Common use of Second Mortgages Clause in Contracts

Second Mortgages. Simultaneously with the Closing of the Loan, Borrower has delivered to Lender second mortgages on the Marriott Marquis and the Drake Swissôtel in an amount equal to twenty-five percent (25%) of the Allocated Loan Amount for such Individual Properties (together, the “Second Mortgages”). In the event that the Base Profit declines by more than $20,000,000 (as reduced by the product of (1) the Allocated Percentage with respect to any Individual Property that has been the subject of a Partial Defeasance or the reduction in the Allocated Percentage with respect to any Individual Property that has had its Allocated Loan Amount reduced due to the application of Net Proceeds and (2) $20,000,000) below the 1998 Base Profit (as reduced by the product of (1) the Allocated Percentage with respect to any Individual Property that has been the subject of a Partial Defeasance or the reduction in the Allocated Percentage with respect to any Individual Property that has had its Allocated Loan Amount reduced due to the application of Net Proceeds and (2) the 1998 Base Profit), Lender shall have the right to record the Second Mortgages. Within fifteen (15) days after notice from Lender to Borrower that the Second Mortgages will be recorded, Borrower shall deliver to Lender amounts sufficient to pay all recording taxes and other fees necessary to record the Second Mortgages, together with such other items as may be reasonably requested by Lender in connection therewith. Borrower shall also deliver, at Borrower’s expense, a title insurance policy insuring the Lien of each of the Second Mortgages, with coverage in the amount of Second Mortgages and insuring Lender that each of the Second Mortgages creates a valid second lien on the related Individual Property, subject only to the Permitted Encumbrances. In the event that Borrower fails to pay all taxes, fees, title insurance premiums and other expenses with respect to the Second Mortgages pursuant to the provisions of this Section 2.8, all excess cash flow will be deposited into the Second Mortgage Account (as defined in the Cash Management Agreement) until such time as a sufficient amount has been deposited in the Second Mortgage Account for the payment of such expenses. Lender shall have the right, but not the obligation, to apply funds on deposit in the Second Mortgage Account to the payment of any expense payable by Borrower pursuant to this Section 2.8. Provided no Event of Default shall have occurred and be continuing, Lender shall, at the direction of Borrower, apply funds on deposit in the Cash Management Agreement that would otherwise be payable to Borrower to the payment of any expense payable by Borrower pursuant to this Section 2.8.