises described in Exhibit A attached
hereto (the “Premises”);1
the owner of a leasehold estate in the premises described in Exhibit A
attached hereto (the “Premises”) under and pursuant to the provisions of
the lease described in Exhibit A-1 attached hereto (the “Mortgaged
Lease”);2
MORTGAGE OF THE MORTGAGED PROPERTY
NOW THEREFORE, to secure the payment of an indebtedness in the principal
sum of _____________________________________ and _____/100 Dollars
($____________), lawful money of the United States of America, to be paid with interest
(said indebtedness, interest and all other sums which may or shall become due hereunder
or secured hereby, collectively, the “Debt”) according to a certain Note dated the date
hereof given by the Mortgagor to the Mortgagee (the “Note”), the Mortgagor hereby
mortgages to the Mortgagee, and grants the Mortgagee a security interest in, all right, title
and interest of the Mortgagor now owned, or hereafter acquired, in and to the following
property, rights and interests (such property, rights and interests, collectively, the
“Mortgaged Property”):
(a)
the Premises;3
(a)(1) the Mortgaged Lease and the leasehold estate created thereunder;
(2) all modifications, extensions and renewals of the Mortgaged Lease and all
1
2
3
For leasehold mortgage, strike this subparagraph.
For fee mortgage, strike this subparagraph.
For leasehold mortgage, strike this paragraph (a).
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credits, deposits, options, purchase options, privileges and rights of the
Mortgagor under the Mortgaged Lease, including, but not limited to, the right, if
any, to renew or extend the Mortgaged Lease for a succeeding term or terms, or
to acquire fee title to or other interest in all or any portion of the Premises or the
Improvements (hereinafter defined); and (3) all of the Mortgagor’s rights and
remedies at any time arising under or pursuant to Section 365(h) of the
Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), including,
without limitation, all of the Mortgagor’s right thereunder to remain in
possession of the Premises and the Improvements;4
(b)
all buildings and improvements now or hereafter located on the
Premises (the “Improvements”);
(c)
all of the estate, right, title, claim or demand of any nature
whatsoever of the Mortgagor, either in law or in equity, in possession or
expectancy, in and to the Mortgaged Property or any part thereof;
(d)
all easements, rights-of-way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, liberties, tenements, hereditaments, and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Mortgaged Property (including, without limitation, any and all
development rights, air rights or similar or comparable rights of any nature
whatsoever now or hereafter appurtenant to the Premises or now or hereafter
transferred to the Premises) and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Premises to the center
line thereof;
(e)
all machinery, apparatus, equipment, fittings, fixtures and other
property of every kind and nature whatsoever and all additions thereto and
renewals and replacements thereof, and all substitutions therefor now owned or
hereafter acquired by the Mortgagor, or in which the Mortgagor has or shall have
an interest, now or hereafter located upon or in, or attached to, any portion of the
Mortgaged Property or appurtenances thereto, and used or usable in connection
with the present or future operation and occupancy of the Mortgaged Property and
all building equipment, materials and supplies of any nature whatsoever owned by
the Mortgagor, or in which the Mortgagor has or shall have an interest, now or
hereafter located upon the Mortgaged Property and whether stored at the
Mortgaged Property or off-site if used in connection with such operation and
occupancy (collectively, the “Equipment”), and the right, title and interest of the
Mortgagor in and to any of the Equipment which may be subject to any security
4
For fee mortgage, strike this paragraph (a).
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agreements (as defined in the Uniform Commercial Code of New York), superior
in lien to lien of this Mortgage and all proceeds and products of any of the above;
(f)
all awards or payments, including interest thereon, and the right to
receive the same, which may be made with respect to the Mortgaged Property,
whether from the exercise of the right of eminent domain (including any transfer
made in lieu of the exercise of said right), or for any other injury to or decrease in
the value of the Mortgaged Property;
(g)
all leases and other agreements (other than the Mortgaged Lease)5
affecting the use or occupancy of the Mortgaged Property now or hereafter
entered into (the “Leases”) and the rents, royalties, issues and profits of the
Mortgaged Property (the “Rents”;
(h)
all right, title and interest of the Mortgagor in and to (i) all
contracts from time to time executed by the Mortgagor or any manager or agent
on its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Mortgaged Property or any part
thereof and all agreements relating to the purchase or lease of any portion of the
Mortgaged Property or any property which is adjacent or peripheral to the
Mortgaged Property, together with the right to exercise such options and all leases
of Equipment, (ii) all consents, licenses, building permits, certificates of
occupancy and other governmental approvals relating to construction, completion,
occupancy, use or operation of the Mortgaged Property or any part thereof, and
(iii) all drawings, plans, specifications and similar or related items relating to the
Mortgaged Property;
(i)
all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of the
Mortgaged Property or any part thereof; all general intangibles related to the
operation of the Mortgaged Property now existing or hereafter arising;
(k)
all proceeds, both cash and non-cash, of the foregoing;
(l)
all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the right
to receive and apply the proceeds of any insurance, judgments, or settlements
made in lieu thereof, for damage to the Mortgaged Property; and
(m)
all refunds, rebates or credits in connection with any reduction in
real estate taxes and assessments against the Mortgaged Property as a result of tax
certiorari or other proceedings for the reduction of such taxes or assessments.
5
For fee mortgage, strike this parenthetical phrase.
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TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the proper use and benefit of the Mortgagee, and the successors and assigns
of the Mortgagee, forever.
COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES
AND the Mortgagor covenants and agrees with and represents and warrants to the
Mortgagee as follows:
1.
Payment of Debt.
The Mortgagor will pay the Debt at the time and in the manner provided
for its payment in the Note and in this Mortgage.
2.
Warranty of Title.
(a)
Subject only to those exceptions to title specifically set forth in the
title policy issued or to be issued by ___________________ to the Mortgagee (the “Title
Policy” and insuring the lien of this Mortgage, the Mortgagor represents and warrants to
the Mortgagee that the Mortgagor possesses unencumbered fee simple/leasehold6 estate
in the Premises and owns the Improvements, the Equipment and the balance of the
Mortgaged Property free and clear of all liens, encumbrances and charges. The
Mortgagor shall forever warrant, defend and preserve such title and priority of the lien of
this Mortgage against claims of all persons whomsoever. The Mortgagor represents and
warrants that (i) the Mortgagor is now, and after giving effect to this Mortgage, will be in
a solvent condition, (ii) the execution and delivery of this Mortgage by the Mortgagor
does not constitute a “fraudulent conveyance” within the meaning of Title 11 of the
United States Code as now constituted or under any other applicable statute, and (iii) no
bankruptcy or insolvency proceedings are pending or contemplated by or against the
Mortgagor. In addition, the Mortgagor represents and warrants that (i) the Mortgaged
Lease is in full force and effect and has not been modified in any manner whatsoever, (ii)
there are no defaults under the Mortgaged Lease and no event has occurred, which but
for the passage of time, or notice, or both, would constitute a default under the
Mortgaged Lease, (iii) all rents, additional rents and other sums due and payable under
the Mortgaged Lease have been paid in full, and (iv) no action has commenced and no
notice has been given or received for the purpose of terminating the Mortgaged Lease.7
(b)
The Mortgagor additionally represents and warrants that: (i) it has
full power, authority and legal right to execute this Mortgage and to mortgage the
Mortgaged Property pursuant to the terms hereof and to keep and observe all of the terms
of this Mortgage on the Mortgagor’s part to be performed and all such actions have been
duly authorized by all necessary proceedings on its part, (ii) if the Mortgagor is a
6
7
Strike inapplicable term.
For fee mortgage, strike this italicized sentence.
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corporation, partnership or limited liability company, the Mortgagor is duly organized
and validly existing under applicable law and all necessary action has been taken under
the Borrower’s organizational documents and applicable law to authorize the execution
and delivery of this Mortgage and the performance of Mortgagors obligations thereunder
and this Mortgage has been duly executed by the person(s) executing same on behalf of
the Mortgagor.
3.
Insurance.
The Mortgagor (i) will keep the Improvements and the Equipment insured
against loss or damage by fire and standard extended coverage perils (by means of an “all
risk” policy with an extended coverage endorsement, failure of a boiler and other
machinery and equipment, if generally available) and such other hazards as the
Mortgagee shall from time to time require in amounts (including applicable deductibles)
approved by the Mortgagee, which amounts shall in no event be less than 100% of the
full replacement value of the Improvements and the Equipment without deduction for
depreciation, but inclusive of footings and foundations, and shall be sufficient to meet all
applicable co-insurance requirements, (ii) will maintain rental loss or business
interruption insurance in an amount sufficient to cover any loss of income from the
Mortgaged Property for a period of not less than twenty-four (24) months, (iii) will
maintain (A) commercial general liability insurance in an amount not less than
$______________ per occurrence and $______________ in the aggregate, (B)
commercial automobile liability insurance with a limit of not less than $______________
combined single limit, endorsed to cover owned, hired and non-owned automobiles, and
(C) worker’s compensation insurance covering all of the Mortgagor’s employees, if any,
situated at the Premises, and (iv) will maintain such other forms of insurance coverage
with respect to the Mortgaged Property as the Mortgagee shall from time to time require
in amounts approved by the Mortgagee. All policies of insurance (the “Policies”) shall
be issued by insurers in a financial size category of not less than X and having a
minimum general policy holders’ rating of “A” and financial class VII per the latest
rating publication of Property and Casualty Insurers by A.M. Best Company and who are
lawfully doing business in New York and are otherwise acceptable in all respects to the
Mortgagee. All Policies shall contain the standard New York mortgagee noncontribution clause endorsement or an equivalent endorsement satisfactory to the
Mortgagee naming the Mortgagee as the person to which all payments made by the
insurer thereunder shall be paid, other than the Policies referred to in clause (iii) above,
and the policy referred to in clause (iii)(A) above shall name the Mortgagee as an
additional insured, and shall otherwise be in form and substance satisfactory in all
respects to the Mortgagee.
Nothing contained in this Section shall prevent the Mortgagor from
obtaining the required insurance under a policy or policies of blanket insurance which
may cover the Premises and other property not subject to the lien of this Mortgage,
provided that any such policy of blanket insurance shall: (i) specify therein, or the
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Mortgagor shall furnish the Mortgagee with a written statement from the insurers under
such policies (which shall bind such insurers) so specifying, the amount of the total
insurance separately allocated to the Premises and stating that such coverage is applicable
only to the Premises, which amount shall not be less than the amount which the
Mortgagor is required to carry under this Section; and (ii) in all other respects comply
with the other provisions of this Section.
The Mortgagor shall pay the premiums for the Policies as the same
become due and payable. At the request of the Mortgagee, the Mortgagor will deliver the
Policies to the Mortgagee. Not later than ten (10) days prior to the expiration date of
each of the Policies, the Mortgagor will deliver to the Mortgagee a renewal policy or
policies marked “premium paid” or accompanied by other evidence of payment of
premium satisfactory to the Mortgagee. If at any time the Mortgagee is not in receipt of
written evidence that all insurance required hereunder is in force and effect, the
Mortgagee shall have the right without notice to the Mortgagor to take such action as the
Mortgagee deems necessary to protect its interest in the Mortgaged Property, including,
without limitation, the obtaining of such insurance coverage as the Mortgagee in its sole
discretion deems appropriate, and all expenses incurred by the Mortgagee in connection
with such action or in obtaining such insurance and keeping it in effect shall be secured
by this Mortgage and paid by the Mortgagor to the Mortgagee upon demand. The
Mortgagor shall at all times comply with and shall cause the Improvements and
Equipment and the use, occupancy, operation, maintenance, alteration, repair and
restoration thereof to comply with the terms, conditions, stipulations and requirements of
the Policies. If the Premises, or any portion of the Improvements or the Equipment, is
located in a Federally designated “special flood hazard area,” in addition to the other
Policies required under this paragraph, a flood insurance policy shall be delivered by the
Mortgagor to the Mortgagee. If no portion of the Premises is located in a Federally
designated “special flood hazard area” such fact shall be substantiated by a certificate in
form satisfactory to the Mortgagee from a licensed surveyor, appraiser or professional
engineer or other qualified person. If the Mortgaged Property shall be damaged or
destroyed, in whole or in part, by fire or other property hazard or casualty, the Mortgagor
shall give prompt notice thereof to the Mortgagee. Sums paid to the Mortgagee by any
insurer may be retained and applied by the Mortgagee toward payment of the Debt
whether or not then due and payable in such order, priority and proportions as the
Mortgagee in its discretion shall deem proper or, at the discretion of the Mortgagee, the
same may be paid, either in whole or in part, to the Mortgagor for such purposes and
upon such terms as the Mortgagee shall designate. If the Mortgagee shall receive and
retain such insurance proceeds, the lien of this Mortgage shall be reduced only by the
amount thereof received and retained by the Mortgagee and actually applied by the
Mortgagee in reduction of the Debt. The provisions contained herein with respect to
insurance shall apply notwithstanding any contrary provisions of subdivision 4 of Section
254 of the Real Property Law of New York.
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4.
Payment of Taxes, etc.
The Mortgagor shall pay all taxes, assessments, water rates, sewer rents
and other charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Premises, now or hereafter levied or assessed against the
Mortgaged Property, and all common charges, common area maintenance charges, dues
and assessments imposed by any condominium association, all amounts due in respect of
any business improvement district or like organization, and all insurance premiums (the
“Taxes”) prior to the date upon which any fine, penalty, interest or cost may be added
thereto or imposed by law for the nonpayment thereof. The Mortgagor shall deliver to
the Mortgagee, upon request, receipted bills, canceled checks and other evidence
satisfactory to the Mortgagee evidencing the payment of the Taxes prior to the date upon
which any fine, penalty, interest or cost may be added thereto or imposed by law for the
nonpayment thereof.
5.
Escrow Fund.
The Mortgagor will, at the option of the Mortgagee, pay to the Mortgagee
on the first day of each calendar month one-twelfth of an amount (the “Escrow Fund”)
which would be sufficient to pay the Taxes payable, or estimated by the Mortgagee to be
payable, during the ensuing twelve (12) months. The Mortgagee will apply the Escrow
Fund to the payment of Taxes which are required to be paid by the Mortgagor pursuant to
the provisions of this Mortgage. If the amount of the Escrow Fund shall exceed the
amount of the Taxes payable by the Mortgagor pursuant to the provisions of this
Mortgage, the Mortgagee shall, in its discretion, (a) return any excess to the Mortgagor,
or (b) credit such excess against future payments to be made to the Escrow Fund. In
allocating such excess, the Mortgagee may deal with the person shown on the records of
the Mortgagee to be the owner of the Mortgaged Property. If the Escrow Fund is not
sufficient to pay the Taxes, as the same become payable, the Mortgagor shall pay to the
Mortgagee, upon request, an amount which the Mortgagee shall estimate as sufficient to
make up the deficiency. Until expended or applied as above provided, any amounts in
the Escrow Fund may be commingled with the general funds of the Mortgagee and shall
constitute additional security for the Debt and shall not bear interest.
6.
Permitted Contests.
After prior written notice to the Mortgagee, the Mortgagor at its expense
may contest, or cause to be contested, by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in whole or in
part, of any taxes, any legal requirement (as hereinafter defined) or insurance requirement
(as hereinafter defined) with respect to the Premises, provided that (a) in the case of any
unpaid taxes, such proceedings shall suspend the collection thereof from the Mortgagor,
the Mortgagee, the Premises and any rent or other income therefrom and shall not
interfere with the payment of any such rent or income, (b) neither the Premises nor any
rent or other income therefrom nor any part thereof or interest therein would be in any
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danger of being sold, forfeited, lost or interfered with, (c) in the case of a legal
requirement, neither the Mortgagor nor the Mortgagee would be in any danger of any
criminal liability or, with respect to the Mortgagee, any civil liability, for failure to
comply therewith, (d) the Mortgagor shall have furnished such security, if any, as may be
required in the proceedings or as may be reasonably requested by the Mortgagee, (e) the
nonpayment of the whole or any part of any taxes, assessment or charge will not result in
the delivery of a tax deed to the Premises or any part thereof because of such
nonpayment, (f) the payment of any sums required to be paid under this Mortgage (other
than any unpaid taxes or charge at the time being contested in accordance with this
Article 6) shall not be interfered with or otherwise affected, and (g) in the case of any
insurance requirement, the failure of the Mortgagor to comply therewith shall not affect
the validity of any insurance required to be maintained by the Mortgagor under this
Mortgage. As used herein, (i) the term “insurance requirements” shall mean all
provisions of any insurance policy covering or applicable to the Premises or any part
thereof, all requirements of the issuer of any such policy, and all orders, rules, regulations
and other requirements of the National Board of Fire Underwriters (or any other body
exercising similar functions) applicable to or affecting the Premises or any part thereof or
any use or condition of the Premises or any part thereof and (ii) the term “legal
requirements” shall mean all laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and
requirements of all government departments, commissions, boards, courts, authorities,
agencies, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which
now or at any time hereafter may be applicable to the Premises or any part thereof
(whether to the use, operations, ownership or otherwise), or any of the adjoining
sidewalks, curbs, vaults and vault space, if any, streets or ways, or any use or condition of
the Premises or any part thereof.
7.
Condemnation.
Notwithstanding any taking by any public or quasi-public authority
through eminent domain or otherwise, the Mortgagor shall continue to pay the Debt at the
time and in the manner provided for its payment in the Note and this Mortgage and the
Debt shall not be reduced until any award or payment therefor shall have been actually
received and applied by the Mortgagee to the discharge of the Debt. The Mortgagee may
apply the entire amount of any such award or payment to the discharge of the Debt
whether or not then due and payable in such order, priority and proportions as the
Mortgagee in its discretion shall deem proper. If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by the Mortgagee of such award or payment,
the Mortgagee shall have the right, whether or not a deficiency judgment on the Note
shall have been sought, recovered or denied, to receive such award or payment, or a
portion thereof sufficient to pay the Debt, whichever is less. The Mortgagor shall file and
prosecute its claim or claims for any such award or payment in good faith and with due
diligence and cause the same to be collected and paid over to the Mortgagee. The
Mortgagor hereby irrevocably authorizes and empowers the Mortgagee, in the name of
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the Mortgagor or otherwise, to collect and receive any such award or payment and to file
and prosecute such claim or claims. Although it is hereby expressly agreed that the same
shall not be necessary in any event, the Mortgagor shall, upon demand of the Mortgagee,
make, execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning any such award or payment to the Mortgagee, free and clear of
any encumbrances of any kind or nature whatsoever.
8.
Assignment of Leases and Rents.
(a)
As of the date of this Mortgage, as security in addition to the
property described in this Mortgage, the Mortgagor hereby absolutely and
unconditionally assigns to the Mortgagee all of its right, title and interest in and to all
Leases and any extensions, modifications and renewals thereof together with any and all
guarantees of lessee’s performance thereunder and all credits, deposits, claims, options,
powers, benefits, privileges, and other rights arising thereunder, whether now in existence
or which may hereafter come into existence during the term of this Mortgage, or any
extension hereof, covering the Mortgaged Property, or any part thereof (but without an
assumption by the Mortgagee of liabilities of the Mortgagor under any such Leases by
virtue of this assignment), and the Mortgagor hereby absolutely and unconditionally
assigns to the Mortgagee the Rents and other benefits of the Mortgaged Property now or
hereafter arising from the Leases to be applied by the Mortgagee in payment of the Debt,
and of all other sums payable under this Mortgage. Notwithstanding the foregoing, so
long as no default shall exist and be continuing hereunder, the Mortgagor shall have a
license to collect the Rents (subject to the provisions of this Mortgage). The Mortgagor
shall hold the Rents, or an amount sufficient to discharge all current sums due on the
Debt, in trust for use in payment of the Debt. The license granted to the Mortgagor to
collect the Rents may be revoked by the Mortgagee upon any default by the Mortgagor
under the terms of the Note or this Mortgage by giving notice of such revocation to the
Mortgagor. Following such notice the Mortgagee may retain and apply the Rents toward
payment of the Debt in such order, priority and proportions as the Mortgagee, in its
discretion, shall deem proper, or to the operation, maintenance and repair of the
Mortgaged Property, irrespective of whether the Mortgagee shall have commenced a
foreclosure of this Mortgage or shall have applied or arranged for the appointment of a
receiver.
(b)
The Mortgagor shall not, without the prior written consent of the
Mortgagee, make, or suffer to be made, any Leases which are not in conformity with
prevailing market rents and terms for similar space in the area where the Mortgaged
Property is located. Except as provided in Paragraph 8(c) below, the Mortgagor will not
modify or cancel or accept surrender of any Leases or accept prepayments of installments
of the Rents for a period of more than one (1) month in advance or further assign the
whole or any part of the Rents. The Mortgagee shall have all of the rights against tenants
of the Mortgaged Property as set forth in Section 291-f of the Real Property Law of New
York. The Mortgagor shall (i) fulfill or perform each and every provision of the Leases
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on the part of the Mortgagor to be fulfilled or performed, (ii) promptly send copies of all
notices of default which the Mortgagor shall send or receive under the Leases to the
Mortgagee, and (iii) enforce, short of termination of the Leases, the performance or
observance of the provisions thereof by the tenants thereunder. In addition to the rights
which the Mortgagee may have herein, in the event of any default under this Mortgage,
the Mortgagee, at its option, may require the Mortgagor to pay monthly in advance to the
Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of such part of the Mortgaged Property as may be in
possession of the Mortgagor. Upon default in any such payment, the Mortgagor will
vacate and surrender possession of the Mortgaged Property to the Mortgagee, or to such
receiver, and, in default thereof, the Mortgagor may be evicted by summary proceedings
or otherwise. Nothing contained in this paragraph shall be construed as imposing on the
Mortgagee any of the obligations of the lessor under the Leases.
(c)
Anything contained in this Paragraph 8 to the contrary
notwithstanding, and provided that the Mortgagor is not in default hereunder, the
Mortgagor shall have the right to terminate or modify any existing Lease provided that
the replacement Lease shall provide for the payment of rents that are at least equal to the
existing payment provided for in the existing Lease and for a term to end no sooner than
that of the existing Lease, shall be with a tenant having a credit rating at least as good as
that of the existing tenant and shall contain such other terms and conditions as are
comparable for buildings of like character in the area in which the Mortgaged Property is
situate. Subject to the provisions of the preceding paragraph, the Mortgagor shall have
the right to replace or to modify existing residential Leases or to enter into new
residential Leases with respect to vacant apartment units on condition that the rent
payable under the replacement Lease, or the new Lease, as the case may be, shall be
equal to the lesser of market rents or the maximum rent allowable by law. The
Mortgagor shall on request furnish to the Mortgagee a report of its leasing activities
(including an itemized rent roll) with respect to the Mortgaged Property.
9.
Maintenance of the Mortgaged Property.
The Mortgagor shall cause the Mortgaged Property to be maintained in
good condition and repair and will not commit or suffer to be committed any waste of the
Mortgaged Property. The Improvements and the Equipment shall not be removed,
demolished or materially altered (except for normal replacement of the Equipment)
without the prior written consent of the Mortgagee. The Mortgagor shall promptly
comply with all existing and future governmental laws, orders, ordinances, rules and
regulations affecting the Mortgaged Property, or any portion thereof or the use thereof.
The Mortgagor shall promptly repair, replace or rebuild any part of the Mortgaged
Property which may be damaged or destroyed by fire or other property hazard or casualty
(including any fire or other property hazard or casualty for which insurance was not
obtained or obtainable) or which may be affected by any taking by any public or quasipublic authority through eminent domain or otherwise, and shall complete and pay for,
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within a reasonable time, any structure at any time in the process of construction or repair
on the Premises. If such fire or other property hazard or casualty shall be covered by the
Policies, the Mortgagor shall remain obligated to repair, replace or rebuild such portion
of the Mortgaged Property notwithstanding that the proceeds from such Policies may be
insufficient to affect such repair, replacement or rebuilding or that the Mortgagee shall
exercise its rights under Section 3 hereof to retain and apply all or any portion of such
proceeds to the Debt. The Mortgagor will not, without obtaining the prior consent of the
Mortgagee, initiate, join in or consent to any private restrictive covenant, zoning
ordinance, or other public or private restrictions, limiting or affecting the uses which may
be made of the Mortgaged Property or any part thereof.
10.
Environmental Provisions.
(a)
For the purposes of this paragraph the following terms shall have
the following meanings: (i) the term “Hazardous Material” shall mean any material or
substance that, whether by its nature or use, is now or hereafter defined or regulated as a
hazardous waste, hazardous substance, pollutant or contaminant under any
Environmental Requirement, or which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous or which is or
contains petroleum, gasoline, diesel fuel, another petroleum hydrocarbon product,
asbestos, asbestos-containing materials, lead or polychlorinated biphenyls, (ii) the
“Environmental Requirements” shall collectively mean all present and future laws,
statutes, common law, ordinances, rules, regulations, orders, codes, licenses, permits,
decrees, judgments, directives or the equivalent of or by any Governmental Authority and
relating to or addressing the protection of the environment or human health, and (iii) the
term “Governmental Authority” shall mean the Federal government, or any state or
other political subdivision thereof, or any agency, court or body of the Federal
government, any state or other political subdivision thereof, exercising executive,
legislative, judicial, regulatory or administrative functions.
(b)
The Mortgagor hereby represents and warrants to the Mortgagee
that (i) no Hazardous Material is currently located at, on, in, under or about the
Mortgaged Property, except as specifically set forth in ____________________, (ii) no
Hazardous Material is located at, in, on, under or about the Mortgaged Property in
manner which violates any Environmental Requirement, or which requires cleanup or
corrective action of any kind under any Environmental Requirement, (iii) no releasing,
emitting, discharging, leaching, dumping, disposing or transporting of any Hazardous
Material from the Mortgaged Property onto any other property or from any other property
onto or into the Mortgaged Property has occurred or is occurring in violation of any
Environmental Requirement, (iv) no notice of violation, non-compliance, liability or
potential liability, lien, complaint, suit, order or other notice with respect to the
Mortgaged Property is outstanding under any Environmental Requirement, nor does the
Mortgagor have knowledge or reason to believe that any such notice will be received or
is being threatened, and (v) the Mortgaged Property and the operation thereof are in full
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compliance with all Environmental Requirements. Mortgagor will promptly notify
Mortgagee if, at any time, the foregoing representation and warranty shall not be true and
correct in all respects.
(c)
The Mortgagor shall comply, and shall cause all tenants or other
occupants of the Mortgaged Property to comply, in all respects with all Environmental
Requirements. The Mortgagor shall notify the Mortgagee promptly in the event of any
spill or other release of any Hazardous Material at, in, on, under or about the Mortgaged
Property which is required to be reported to a Governmental Authority under any
Environmental Requirement or if it shall receive any notice from any Governmental
Authority that the Mortgaged Property fails to comply with an Environmental
Requirement, and Mortgagor will promptly take, at the Mortgagor’s sole cost and
expense, such actions as may be necessary to fully comply in all respects with all
Environmental Requirements. Mortgagor will pay and discharge any fine, penalty,
imposition, liability or lien that may be imposed or levied with respect to any
Environmental Requirement. Mortgagor shall provide Mortgagee with copies of all
notices and other communications to or from any Governmental Authority which pertain
to Environmental Requirements as applicable to the Mortgaged Property, including,
without limitation, any violation of or non-compliance with Environmental
Requirements, or any spill, release or remediation.
(d)
If the Mortgagor fails to timely take, or to diligently and
expeditiously proceed to complete in a timely fashion, any such action described in
clause (c) above, the Mortgagee may, in its sole and absolute discretion, make advances
or payments toward the performance or satisfaction of the same, but shall in no event be
under any obligation to do so. All sums so advanced or paid by the Mortgagee
(including, without limitation, counsel and consultant fees and expenses, investigation
and laboratory fees and expenses, and fines or other penalty payments) and all sums
advanced or paid in connection with any judicial or administrative investigation or
proceeding relating thereto, will immediately, upon demand, become due and payable
from the Mortgagor and shall bear interest at the Default Rate from the date any such
sums are so advanced or paid by the Mortgagee until the date any such sums are repaid
by the Mortgagor to the Mortgagee.
(e)
The Mortgagee may, at its option, at intervals of not less than one
year, or more frequently if the Mortgagee reasonably believes that a Hazardous Material
or other environmental condition violates or threatens to violate any Environmental
Requirement, cause an environmental assessment or audit of the Mortgaged Property or
portions thereof to be conducted to confirm the Mortgagor’s compliance with the
provisions of this paragraph, and the Mortgagor shall cooperate in all reasonable ways
with the Mortgagee in connection with any such assessment or audit. If such assessment
or audit discloses that a violation of or a liability under an Environmental Requirement
exists or if such assessment or audit was required or prescribed by law, regulation or
governmental or quasi-governmental authority, the Mortgagor shall pay all costs and
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expenses incurred in connection with such assessment or audit; otherwise, such costs and
expenses shall, notwithstanding anything to the contrary set forth in this paragraph, be
paid by the Mortgagee.
(f)
If this Mortgage is foreclosed, or if the Mortgaged Property is sold
pursuant to the provisions of this Mortgage, or if the Mortgagor tenders a deed or
assignment in lieu of foreclosure or sale, the Mortgagor shall deliver the Mortgaged
Property to the purchaser at foreclosure or sale or to the Mortgagee, its nominee, or
wholly-owned subsidiary, as the case may be, in a condition that complies in all respects
with all Environmental Requirements.
(g)
The Mortgagor will defend, indemnify, and hold harmless the
Mortgagee, its co-lenders, participants, employees, agents, officers, and directors, from
and against any and all claims, demands, penalties, causes of action, fines, liabilities,
settlements, damages, costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without limitation, counsel
and consultant fees and expenses, investigation and laboratory fees and expenses, court
costs, and litigation expenses) arising out of, or in any way related to, (i) any breach by
the Mortgagor of any of the provisions of this Paragraph 10, (ii) the presence, disposal,
spillage, discharge, emission, leakage, release, or threatened release of any Hazardous
Material which is at, in, on, under, about, from or affecting the Mortgaged Property,
including, without limitation, any damage or injury resulting from any such Hazardous
Material to or affecting the Mortgaged Property or the soil, water, air, vegetation,
buildings, personal property, persons or animals located on the Mortgaged Property or on
any other property or otherwise, (iii) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to any such Hazardous
Material, (iv) any lawsuit, proceeding or investigations brought or threatened, settlement
reached, or order or directive of or by any Governmental Authority relating to such
Hazardous Material, or (v) any violation of any Environmental Requirement or any
policy or requirement of the Mortgagee hereunder. The aforesaid indemnification and
other obligations of the Mortgagor under this Paragraph 10 shall, notwithstanding any
exculpatory or other provision of any other document or instrument now or hereafter
executed and delivered in connection with the loan evidenced by the Note and secured by
this Mortgage, constitute the personal recourse undertakings, obligations and liabilities of
the Mortgagor.
(h)
The obligations and liabilities of the Mortgagor under this
Paragraph 10 shall survive and continue in full force and effect and shall not be
terminated, discharged or released, in whole or in part, irrespective of whether the Debt
has been paid in full and irrespective of any foreclosure of this Mortgage, sale of the
Mortgaged Property pursuant to the provisions of this Mortgage or acceptance by the
Mortgagee, its nominee or affiliate of a deed or assignment in lieu of foreclosure or sale
and irrespective of any other fact or circumstance of any nature whatsoever.
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11.
Estoppel Certificates.
The Mortgagor, within ten (10) days after request by the Mortgagee and at
the Mortgagor’s expense, will furnish the Mortgagee with a statement, duly
acknowledged and certified, setting forth the amount of the Debt outstanding and any
claimed offsets or defenses thereto, and that the Note and the Mortgage are valid, legal
and binding obligations of the Mortgagor and have not been modified, or, if modified,
giving the particulars of such modification.
12.
Transfer or Encumbrance of the Mortgaged Property.
No part of the Mortgaged Property nor any interest of any nature
whatsoever therein nor any direct or indirect interest of any nature whatsoever in the
Mortgagor, or in any Guarantor (whether partnership, membership, stock, equity,
beneficial, profit, loss or otherwise) shall in any manner, directly or indirectly, be further
encumbered, sold, transferred or conveyed, or permitted to be further encumbered, sold,
transferred, assigned or conveyed without the prior written consent of the Mortgagee,
which consent in any and all circumstances may be withheld in the sole and absolute
discretion of the Mortgagee. The provisions of the foregoing sentence of this paragraph
shall apply to each and every such further encumbrance, sale, transfer, assignment or
conveyance, regardless of whether or not the Mortgagee has consented to, or waived by
its action or inaction its rights hereunder with respect to, any such previous further
encumbrance, sale, transfer, assignment or conveyance, and irrespective of whether such
further encumbrance, sale, transfer, assignment or conveyance is voluntary, by reason of
operation of law or is otherwise made.
Notwithstanding the foregoing and provided that no default shall then
exist hereunder, it shall not be a default hereunder if, upon the death of the Mortgagor or
any Guarantor, a general partner of the Mortgagor or any Guarantor, shareholder(s) of the
Mortgagor or any Guarantor or member(s) of the Mortgagor or any Guarantor or any
other person owning a direct or indirect interest in the Mortgagor or in any Guarantor (the
“Deceased”), the interest of the Deceased in the Mortgaged Property and/or the
Mortgagor or any Guarantor is transferred, in the case of an interest in the Mortgaged
Property, subject to the lien of this Mortgage, to the estate of the Deceased, and thereafter
to the spouse and/or the lineal descendants of the Deceased or trusts for the exclusive
benefit of such spouse or lineal descendants without the prior written consent of the
Mortgagee, provided each such transferee shall notify the Mortgagee in writing within
five (5) days of such transfer and thereafter shall promptly execute and deliver such
documents, including without limitation, any assumption of mortgage agreement, as may
be required by the Mortgagee, all in form and in content satisfactory to the Mortgagee in
all respects. In all other respects the provisions of this Paragraph 12 shall continue to
apply with full force and effect.
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13.
Notice.
Any notice, request, demand, statement, authorization, approval or consent
made hereunder (including, without limitation, any notice to be given under Article 14 of
the Real Property Actions and Proceedings Law) shall be in writing and shall be hand
delivered or sent by a nationally recognized overnight courier service, or by postage prepaid registered or certified mail, return receipt requested, and shall be deemed given (i)
when received at the following addresses if hand delivered or sent by a nationally
recognized overnight courier service or, if refused, when refused by or on behalf of the
person designated below to receive notices on behalf of such party, and (ii) three (3)
business days after being postmarked and addressed as follows if sent by registered or
certified mail, return receipt requested:
If to the Mortgagor:
__________________________
__________________________
__________________________
Attention: _________________
With a copy to:
__________________________
__________________________
__________________________
Attention: _________________
If to the Mortgagee:
__________________________
__________________________
__________________________
Attention: _________________
With a copy to:
__________________________
__________________________
__________________________
Attention: _________________
Each party may designate a change of address by notice to the other party, given at least
fifteen (15) days before such change of address is to become effective.
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14.
Sale of Mortgaged Property.
If this Mortgage is foreclosed, the Mortgaged Property, or any interest
therein, may, at the discretion of the Mortgagee, be sold in one or more parcels or in
several interests or portions and in any order or manner.
15.
Changes in Laws Regarding Taxation.
In the event of the passage after the date of this Mortgage of any law of
the State of New York deducting from the value of real property for the purpose of
taxation any lien or encumbrance thereon or changing in any way the laws for the
taxation of mortgages or debts secured by mortgages for state or local purposes or the
manner of the collection of any such taxes, and imposing a tax, either directly or
indirectly, on this Mortgage, the Note or the Debt, the Mortgagor shall, if permitted by
law, pay any tax imposed as a result of any such law within the statutory period or within
fifteen (15) days after demand by the Mortgagee, whichever is less, provided, however,
that if, in the opinion of the attorneys for the Mortgagee, the Mortgagor is not permitted
by law to pay such taxes, the Mortgagee shall have the right, at its option, to declare the
Debt due and payable on a date specified in a prior notice to the Mortgagor of not less
than thirty (30) days.
16.
No Credits on Account of the Debt.
The Mortgagor will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes assessed against the Mortgaged
Property or any part thereof and no deduction shall otherwise be made or claimed from
the taxable value of the Mortgaged Property, or any part thereof, by reason of this
Mortgage or the Debt. If at any time this Mortgage shall secure less than all of the
principal amount of the Debt, it is expressly agreed that any repayment of the principal
amount of the Debt shall not reduce the amount of the lien of this Mortgage until the lien
amount shall equal the principal amount of the Debt outstanding.
17.
Offsets, Counterclaims and Defenses.
Any assignee of this Mortgage and the Note shall take the same free and
clear of all offsets, counterclaims or defenses of any nature whatsoever which the
Mortgagor may have against any assignor of this Mortgage and the Note, and no such
offset, counterclaim or defense shall be interposed or asserted by the Mortgagor in any
action or proceeding brought by any such assignee upon this Mortgage or the Note and
any such right to interpose or assert any such offset, counterclaim or defense in any such
action or proceeding is hereby expressly waived by the Mortgagor.
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18.
Other Security for the Debt.
The Mortgagor shall observe and perform all of the terms, covenants and
provisions contained in the Note and in all other mortgages and other instruments or
documents evidencing, securing or guaranteeing payment of the Debt, in whole or in part,
or otherwise executed and delivered in connection with the Note, this Mortgage or the
loan evidenced and secured thereby.
19.
Documentary Stamps.
If at any time the United States of America, any state thereof, or any
governmental subdivision of any such state, shall require revenue or other stamps to be
affixed to the Note or this Mortgage, the Mortgagor will pay for the same, with interest
and penalties thereon, if any.
20.
Right of Entry.
Upon prior reasonable notice, the Mortgagee and its agents shall have the
right to enter and inspect the Mortgaged Property at all reasonable times.
21.
Books and Records.
The Mortgagor will keep and maintain or will cause to be kept and
maintained on a fiscal year basis in accordance with generally accepted accounting
practices consistently applied proper and accurate books, records and accounts reflecting
all of the financial affairs of the Mortgagor and all items of income and expense in
connection with the operation of the Mortgaged Property or in connection with any
services, equipment or furnishings provided in connection with the operation of the
Mortgaged Property. The Mortgagee shall have the right from time to time upon
reasonable notice to examine such books, records and accounts at the office of the
Mortgagor or other person maintaining such books, records and accounts and to make
copies and extracts thereof as Mortgagee shall desire. Within sixty (60) days after the
end of each fiscal year of the Mortgagor, the Mortgagor shall furnish to the Mortgagee a
certificate signed by a duly authorized representative of the Mortgagor certifying on the
date thereof either that there does or does not exist an event which constitutes, or which
upon notice or lapse of time or both would constitute, a default or an Event of Default
under this Mortgage and if such default or Event of Default exists, the nature thereof and
the period of time it has existed. The Mortgagor shall furnish to the Mortgagee, within
ten (10) days after request, such further detailed information covering the operation of the
Mortgaged Property and the financial affairs of the Mortgagor, any affiliate of the
Mortgagor, or any Guarantor (as hereinafter defined), as may be reasonably requested by
the Mortgagee.
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22.
Performance of Other Agreements.
The Mortgagor shall observe and perform each and every term to be
observed or performed by the Mortgagor pursuant to the terms of any agreement or
recorded instrument affecting or pertaining to the Mortgaged Property.
23.
Events of Default.
The Debt shall become due at the option of the Mortgagee upon the
occurrence of any one or more of the following events (herein collectively referred to as
Events of Default):
(a)
if any portion of the Debt is not paid within five (5) days after
notice by the Mortgagee to the Mortgagor that the same is past due or the entire Debt is
not paid in full on the maturity date of the Note; or
(b)
if (except as permitted by Paragraph 6) the Mortgagor shall fail to
pay any installment of any assessment against the Mortgaged Property for local
improvements heretofore or hereafter laid, which assessment is or may become payable
in annual or periodic installments and is or may become a lien on the Mortgaged
Property; or
(c)
if any Federal tax lien is filed against the Mortgagor, any
Guarantor or the Mortgaged Property and the same is not discharged of record within
thirty (30) days after the same is filed; or
(d)
if (except as specifically provided to the contrary in Paragraph 12
above) without the consent of the Mortgagee (which consent in any and all circumstances
may be withheld in the sole and absolute discretion of the Mortgagee) any part of the
Mortgaged Property or any interest of any nature whatsoever therein or any interest of
any nature whatsoever in the Mortgagor or any Guarantor (whether partnership,
membership interest, stock, equity, beneficial, profit, loss or otherwise) is in any manner,
by operation of law or otherwise, whether directly or indirectly, voluntary or involuntary,
further encumbered, sold, transferred, assigned or conveyed; or,
(e)
if without the consent of the Mortgagee any Improvement or the
Equipment (except for the normal replacement of the Equipment) is removed, demolished
or materially altered, or if the Mortgaged Property is not kept in good condition and
repair; or
(f)
if (except as permitted by Paragraph 6) the Mortgagor shall fail to
comply with any requirement or order or notice of violation of law or ordinance issued by
any governmental department claiming jurisdiction over the Mortgaged Property within
three (3) months from the
