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EXHIBIT (A)(3)
KEYCORP REAL ESTATE CAPITAL MARKETS, INC.
000 XXXXXX XXXXXX
XXXXXXXXX, XXXX 00000
November 3, 1997
Xx. Xxxx X. Xxxxxxxx
Chief Financial Officer
Plasti-Line, Inc.
000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX
Re: Premises: Plasti-Line, Inc. Company Headquarters
000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX
Dear Xx. Xxxxxxxx:
KEYCORP REAL ESTATE CAPITAL MARKETS, INC. ("Lender"), xxxxxx agrees to
make a permanent first fee mortgage loan (the "Loan") subject to the terms and
conditions set forth below and in the attached General Conditions and Special
Conditions, if any:
ARTICLE A: BORROWER
NAME: TBD single-asset, special purpose entity
PRINCIPAL PLACE OF BUSINESS ADDRESS: 000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx, XX
TYPE OF ENTITY
[] Corporation [] General Partnership [] Joint Venture
Limited Partnership Business Trust Limited Liability
Company [] Other
TAXPAYER IDENTIFICATION NUMBER:
STATE OF ORGANIZATION:
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WARRANTY OF NON-FOREIGN BORROWER
Borrower represents and warrants to Lender that Borrower is not a
"foreign person" within the meaning of Section 1445(f)(3) of the
Internal Revenue Code of 1986.
SINGLE PURPOSE, BANKRUPTCY REMOTE ENTITY
Borrower shall be a "single purpose, bankruptcy remote entity" as
described in Subsection 7(p) of the General Conditions at closing and
throughout the term of the Loan.
ARTICLE B: LOAN TERMS
AMOUNT
The principal amount of the Loan shall not exceed $ SEE EXHIBIT A:
TERM SHEET, ITEM 1. (the "Loan Amount"). The Loan Amount may be decreased as
provided in the Section of this Commitment entitled INTEREST RATE.
INTEREST RATE
This loan request is being underwritten using an assumed rate per
annum equal to SEE EXHIBIT A: TERM SHEET, ITEM 2. (the "Assumed Rate") as the
projected interest rate on the Loan. Upon satisfaction of the conditions set
forth in the Commitment for setting the interest rate on the Loan, the actual
interest rate (the "Applicable Rate") will be set (the "Rate Lock") on a date
(the "Rate Lock Date") between now and the closing date of the Loan (the
"Closing Date").
Depending upon market conditions on the Rate Lock Date, the Applicable
Rate may be different from the Assumed Rate used in approving the application.
In the event the Applicable Rate established on the Rate Lock Date is higher
than the Assumed Rate, Lender reserves the right to reduce the Loan Amount to
reflect the ability of the Property to carry the debt at the debt service
coverage ratios of SEE EXHIBIT A: TERM SHEET, ITEM 3.. The debt service
coverage ratio will be based on the actual loan constant at time of closing as
determined by Xxxxxx in its sole and absolute discretion.
Assuming the Loan satisfies the debt service ratios set forth in the
preceding paragraph, the rate of interest will be calculated on the Rate Lock
Date by adding SEE EXHIBIT A: TERM SHEET, ITEM 4. basis points over the yield
to maturity for the nearest U.S. Treasury bonds or other obligations having the
nearest equivalent maturity of SEE EXHIBIT A: TERM SHEET, ITEM 5. years
(rounded up to the nearest one-eighth of one percent) as determined by Xxxxxx
on the Rate Lock Date in accordance with the provisions of the Section of this
Commitment entitled RATE LOCK.
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PAYMENTS
Interest only shall be due on the Closing Date for interest from the Closing
Date to and including the last day of the month in which the Closing Date
occurs. Thereafter, combined monthly payments of principal and interest shall
be due and payable commencing on the first day of the second full calendar
month following the Closing Date and on the first day of each calendar month
thereafter. The amount of the monthly payment of principal and interest will be
determined by Xxxxxx on the Rate Lock Date. The monthly payments of principal
and interest will be based on a schedule which would fully amortize the Loan
over a SEE EXHIBIT A: TERM SHEET, ITEM 6. year term.
MATURITY DATE
The unpaid principal balance of the Loan together with all accrued
but unpaid interest thereon, additional interest, if any, and all other sums
due under the Loan Documents (defined in Article E of this Commitment), shall
be due and payable on the SEE EXHIBIT A: TERM SHEET, ITEM 7, anniversary of the
first day of the full calendar month following the Closing Date or (ii) the
Closing Date if the closing occurs on first day of the calendar month (the
"Maturity Date").
PREPAYMENT
The principal balance of the Loan may not be prepaid in whole or in part prior
to the SEE EXHIBIT A: TERM SHEET, ITEM 8. Loan Year (defined in Section 5 of
the General Conditions). During the SEE EXHIBIT A: TERM SHEET, ITEM 8. Loan
Year or any time thereafter, the principal balance of the Loan may be prepaid
in whole, but not in part, upon not less than sixty (60) days prior written
notice to Lender specifying the date on which prepayment is to be made (the
"Prepayment Date") which date must be a Payment Date and upon the payment of:
(i) all accrued interest to and including the Prepayment Date;
(ii) all other sums due under the Note (defined in Article E of this
Commitment), the Security Instrument (defined in Article E of this Commitment)
and all other Loan Documents; and
(iii) the Prepayment Consideration (defined in Section 5 of the
General Conditions).
The principal balance specified in any such irrevocable notice of
prepayment shall be absolutely and unconditionally due and payable on the
Prepayment Date. Lender shall not be obligated to accept any prepayment of the
principal balance of the Loan unless it is accompanied by the sums referenced
in (i), (ii) and (iii) above.
Notwithstanding anything to the contrary herein, provided no Event of
Default (defined in Subsection 7(e) of the General Conditions) exists under the
Note, the Security Instrument or the other Loan Documents, in the event of any
prepayment (i) in connection with or as a result of a casualty or condemnation
or (ii) which occurs during the last three (3) months of the Loan Year, no
Prepayment Consideration shall be due in connection therewith.
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ARTICLE C: RATE LOCK
Not less than seven (7) Business Days (defined in Section 5 of the
General Conditions) after compliance with all of the requirements of this
Commitment (provided such compliance occurs at least ten (10) Business Days
prior to the expiration date of the Commitment), Borrower shall be entitled to
request Rate Lock from Lender. Such request must be in writing and must be sent
by facsimile transmission to Lender to the attention of Xxxxxxx Xxxxxx, KeyCorp
Real Estate Capital Markets, Inc. Not later than the next Business Day, Lender
shall send by facsimile transaction a Rate Lock confirmation (the "Rate Lock
Confirmation"). THE NEXT BUSINESS DAY XXXXXX WILL LOCK THE INTEREST RATE VIA
TELEPHONE WITH THE BORROWER. THE BORROWER WILL THEN COMPLETE THE RATE LOCK
CONFIRMATION BY FILLING IN THE INTEREST RATE, INITIALING THE INTEREST RATE, AND
RETURNING THE RATE LOCK CONFIRMATION TO LENDER VIA FACSIMILE. In the event
Borrower does not (i) meet the requirements to request Rate Lock, (ii) request
Rate Lock, (iii) sign AND INITIAL the Rate Lock Confirmation, or (iv) confirm
by telephone the receipt by Lender of such Rate Lock Confirmation, within the
above time periods, Xxxxxx's obligation to fund the Loan pursuant to this
Commitment shall terminate. The closing of the Loan must take place within
three (3) Business Days of the Rate Lock Date.
Notwithstanding anything to the contrary contained in this Commitment,
Borrower shall not be entitled to Rate Lock unless Lender shall have received
the entire Origination Fee (defined in the Section of this Commitment entitled
ORIGINATION FEES under Article b) in immediately available funds, prior to
Xxxxxxxx's request for Rate Lock.
ARTICLE D: COLLATERAL
PROPERTY TO BE MORTGAGED
Approximately 348,000 sf industrial property located at 000 Xxxx Xxxxx Xxxxx,
Xxxxxxxxx, XX, (the "Premises"),more particularly described in Borrower's
application and other information submitted to Lender by Borrower, together
with the improvements (the "Improvements") constructed or to be constructed on
the Premises and all fixtures, equipment and articles of personal property now
or hereafter affixed to or used in the management, maintenance or operation of
the Property (defined below), including any replacements and additions thereto,
and such other security as may be required by Lender (collectively, the
"Property").
ARTICLE E: LOAN DOCUMENTS
The Loan shall be evidenced by the promissory note of Borrower made
payable to the order of Lender (the "Note") and shall be secured by the Loan
Documents (as defined below), including, but not limited to, the following:
SECURITY INSTRUMENT
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A duly recorded mortgage, mortgage deed, deed of trust, trust deed,
security deed, deed to secure debt or other real estate security instrument
customary in the jurisdiction in which the Premises are located (the "Security
Instrument") given by Borrower to Lender, constituting a valid first mortgage
lien, subject to no other liens or encumbrances, on the good and marketable fee
simple absolute title to the Property, subject only to such exceptions as shall
be approved by Lender and its counsel.
ASSIGNMENT OF LEASES AND RENTS
A first-priority present assignment (the "Assignment of Leases and
Rents") given by Borrower to Lender of all present and future leases of all or
any part of the Property and all renewals thereof (the "Leases") and all rents,
additional rents, revenues, issues and profits derived from the Property (the
"Rents").
SECURITY AGREEMENT
A security agreement between Borrower and Xxxxxx constituting a valid
first priority security interest, free of chattel mortgages, security
agreements, conditional sales contracts and other liens or title retention
arrangements, shall be granted by Borrower on all fixtures, equipment and
articles of personal property now or hereafter affixed to or used in the
management, maintenance and operation of the Property (other than trade
fixtures or personal property of space tenants owned by such tenants at the
expiration of their lease term). Such security interest shall be granted in the
Security Instrument or in a separate agreement if Xxxxxx's counsel requires
such an agreement. Xxxxxxxx shall also execute and deliver such UCC Financing
Statements as Xxxxxx's counsel may request.
OTHER ASSIGNMENTS
Present assignments to Lender, at its option, of (a) Borrower's
interest in any other contracts and agreements or of any other rights of
Borrower relating to the Property, including, but not limited to, any and all
operating leases or agreements, management agreements, service contracts and
maintenance contracts, (b) the final plans and specifications for Improvements
with the preparing architect's consent to Xxxxxx's use and any assignable
rights with respect to any permits, approvals or variances relating to such
Improvements, (c) all refunds, rebates, or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as
a result of tax certiorari or any proceeding for reduction, and (d) all
proceeds received by Borrower in connection with any buy-out, termination or
other modification of any of the Leases.
ENVIRONMENTAL INDEMNITY
An Environmental Indemnity Agreement from Borrower and PLASTI-LINE,
INC..("Indemnitor(s)"), who shall agree to indemnify Lender (i) for all costs
incurred by Lender in connection with the removal of hazardous substances from
the Property, regardless of whether or not Borrower caused the presence of such
hazardous substance; and (ii) against any loss, cost, damage or expense that
Lender may incur, directly or indirectly, as a result of or in connection
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with the assertion against Xxxxxx of any claim relating to the presence or
removal of any hazardous substance on the Property. The indemnities contained
in the Environmental Indemnity Agreement shall survive the satisfaction,
termination or assignment of the Note, the Security Instrument and any other
Loan Documents.
OTHER DOCUMENTS
Such other documentation as Lender may require in order to adequately
protect and perfect Xxxxxx's security interest.
The documents referred to in this Section, together with such other
documents executed in connection with the Loan, are sometimes collectively
referred to as the "Loan Documents".
ARTICLE F: EXCULPATION
Subject to the Limitations on Exculpation set forth in Subsection 7(n)
of the General Conditions and the Special Conditions, if any, the Security
Instrument shall provide that Lender's sources of satisfaction of the Loan
shall be the Property and the Rents, and other collateral given to Lender to
secure the Loan, and that Lender shall not seek to enforce any judgment out of
any other assets of Borrower, for any sums which shall be payable under the
Note, the Security Instrument or any other Loan Documents or for any deficiency
remaining after a foreclosure of the Security Instrument.
ARTICLE G: REQUIRED PROPERTY INFORMATION
APPRAISAL, ENVIRONMENTAL SITE
ASSESSMENT AND BUILDING CONDITION REPORTS
Lender shall receive at Borrower's sole cost and expense (i) an
appraisal of the Property stating an appraised value of $ 8,670,000
(satisfactory to Lender in its sole discretion), (ii) written reports with
respect to certain environmental conditions at the Property and (iii) a
Building Condition Report (defined in the General Conditions), each in form and
substance satisfactory to Lender and in accordance with the provisions set
forth in the General Conditions and Special Conditions, if any. The appraisal,
environmental, and engineering professionals, their qualifications, the scope
and methodology of their investigations, their reports and the recommendations
set forth therein and the form, scope and substance of their certifications to
Lender shall be acceptable to Lender in all respects.
SITE INSPECTION
Representatives or agents of Lender may conduct site inspections of the
Property on behalf of Lender. All fees and expenses in connection with such
inspections shall be paid by Borrower.
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ESTOPPEL LETTERS
At Lender's option, Estoppel letters satisfactory in form, scope and
substance to Lender shall be delivered from all of the commercial tenants at
the Property.
ARTICLE H: RESERVE REQUIREMENTS
COMPLETION/REPAIR RESERVE
Borrower shall, at closing, deposit an amount TO BE DETERMINED BY
LENDER IN ITS SOLE DISCRETION BASED ON ITS REVIEW OF THE BUILDING CONDITION
REPORT (the "Repair Deposit") into a non-interest bearing escrow account with
Lender for the completion or renovation of certain capital improvements to the
Property identified and recommended in the Building Condition Report, which
items shall be completed as required by Lender to Lender's satisfaction not
later than six (6) months after the Closing Date. The Repair Deposit shall
represent 125% of the estimated cost to complete all the repairs and
replacements to the capital improvements required by Xxxxxx and recommended by
Xxxxxx's consulting engineer. Lender shall disburse amounts from the Repair
Deposit to reimburse Borrower for the costs incurred in connection with the
foregoing repairs and replacements upon satisfaction by Borrower of certain
conditions and the delivery of certain items required by Xxxxxx.
REPLACEMENT RESERVE
Lender shall require Borrower to deposit an amount TO BE DETERMINED BY
LENDER IN ITS SOLE DISCRETION BASED ON ITS REVIEW OF THE BUILDING CONDITION
REPORT (the "Replacement Reserve") at the closing of the Loan into an interest
bearing escrow account with Lender to cover the estimated costs of periodic
repairs, replacements and improvements of certain specified portions of the
Property including, but not limited to, the replacement or maintenance of
building system components and items that have been identified by the Building
Condition Report. Lender shall be entitled to adjust the monthly deposits into
the Replacement Reserve in order to cover additional costs of such periodic
repairs, replacements and improvements throughout the term of the Loan. Lender
shall disburse amounts from the Replacement Reserve to reimburse Borrower for
the costs incurred in connection with the foregoing periodic repairs,
replacements and improvements upon satisfaction by Borrower of certain
conditions and the delivery of certain items required by Lender.
ARTICLE I: FEES
Xxxxxxxx agrees to pay to Xxxxxx the fees set forth below in
connection with this Commitment for the Loan. All fees paid to Lender hereunder
shall be in immediately available funds at Xxxxxx's office at 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000.
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APPLICATION FEE
Lender acknowledges receipt of the amount of SEE EXHIBIT A: TERM
SHEET, ITEM 9. (the "Application Fee") from Borrower as a non-refundable
application fee to cover Xxxxxx's cost with respect to Borrower's application
for the Loan.
PROCESSING DEPOSIT
Lender acknowledges receipt of the amount of SEE EXHIBIT A: TERM SHEET, ITEM
10. (the "Processing Deposit") to be held by Xxxxxx without interest. The
Processing Deposit shall be applied by Lender against any fees and expenses
incurred or paid by Lender in connection with the processing, underwriting or
closing of the Loan, including without limitation, property inspection fees,
appraisal fees, travel expenses of Lender's personnel, environmental site
assessment fees, loan closing fees, costs of tax lien searches, Building
Condition Report fees, Xxxxxx's counsel's fees and disbursements and other loan
fees. Any portion of the Processing Deposit not applied by Lender toward
expenses as set forth herein shall be returned by Lender to Borrower within
thirty (30) days after the closing of the Loan or in the case where the Loan
does not close and is not funded, within thirty (30) days after written request
for same by Xxxxxxxx. All expenses incurred by Xxxxxx in connection with the
processing, underwriting or closing of the Loan shall be the responsibility of
Borrower and to the extent the Processing Deposit is insufficient to cover all
such expenses, Borrower shall deliver such additional amounts as required by
Xxxxxx at the closing of the Loan or if the Loan does not close, within five
(5) Business Days after written demand by Xxxxxx.
GOOD FAITH DEPOSIT
Lender acknowledges receipt of SEE EXHIBIT A: TERM SHEET, ITEM 11. as a good
faith deposit (the "Good Faith Deposit") which shall be held by Lender without
interest. If Borrower fails to close or accept funding of the Loan for any
reason on or before the expiration date of this conditional Commitment, the
Good Faith Deposit shall be retained by Xxxxxx as liquidated damages (and not
as a penalty) in full compensation of Xxxxxx's damages in view of the
difficulty of establishing Xxxxxx's damages for loss of investment income
resulting from Xxxxxxxx's failure to close the Loan. Notwithstanding the
foregoing, if (i) Lender fails to fund the Loan for reasons other than (A)
Borrower's failure to comply with the conditions to closing as set forth in
Section 6 of the General Conditions or the Special Conditions, if any, or (B)
the occurrence of any of the events set forth in Section 21 of the General
Conditions, or (ii) Borrower fails to sign the Rate Lock Confirmation solely
because the Applicable Rate determined by Lender at Rate Lock exceeds the
Assumed Rate and the Loan Amount is substantially reduced below the Loan Amount
set forth under the Section of this Commitment entitled AMOUNT, as determined
by Xxxxxx in its sole discretion, in either case the Good Faith Deposit shall
be returned to Borrower within five (5) Business Days following written request
by Borrower. If the Loan shall close in accordance with this conditional
Commitment, the Good Faith Deposit shall be applied by Lender toward the
balance of the Origination Fee (defined in the Section of this Commitment
entitled ORIGINATION FEES) due it at Rate Lock.
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ORIGINATION FEES
Borrower shall pay Lender an origination fee in the amount of SEE
EXHIBIT A: TERM SHEET, ITEM 12. (the "Origination Fee"). The Origination Fee
shall be deemed fully earned upon acceptance of the Commitment and shall cover
Xxxxxx's cost for the origination of the Loan. The Origination Fee shall be
paid by Xxxxxxxx as follows:
(i) Upon Xxxxxxxx's acceptance of this Conditional
Commitment, a portion of the Origination Fee equal to SEE
EXHIBIT A: TERM SHEET, ITEM 13. (the "Commitment Fee") shall
be due and payable from Borrower. The Commitment Fee shall be
deemed earned on receipt and shall be non-refundable unless
(A) Lender fails to fund the Loan for reasons other than (1)
Borrower's failure to comply with the conditions to closing
as set forth in Section 6 of the General Conditions or the
Special Conditions, if any, or (2) the occurrence of any of
the events set forth in Section 20 of the General Conditions,
or (B) Borrower fails to sign the Rate Lock Confirmation
solely because the Applicable Rate determined by Lender at
Rate Lock exceeds the Assumed Rate and the Loan Amount is
substantially reduced below the amount set forth under the
Section of this Commitment entitled AMOUNT, as determined by
Lender in its sole discretion, in which case the Commitment
Fee paid by Borrower shall be refunded to Borrower within
five (5) Business Days following written request by Borrower.
Application Fees, Property inspection fees, appraisal fees, environmental site
assessment fees, title insurance and survey fees, Xxxxxx's counsel's fees and
disbursements, loan closing fees and other loan fees are non-refundable and are
not included as part of the Origination Fee but are separate obligations of
Borrower. The $10,000 processing Deposit will be refunded, except for costs
Lender has already incurred.
(ii) At the time Borrower intends to request Rate Lock,
Borrower shall pay to Lender in immediately
available funds prior to making its request for Rate
Lock, the balance of the Origination Fee. Such
additional amount .shall be deemed earned in full
upon receipt by Xxxxxx.
(iii) Notwithstanding anything contained in this
Commitment to the contrary, upon the closing of the
Loan, in accordance with this Commitment, Lender
shall refund to Borrower that portion of the
Origination Fee collected that exceeds SEE EXHIBIT
A: TERM SHEET, ITEM 12. of the actual Loan Amount.
ARTICLE J: TERM OF COMMITMENT
This Commitment is effective upon Xxxxxx's issuance of this letter to
Xxxxxxxx. This Commitment expires on the earlier of (i) JANUARY 30, 1998 and
(ii) the date set forth for the closing of the Loan at the time of Rate Lock,
by which time ALL THE CONDITIONS OF THIS
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COMMITMENT MUST BE SATISFIED AND the Loan must have closed and funded or this
Commitment shall be of no further force and effect.
[NO FURTHER TEXT ON THIS PAGE]
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ARTICLE K: CONDITION TO ACCEPTANCE
[THIS COMMITMENT SHALL NOT BE BINDING UPON LENDER UNTIL, AND SHALL REMAIN
SUBJECT IN ALL RESPECTS TO, THE COMPLETION OF XXXXXX'S UNDERWRITING OF THE LOAN
TO XXXXXX'S SOLE AND ABSOLUTE SATISFACTION AND THE APPROVAL OF THE LOAN BY
XXXXXX'S INTERNAL CREDIT COMMITTEE.]
If this Conditional Commitment is acceptable to you, please sign at
the place indicated on the following page on the enclosed duplicate hereof and
return the same together with a check in the amount of SEE EXHIBIT A: TERM
SHEET, ITEM 14. on account of the Commitment Fee to Lender at Lender's offices
at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 within seven (7) days of the date
hereof. If this Commitment and the Commitment Fee are not received by Lender
within this seven (7) day period, this Commitment shall terminate and shall be
of no further force and effect.
KEYCORP REAL ESTATE CAPITAL
MARKETS, INC.
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
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Title: Closing Manager
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cc:
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XXXXXXXX'S ACCEPTANCE
Borrower hereby unconditionally accepts the foregoing Conditional
Commitment and the attached General Conditions and Special Conditions if any,
in accordance with their terms and conditions and agrees to be bound thereby.
Xxxxxxxx further agrees that in the event that the Loan is approved by Xxxxxx's
internal credit committee, the Loan will be accepted by Borrower on the terms
and conditions set forth therein. This acceptance shall be deemed effective
when received together with the Commitment Fee by Xxxxxx.
[BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT THIS COMMITMENT SHALL NOT BE
BINDING UPON LENDER UNTIL, AND SHALL REMAIN SUBJECT IN ALL RESPECTS TO, THE
COMPLETION OF XXXXXX'S UNDERWRITING OF THE LOAN TO XXXXXX'S SOLE AND ABSOLUTE
SATISFACTION AND THE APPROVAL OF THE LOAN BY XXXXXX'S INTERNAL CREDIT
COMMITTEE.]
By:
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Name:
--------------------
Title:
--------------------
Borrower's Counsel:
---------------------------
---------------------------
[ADDRESS]
---------------------------
[TELEPHONE]
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GENERAL CONDITIONS TO COMMITMENT
1. INTEREST.
(a) Interest on the Loan shall be computed on the basis of
the actual number of days elapsed over a 360-day year. Such interest shall be
paid, in arrears, on the first day of each calendar month during the term of
the Loan.
(b) It is not intended by any provision of this Commitment to
charge interest at a rate in excess of the maximum rate of interest permitted
to be charged to Borrower under applicable law, but if, nevertheless, interest
in excess of said maximum rate shall be paid on the Loan, the excess amount
shall be returned or, to the extent permitted by applicable law, be applied in
reduction of the principal amount of the Loan, in Xxxxxx's sole discretion.
2. EXPENSES. Borrower shall pay all expenses in connection with the
Loan contemplated hereby including, but not limited to, all fees and
disbursements of Lender's counsel (and, if outside the State of Ohio, of
Xxxxxx's local counsel in the jurisdiction where Borrower is organized or where
the Property is located) including fees and disbursements incurred in
connection with the preparation and delivery of releases from the lien of the
Security Instrument, travel expenses of Lender's personnel related to the
making of the Loan, appraisal fees, engineering fees, title insurance premiums,
survey charges, mortgage and documentary stamp taxes, if any, note intangible
taxes, if any, recording charges and brokerage fees and commissions, costs of
tax lien searches and other loan fees. To the extent incurred, the foregoing
expenses shall be paid by Borrower whether or not the Loan shall close or be
funded. Wherever it is provided for herein that Borrower pay the costs and
expenses in connection with a particular item, such costs and expenses shall
include, but not be limited to, all legal fees and disbursements of Lender,
whether with respect to retained firms, the reimbursement for the expenses of
in-house staff or otherwise.
3. COUNSEL. Messrs. Xxxxx, Day, Xxxxxx & Xxxxx attn: TO BE DETERMINED,
will act as Xxxxxx's counsel in this transaction and Borrower or its counsel is
requested to contact said firm promptly after accepting this Commitment to
confirm their closing requirements and to arrange for the closing of the Loan.
The entire closing of the Loan shall take place at Xxxxxx's counsel's offices
in New York or as otherwise determined by Xxxxxx on a date mutually agreed upon
by the respective counsel after all closing requirements are satisfied. No
broker, agent, or other person is authorized to represent Lender in any way in
connection with this transaction, except Xxxxxx's authorized officers and such
counsel acting in the State of Ohio.
4. APPROVAL. All mortgage and title documents executed and delivered
in connection with the closing of the Loan, all title policies and surveys, all
Borrower organizational documents, all legal opinions, all insurance policies
and coverage and insurance companies, all required evidence of compliance with
all applicable laws and regulations, and all other evidence, information and
material required by Lender or its counsel, shall be in form, scope and
substance
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satisfactory to Xxxxxx's counsel who must approve title to the
Property, the legality, validity and enforceability of all documents pertaining
to the Loan, all proceedings in connection therewith and all other matters
relating to the Loan and the closing.
5. PREPAYMENT CONSIDERATION
(a) "Business Day" shall mean a day on which commercial banks
are not authorized or required by law to close in New York, New York.
(b) "Loan Year" shall mean each 365 or 366, as applicable,
day period after the first day of the first calendar month after the Closing
Date (or the Closing Date if the Loan closes on the first day of a calendar
month).
(c) "Prepayment Consideration" shall mean an amount equal to
the greater of (i) one percent (1%) of the principal balance of this Note being
prepaid, or (ii) the product of (A) the ratio of the amount of the principal
balance of this Note being prepaid over the outstanding principal balance of
this Note on the Prepayment Date (after subtracting the scheduled principal
payment on such Prepayment Date), multiplied by (B) the present value as of the
Prepayment Date of the remaining scheduled payments of principal and interest
from the Prepayment Date through the Maturity Date (including any balloon
payment) determined by discounting such payments at the Discount Rate (as
hereinafter defined) less the amount of the outstanding principal balance of
this Note on the Prepayment Date (after subtracting the scheduled principal
payment on such Prepayment Date). The "Discount Rate" is the rate which, when
compounded monthly, is equivalent to the Treasury Rate (as hereinafter
defined), when compounded semiannually. The "Treasury Rate" is the yield
calculated by the linear interpolation of the yields, as reported in Federal
Reserve Statistical Release H.15-Selected Interest Rate under the heading U.S.
government securities/Treasury constant maturities with maturities with
maturity dates (one longer and one shorter) most nearly approximating the
Maturity Date. (In the event Release H.15 is no longer published, Lender shall
select a comparable publication to determine the Treasury Rate.) Lender shall
notify Borrower of the amount and the basis of determination of the required
prepayment consideration.
(d) "Treasury Rate" shall mean the yield calculated by the
linear interpolation of the yields, as reported in the Federal Reserve
Statistical Release H. 15-Selected Interest Rates under the heading U. S.
Government Securities/Treasury constant maturities for the week ending prior to
the Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date. In
the event Release H. 15 is no longer published, Lender shall select a
comparable publication to determine the Treasury Rate. Lender shall notify
Borrower of the amount and the basis of determination of the required
Prepayment Consideration which shall be conclusive and binding on Borrower
absent manifest error
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6. CONDITIONS TO CLOSING. Not less than ten (10) Business Days prior
to the Closing Date Lender shall have received the following:
(a) Debt Service Coverage. Satisfactory evidence to Lender,
including, without limitation, the Leases, an appraisal, and a rent roll, which
supports, in Lender's determination, the projected debt service coverages
(after deducting all required reserves, determined by Xxxxxx, from net
operating income) as required by Article B of this Commitment.
(b) Appraisal. An appraisal of the Property prepared by an
independent appraiser holding an M.A.I. designation who shall be designated and
engaged by Xxxxxx and licensed in the state where the Property is located. Such
appraisal shall be addressed to Lender and (i) shall be prepared in accordance
with current federal regulatory requirements, (ii) shall support the projected
debt service coverages (after deducting all required reserves, determined by
Lender, from net operating income) as required by Article B of this Commitment,
(iii) shall note any readily visible environmental conditions; and (iv) shall
be satisfactory to Lender in all other respects. The fee for said appraisal
shall be paid by Xxxxxxxx. The appraisal shall also indicate the basis of and
the assumptions used in calculating the appraised value.
(c) Title Policy. An ALTA title insurance policy with a liability
limit of not less than the principal amount of the Loan insuring the Security
Instrument to Lender as a first lien on the good and marketable fee simple
absolute title to the Property and issued by a title insurance company (with
co-insurance or re-insurance with direct access agreements as Lender may
require) in such forms, amounts and by such title insurance company(ies) as
shall be satisfactory to Lender and its counsel. The title insurance policy
shall be subject only to such exceptions as shall be approved by, and shall
contain such endorsements as may be required by, Xxxxxx's counsel.
(d) Survey. A current title survey of the Premises. The survey
shall be prepared by a licensed or registered land surveyor acceptable to
Lender, certified to Lender and the title insurance company and containing the
current ALTA/ACSM certification, which shall show a state of facts in form,
scope and substance acceptable to Lender including, but not limited to, an
adequate and accurate legal description, interior lot lines, if any, the
location of all adjoining streets and roads, the distance to and names of the
nearest intersecting streets, the location of all recorded and all physical
boundary lines, all strips, gores and overlaps with adjacent properties, the
location of all Improvements on the Premises, locations of utilities,
elevations, high water marks, easements and rights-of-way, whether of record or
apparent, ingress and egress to and from the Property and natural and
constructed objects affecting the Premises and showing any encroachments and/or
discrepancies with any recorded instruments or existing boundary markers.
(e) Metes/Bounds Description. A metes and bounds description of the
Property acceptable to Lender.
(f) Opinion of Counsel. An opinion of counsel in form, scope and
substance satisfactory to Lender and Xxxxxx's counsel. Said opinion shall cover
such matters as Xxxxxx's counsel may request including, but not be limited to,
the following: that Borrower, each general
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partner or managing member of Borrower, as applicable, any guarantors of
Borrower's obligations under the Loan Documents (the "Guarantors") and any
Indemnitor(s), are duly organized, validly existing and in good standing (if
applicable) under the laws of the State of their formation or incorporation and
in the State where the Property is located; that the execution and delivery of
the Loan Documents have been duly authorized; that the Loan Documents are not
usurious and that the same are valid, binding and enforceable in accordance
with their terms and do not violate or contravene any statute or contractual
restriction binding on Borrower, each general partner or managing member of
Borrower, as applicable, any Guarantors or any Indemnitor(s).
(g) Organizational Documents. If Borrower, any general partner of
Borrower or any Guarantor or Indemnitor is a corporation, a certificate of
incorporation certified by the Secretary of State of the State of
incorporation, a Certificate of Good Standing issued by the .Secretaries of
State of the State of incorporation and the State where the Property is
located, a copy of the by-laws certified by an officer of the corporation and a
certified copy of the corporate resolution authorizing the transaction in form
satisfactory to Lender and its counsel. If Borrower, any general partner of
Borrower or any Guarantor or Indemnitor is a partnership, a copy of the
partnership agreement with all amendments thereto certified by each general
partner of Xxxxxxxx, a filed partnership certificate certified by the Secretary
of State of the State of formation, and any other such evidence of partnership
authority as Xxxxxx's counsel may require shall be submitted to Lender in form
satisfactory to Lender and its counsel. If Borrower, any general partner of
Borrower, any Guarantor or Indemnitor is a limited liability company, a copy of
the articles of organization certified by the Secretary of State of the State
of organization, a copy of the operating agreement with all amendments thereto
certified by each managing member, and such other evidence of company authority
as Xxxxxx's counsel may require shall be submitted to Lender in form
satisfactory to Lender and its counsel. If Borrower, any general partner or
member of Borrower or any Guarantor or Indemnitor is a legal entity other than
a corporation, a partnership or a limited liability company, all organizational
documentation of such entity as Lender's counsel shall require shall be
delivered to Lender and its counsel in form satisfactory to Lender and its
counsel.
(h) Legal Compliance. Evidence, in form and substance satisfactory
to Lender and Lender's counsel, confirming that the Improvements on the
Property and the use thereof are in full compliance with the applicable zoning,
subdivision, environmental protection, toxic waste, asbestos and all other
applicable federal, state or local laws and ordinances, and all rules,
regulations and requirements of any and all governmental or quasi-governmental
authorities having jurisdiction over the Property with respect to the
foregoing. The evidence shall include any and all certificates, licenses,
permits, approvals or consents therefor, including certificates of occupancy or
their legal equivalents permitting the use and occupancy of the Property for
the then present use and as intended by this Commitment, a violations search of
all applicable municipal agencies and departments and, in addition, if required
by Xxxxxx's counsel an opinion of Xxxxxxxx's counsel or architect as to the
foregoing. Such evidence shall be based on the ownership of the Property
without reference to easements or other interests in real property. If Lender
determines that the Property is not in compliance with applicable access laws,
Lender may
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impose additional conditions, require monetary reserves, change the Loan Amount
or decline to make the Loan.
(i) Leases. Leases and related documentation satisfactory to Lender
in all respects. If the Leases shall be written on a standard form of lease,
Borrower shall, prior to the closing of the Loan, submit such standard forms of
residential and commercial leases to Lender for Lender's approval. True and
complete copies of all existing Leases, and any amendments or modifications
thereto, and all Leases executed between the date of execution of this
Commitment and the closing of the Loan shall be delivered to Lender. If the
Property is used for multifamily housing, Borrower shall deliver and certify to
Lender a rent roll as set forth in Subsection (m) below in lieu of copies of
all Leases. Notwithstanding the foregoing, Lender reserves the right to receive
and approve any and all Leases affecting the Property.
(j) Service Contracts. Any and all management, operating and/or
service agreements covering the Property. Such agreements shall be satisfactory
in form and substance to Lender and shall be in full force and effect and free
from default by either party on the date of closing. All such agreements shall
be assigned to Lender. Lender, at its option, may require the parties to any
such agreement to enter into an agreement with Lender which shall provide as
follows:
(i) copies of all notices given or received under any such
agreement shall he sent to Lender:
(ii) Lender shall have the right but not the obligation to
perform any term, condition or agreement of Borrower
under any such agreement and to cure any default of
Borrower under any such agreement within specified
additional time periods: and
(iii) such other provisions as Lender may require.
(k) Financial Statements. Certified financial statements of
Xxxxxxxx, each principal of Borrower and each of the Guarantors and the
Indemnitor(s) for the prior fiscal year prepared and certified by a nationally
recognized firm of certified public accountants, which financial statements
shall be in form and substance acceptable to Lender. If audited financial
statements are not available for a Borrower, Guarantor or Indemnitor, then
Xxxxxxxx, Guarantor or Indemnitor, as applicable, shall furnish financial
statements acceptable to Xxxxxx including a statement by such party's
accountant, managing general partner, managing member or chief financial
officer, certified by the managing general partner, managing member or the
chief financial officer, whichever the case may be, describing the basis of the
presentation and certifying the financial statement as being true and correct.
Borrower, Guarantor and the Indemnitor(s) shall also deliver to Lender federal
and state income tax returns for the last two (2) calendar years prepared by an
independent certified public accountant, satisfactory to Lender. At closing,
Xxxxxxxx, each principal, managing member and general partner of Xxxxxxxx, each
Guarantor and each Indemnitor shall certify to Lender that there has been no
material adverse change since the audit and certification of the most recent
financial statement delivered to Lender.
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(1) Insurance. Insurance policies or certificates satisfactory to
Lender as to amounts, types of coverage and the companies by whom such policies
are underwritten.
(i) Policies of insurance issued by carriers and containing
terms satisfactory to Lender in its sole discretion shall be
delivered to Lender in accordance with the following
requirements:
(A) Property Insurance. Insurance with respect to the
Improvements and building equipment insuring against any
peril now or hereafter included within the classification
"All Risks of Physical Loss" in amounts at all times
sufficient to prevent Lender from becoming a co-insurer
within the terms of the applicable policies and under
applicable law, but in any event such insurance shall be
maintained in an amount which, after application of
deductible, shall be equal to the full insurable value of
the Improvements and building equipment, the term "full
insurable value" to mean the actual replacement cost of the
Improvements and building equipment (without taking into
account any depreciation, and exclusive of excavations,
footings and foundations, landscaping and paving)
determined annually by an insurer, a recognized independent
insurance broker or an independent appraiser selected and
paid by Xxxxxxxx and in no event less than the coverage
required pursuant to the terms of any Lease:
(B) Liability Insurance. Comprehensive general
liability insurance, including bodily injury, death and
property damage liability, insurance against any and all
claims, including all legal liability to the extent
insurable and imposed upon Lender and all court costs and
attorneys' fees and expenses, arising out of or connected
with the possession, use, leasing, operation, maintenance
or condition of the Property in such amounts as are
generally available at commercially reasonable premiums and
are generally required by institutional lenders for
properties comparable to the Property but in any event for
a combined single limit of at least $6,000,000 ;
(C) Workers' Compensation Insurance. Statutory
workers' compensation insurance with respect to any work on
or about the Property;
(D) Business Interruption Insurance. Business
interruption and/or loss of "rental income" insurance in an
amount sufficient to avoid any co-insurance penalty and to
provide
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proceeds which will cover a period of not less than one (1)
year from the date of casualty or loss, the term "rental
income" to mean the sum of (A) the total then ascertainable
Rents payable under the Leases and (B) the total
ascertainable amount of all other amounts to be received by
Borrower from third parties which are the legal obligation
of the tenants, reduced to the extent such amounts would
not be received because of operating expenses not incurred
during a period of non-occupancy of that portion of the
Property then not being occupied:
(E) Boiler and Machinery Insurance. Broad form boiler
and machinery insurance (without exclusion for explosion)
covering all boilers or other pressure vessels, machinery,
and equipment located in, on or about the Property and
insurance against loss of occupancy or use arising from any
breakdown in such amounts as are generally required by
institutional lenders for properties comparable to the
Property;
(F) Flood Insurance. If required by Lender, flood
insurance in an amount at least equal to the lesser of (A)
the principal balance of the Note, or (B) the maximum limit
of coverage available for the Property under the National
Flood Insurance Act of 1968, The Flood Disaster Protection
Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended;
(G) Builder's Risk Insurance. At all times during
which structural construction, repairs or alterations are
being made with respect to the Improvements (A) owner's
contingent or protective liability insurance covering
claims not covered by or under the terms or provisions of
the above mentioned commercial general liability insurance
policy; and (B) the insurance provided for in Subsection
6(1)(i)(A) written in a so-called builder's risk completed
value form (1) on a non-reporting basis, (2) against all
risks insured against pursuant to Subsection 6(1)(i)(A),
(3) including permission to occupy the Property, and (4)
with an agreed amount endorsement waiving co-insurance
provisions; and
(H) Other Insurance. Such other insurance with respect
to the Property against loss or damage of the kinds from
time to time customarily insured against and in such
amounts as are required by institutional lenders for
properties comparable to the Property.
(i) All insurance provided for in herein shall be
obtained from a similar or successor service) (each such
insurer
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shall be referred to below as a "Qualified Insurer"). All
insurers providing insurance required by this Commitment
shall be authorized to issue insurance in the state in
which the Property is located. The Policy referred to in
Subsection 6(1)(i)(B) above shall name Lender as an
additional named insured and the Policies referred to in
Subsection 6(1)(i)(A), (D), (E), (F) and (G), and as
applicable (H), above shall provide that all proceeds be
payable to Lender. The Policies referred to in Subsections
6(1)(i)(A), (E), (F) and (G) shall also contain: (i) a
standard "non-contributory mortgagee" endorsement or its
equivalent relating, inter alia, to recovery by Lender
notwithstanding the negligent or willful acts or omission
of Lender; (ii) to the extent available at commercially
reasonable rates, a waiver of subrogation endorsement as to
Lender; and (iii) an endorsement providing for a deductible
per loss of an amount not more than that which is
customarily maintained by prudent owners of similar
properties in the general vicinity of the Property, but in
no event in excess of $10,000. The Policy referred to in
Subsection 6(1)(i)(A) above shall provide coverage for
contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction
Endorsements together with an "Ordinance or Law Coverage"
or "Enforcement" endorsement if any of the Improvements or
the use of the Property shall at any time constitute legal
non-conforming structures or uses. All Policies shall
contain (i) a provision that such Policies shall not be
canceled or terminated, nor shall they expire, without at
least thirty (30) days' prior written notice to Lender in
each instance; and (ii) include effective waivers by the
insurer of all claims for Insurance Premiums (defined
below) against any loss payees, additional insureds and
named insureds (other than Borrower). Certificates of
insurance with respect to all renewal and replacement
Policies shall be delivered to Lender not less than ten
(10) days prior to the expiration date of any of the
Policies required to be maintained hereunder, which
certificates shall bear notations evidencing payment of
applicable premiums (the "Insurance Premiums"). Originals
or certificates of such replacement Policies shall be
delivered to Lender promptly after Xxxxxxxx's receipt
thereof but in any case within thirty (30) days after the
effective date thereof. If Borrower fails to maintain and
deliver to Lender the original Policies or certificates of
insurance required by this Security Instrument, upon ten
(10) days' prior notice to Borrower, Lender may procure
such insurance at Borrower's sole cost and expense.
(ii) Borrower shall comply with all
insurance requirements and shall not bring or keep or
permit to be brought or
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kept any article upon any of the Property or cause or
permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would invalidate
the insurance coverage required hereunder to be maintained
by Borrower on or with respect to any part of the Property
pursuant to this Subsection 6(1).
(m) Rent Roll and Operating Statement. A recent operating
statement and a current rent roll listing each and every Lease, identifying the
leased premises, names of all tenants, square footage or other identification
of space leased, monthly rental and all other charges payable under the Lease,
date to which paid, term of Lease, date of occupancy, date of expiration, rent
arrears, amounts taken in settlement of outstanding arrears, collections of
rent for more than one (1) month in advance, any and every special provision,
concession or inducement granted to tenants and such other information as is
reasonably requested by Lender. Borrower shall sign. date, and certify the
operating statement and the rent roll as true and accurate. For multifamily
properties, the rent roll shall indicate which units are governed by rent
regulations, and Borrower shall certify that the rents do not exceed the legal
rent permitted to be collected under the applicable rent regulations.
(n) Estoppel Letters. The estoppel letters described in the
Section of the Commitment entitled ESTOPPEL LETTERS, if any. The estoppel
letters delivered to Lender shall provide, among other things, that:
(i) the Lease constitutes the entire agreement between
the landlord and the tenant;
(ii) the Lease has not been modified or amended, except
as specifically set forth in the estoppel letter;
(iii) the Lease is in full force and effect and the term
is as per the Lease;
(iv) the premises demised under the Lease have been
completed and the tenant has taken possession of
the same on a rent-paying basis;
(v) neither the tenant nor the landlord under the Lease
is in default under any of the terms, covenants or
provisions of the Lease and the tenant knows of no
event which, but for the passage of time or the
giving of notice, or both, would constitute an
event of default under the Lease by tenant or the
landlord thereunder;
(vi) neither the tenant nor the landlord under the Lease
has commenced any action or given or received any
notice for the purpose of terminating the Lease;
(vii) all rents, additional rents and other sums due and
payable under the Lease have been paid in full and
no rents, additional rents or other
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sums payable under the Lease have been paid for
more than one (1) month in advance of the due dates
thereof;
(viii) there are no offsets or defenses to the payment of
the rents, additional rents, or other sums payable
under the Lease;
(ix) the tenant has no option or right of refusal to
purchase any portion of the Property; and
(x) the tenant has deposited the security deposit set
forth in the Lease with landlord.
To the extent that estoppel letters are not delivered for
certain Tenants, Lender may, in its sole discretion, accept an estoppel letter
from Borrower with respect to such tenant's occupancy at the Property certified
by Borrower as being true and correct.
(o) U.C.C. Searches. U.C.C. Searches against such parties as
Lender may require showing that the Property to the extent appropriate is owned
by Borrower free from any liens and encumbrances.
(p) Environmental Site Assessment. The Environmental Site
Assessment described in the Section of the Commitment entitled APPRAISAL,
ENVIRONMENTAL SITE ASSESSMENT AND BUILDING CONDITION REPORTS. Such
environmental site assessment shall include an analysis with respect to the
following environmental conditions at the Property, which shall be prepared by
independent qualified environmental professionals selected and engaged by
Xxxxxx:
(i) a Phase I environmental site assessment assessing
the presence of environmental contaminants, PCBs or
storage tanks at the Property conducted in
accordance with ASTM Standard E 1527-93, or any
successor thereto published by ASTM;
(ii) an asbestos survey of the Property which shall
include random sampling of materials and air
quality testing;
(iii) if the Property is used for residential housing, an
assessment of the presence of lead based paint,
lead in water and radon in the Improvements; and
(iv) such further site assessments as Lender may require
due to the results obtained in (i), (ii) or (iii)
above.
Borrower shall obtain permission for such environmental professional
to enter upon the Property for purposes of conducting such environmental
assessment. At least twelve Business Days prior to the closing of the Loan, the
environmental professional shall telephone Xxxxxx's
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environmental technical staff to provide an oral report, prior to submitting
the written Environmental Report.
The Environmental Report shall be accompanied by Xxxxxx's standard
Letter of Understanding Regarding Environmental Assessment of Property
providing that the environmental assessment and the Environmental Report meet
Xxxxxx's requirements and that Xxxxxx and its successors and assigns are
entitled to rely on such environmental assessment and such Environmental
Report.
Borrower acknowledges and agrees that, based on any information in
such Environmental Report or any uncertainties raised thereby, Xxxxxx reserves
the absolute right, in its sole and exclusive discretion, to decline to fund
the Loan, to impose additional conditions that must be met prior to or after
the closing of the Loan (including but not limited to requiring additional
investigation into environmental conditions in connection with the Property,
testing and sampling of soil, water, air, building materials, or other
substances or materials), and/or to change any terms and conditions of the
Loan, including but not limited to the principal amount thereof, the interest
rate, representations and warranties, covenants, guaranties, indemnities,
and/or other terms and conditions of the Loan. If Lender declines to fund the
Loan, the Commitment Fee, the Origination Fee, and the Processing Deposit paid
by Borrower shall be applied by Lender in accordance with the terms of this
Commitment.
(q) Building Condition Reports. An engineer's building condition
report in form and substance satisfactory to Lender, prepared by a consulting
engineer selected and engaged by Xxxxxx, and any additional or supplemental
reports that may be required by Xxxxxx. The reports shall evaluate the physical
condition of the Property, identifying conditions requiring immediate or near
term attention and estimate the approximate cost of remediation (the "Building
Condition Report"). A remediation program and budget satisfactory to Xxxxxx and
Xxxxxx's consulting engineer must be agreed upon with Borrower prior to
closing. All fees and expenses in connection with the Building Condition Report
shall be paid by Xxxxxxxx.
(r) Property Matters. Evidence satisfactory to Lender of the
following:
(i) that the Property is served by all utilities required for
the current or contemplated use thereof. All utility
service is provided by public utilities and the Property
has accepted or is equipped to accept such utility
service;
(ii) that all public roads and streets necessary for service of
and access to the Property for the current or contemplated
use thereof have been completed, are serviceable and
all-weather and are physically and legally open for use by
the public; and
(iii) that the Property is served by public water and sewer
systems.
(s) Termite Inspection Report. [FOR MULTIFAMILY PROPERTIES ONLY]
A termite
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inspection report of the Property in form and substance satisfactory to Lender.
7. SECURITY INSTRUMENT PROVISIONS. The Security Instrument shall
contain, among other things, the following provisions:
(a) Tax Escrow. Lender shall require Borrower to deposit monthly in
escrow, without interest, 1/12th of the annual real estate taxes, water and
sewer charges and assessments, as estimated by Xxxxxx. An initial escrow
deposit with respect to the foregoing taxes, charges and assessments will be
collected from Borrower at closing in order to establish an escrow to enable
Lender to make such payments to the appropriate taxing authority when due.
(b) Insurance Escrow. Lender shall require Borrower to deposit
monthly in escrow, without interest, 1/12th of the annual fire and other hazard
insurance premiums, as estimated by Lender. An initial escrow deposit for the
foregoing insurance premiums will be collected from Borrower at closing to
establish an escrow to enable Lender to make such payments of premiums to the
appropriate insurance company when due
(c) Late Payment. In the event any payment is not made prior to the
fifth (5th) day after its due date, a late charge of five percent (5%) of the
total payment due will be charged for the late payment.
(d) Due on Sale/Encumbrance. Any sale, assignment, encumbrance,
including, without limitation, subordinate financing or other transfer of any
portion of the Property, and any sale, transfer or hypothecation of any
interest in Borrower, or any partner, member or shareholder of Borrower without
Xxxxxx's prior written consent, shall be a default under the Security
Instrument. Lender may condition the consent required upon (i) the modification
of the Security Instrument, (ii) the assumption of the Security Instrument and
the other Loan Documents as modified, by the proposed transferee, (iii) the
payment of a transfer fee by Xxxxxxxx, (iv) the payment by Borrower of all
Lender's out-of-pocket expenses, including, without limitation, all of Lender's
attorneys' fees, (v) the approval by a Rating Agency of the proposed
transferee, (vi) the proposed transferee's continued compliance with the single
purpose entity requirements set forth in Subsection (p) below and (vii) such
other conditions as Lender may reasonably require at the time such consent is
sought. The fee referred to in (iv) above shall be payable by Borrower whether
or not Lender consents to the transfer.
(e) Default Rate. Borrower will pay, from the date an event of
default occurs under the Security Instrument, the Note or any of the other Loan
Documents (an "Event of Default") through the earlier of the date upon which
the Event of Default is cured or the date upon which the Loan is paid in full,
interest on the unpaid principal balance of the Note at a per annum rate equal
to the lesser of (a) five percent (5%) plus the Applicable Rate and (b) the
maximum interest rate which Borrower may by law pay or Lender may charge and
collect (the "Default Rate").
(f) Security Deposits. Upon the occurrence of an Event of
Default, to the extent permitted by law, Borrower will transfer to Lender all
security deposit accounts (the
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"Security Deposits") with respect to Leases relating to the Property, which
will be held by Lender in accordance with the terms of each respective Lease.
In the event Lender is not permitted by law to hold the Security Deposits,
Borrower shall deposit the Security Deposits into an account with a federally
insured institution as approved by Xxxxxx. To the extent required by law,
Lender shall hold the Security Deposits in an interest bearing account selected
by Lender in its sole discretion.
(g) Default Prepayment. If a Default Prepayment (defined below)
occurs, Borrower shall pay to Lender the entire principal amount of the Loan
and all accrued interest thereon. including. without limitation, the following
amounts:
(i) if the Default Prepayment occurs prior to the time when
prepayment of the principal balance of the Loan is
permitted, an amount equal to the sum of (A) the
present value of the interest payments which would have
accrued on the principal balance of the Loan
(outstanding as of the date of such Default Prepayment)
at the Applicable Rate from the date of such Default
Prepayment to the first date prepayment is permitted
pursuant to the Commitment discounted at a rate equal
to the Treasury Rate except that such Treasury Rate
shall be based on the U. S. Treasury constant maturity
most nearly approximating the date upon which
prepayment is first permitted pursuant to the
Commitment, and (B) the Prepayment Consideration
calculated as of the first date prepayment is permitted
pursuant to the Commitment; and
(ii) if the Default Prepayment occurs at a time when
prepayment of the principal balance of the Loan is
permitted, the Prepayment Consideration.
For purposes of the Commitment, the term "Default Prepayment" shall mean a
prepayment of the principal amount of the Loan made after the occurrence of any
Event of Default or an acceleration of the Maturity Date under any
circumstances, including, without limitation, a prepayment occurring in
connection with reinstatement of the Security Instrument provided by statute
under foreclosure proceedings or exercise of a power of sale, any statutory
right of redemption exercised by Borrower or any other party having a statutory
right to redeem or prevent foreclosure. any sale in foreclosure or under
exercise of a power of sale or otherwise.
(h) Leases.
(i) Borrower may enter into a proposed Lease (including the
renewal or extension of an existing Lease ("a Renewal
Lease")) without the prior written consent of Lender,
provided such proposed Lease or Renewal Lease (A)
provides for rental rates and terms comparable to
existing local market rates and terms (taking into
account the type and quality of the tenant) as of the
date such Lease is executed by Xxxxxxxx (unless, in the
case of a Renewal Lease, the rent
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payable during such renewal, or a formula or other
method to compute such rent, is provided for in the
original Lease), (B) is an arms-length transaction with
a bona fide, independent third party tenant, (C) does
not have a materially adverse effect on the value of
the Property taken as a whole, (D) is subject and
subordinate to the Security Instrument and the lessee
thereunder agrees to attorn to Lender, and (E) is
written on the standard form of lease approved by
Lender. All proposed Leases which do not satisfy the
requirements set forth in this Commitment shall be
subject to the prior approval of Lender and its
counsel, at Xxxxxxxx's expense. Borrower shall promptly
deliver to Lender copies of all Leases which are
entered into pursuant to this Subsection together with
Borrower's certification that it has satisfied all of
the conditions of this Subsection.
(ii) Borrower (A) shall observe and perform all the
obligations imposed upon the lessor under the Leases
and shall not do or permit to be done anything to
impair the value of any of the Leases as security for
the Debt; (B) upon request, shall promptly send copies
to Lender of all notices of default which Borrower
shall send or receive thereunder; (C) shall enforce all
of the material terms, covenants and conditions
contained in the Leases upon the part of the tenant
thereunder to be observed or performed, (D) shall not
collect any of the Rents more than one (1) month in
advance (except security deposits shall not be deemed
Rents collected in advance); (E) shall not execute any
other assignment of the lessor's interest in any of the
Leases or the Rents; and (F) shall not consent to any
assignment of or subletting under any Leases not in
accordance with their terms, without the prior written
consent of Lender.
(iii) Borrower may, without the consent of Lender, amend,
modify or waive the provisions of any Lease or
terminate, reduce rents under, accept a surrender of
space under, or shorten the term of, any Lease
(including any guaranty, letter of credit or other
credit support with respect thereto) provided that such
action (taking into account, in the case of a
termination, reduction in rent, surrender of space or
shortening of term, the planned alternative use of the
affected space) does not have a materially adverse
effect on the value of the Property taken as a whole,
and provided that such Lease, as amended, modified or
waived, is otherwise in compliance with the
requirements of this Security Instrument and any
subordinate agreement binding upon Lender with respect
to such Lease. A termination of a Lease with a tenant
who is in default beyond applicable notice and grace
periods shall not be considered
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an action which has a materially adverse effect on the
value of the Property taken as a whole. Any amendment,
modification, waiver, termination, rent reduction,
space surrender or term shortening which does not
satisfy the requirements set forth in this Subsection
shall be subject to the prior approval of Lender and
its counsel, at Borrower's expense. Borrower shall
promptly deliver to Lender copies of amendments,
modifications and waivers which are entered into
pursuant to this Subsection together with Borrower's
certification that it has satisfied all of the
conditions of this Subsection.
(iv) Notwithstanding anything contained herein to the
contrary, Borrower shall not, without the prior written
consent of Xxxxxx, enter into, renew, extend, amend,
modify, waive any provisions of, terminate, reduce
rents under, accept a surrender of space under, or
shorten the term of, any Major Lease. The term "Major
Lease" shall mean any lease of space more than 50,000
sf, including the current lease at closing to
Plasti-Line, Inc..
(i) Estoppel Certificates. At Lender's request,
Borrower shall deliver, from time to time,
estoppel certificates in form and substance
satisfactory to Lender from Borrower and all
commercial tenants under then existing Leases
which Lender in its discretion designates.
(j) Right of Redemption. If the statutes of the
jurisdiction in which the Property is located
provide for a right of redemption but permit
Borrower to waive that right, such provisions
shall be incorporated in the Security Instrument.
All parties necessary to join in the Security
Instrument or other Loan Documents to release any
marital interest(s) in the Property shall do so.
(k) Financial Statements.
(A) Borrower, Indemnitor(s) and Guarantors, if any, shall keep
adequate books and records of account in accordance with generally accepted
accounting principles ("GAAP"), or in accordance with other methods acceptable
to Lender, consistently applied and furnish to Lender: (i) monthly certified
rent rolls signed and dated by Borrower, detailing the names of all tenants of
the Improvements, the portion of Improvements occupied by each tenant, the base
rent and any other charges payable under each Lease and the term of each Lease,
including the expiration date, the extent to which any tenant is in default
under any Lease, and any other information as is reasonably required by Xxxxxx,
within twenty (20) days after the end of each calendar month; (ii) quarterly
operating statements of the Property, prepared and certified by Borrower in the
form required by Lender, detailing the revenues received, the
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expenses incurred and the net operating income before and after debt service
(principal and interest) and major capital improvements for that quarter and
containing appropriate year to date information, within thirty (30) days after
the end of each fiscal quarter; (iii) an annual operating statement of the
Property detailing the total revenues received, total expenses incurred, total
cost of all capital improvements, total debt service and total cash flow, to be
prepared and certified by Borrower in the form required by Lender, or if
required by Lender, an audited annual operating statement prepared and
certified by an independent certified public accountant acceptable to Lender,
within sixty (60) days after the close of each fiscal year of Borrower; (iv) an
annual balance sheet and profit and loss statement of Borrower, any Guarantors
and any Indemnitor(s) in the form required by Xxxxxx, prepared and certified by
the respective Borrower, Guarantors and/or Indemnitor(s), or if required by
Lender, audited financial statements prepared by an independent certified
public accountant acceptable to Lender, within sixty (60) days after the close
of each fiscal year of Borrower, Guarantors and Indemnitor(s), as the case may
be; and (v) an annual operating budget presented on a monthly basis consistent
with the annual operating statement described above for the Property, including
cash flow projections for the upcoming year, and all proposed capital
replacements and improvements at least fifteen (15) days prior to the start of
each fiscal year
(B) Upon request from Xxxxxx, Borrower, any Guarantor and any
Indemnitor shall furnish in a timely manner to Lender: (i) a property
management report for the Property, showing the number of inquiries made and/or
rental applications received from tenants or prospective tenants and deposits
received from tenants and any other information requested by Lender, in
reasonable detail and certified by Borrower (or an officer, general partner,
member or principal of Borrower if Borrower is not an individual) under penalty
of perjury to be true and complete, but no more frequently than quarterly; and
(ii) an accounting of all security deposits held in connection with any Lease
of any part of the Property, including the name and identification number of
the accounts in which such security deposits are held, the name and address of
the financial institutions in which such security deposits are held and the
name of the person to contact at such financial institution, along with any
authority or release necessary for Lender to obtain information regarding such
accounts directly from such financial institutions.
(C) Borrower, any Guarantor and any Indemnitor shall furnish Lender
with such other additional financial or management information (including State
and Federal tax returns) as may, from time to time, be reasonably required by
Xxxxxx in form and substance satisfactory to Lender.
(D) Borrower, any Guarantor and any Indemnitor shall furnish to
Lender and its agents convenient facilities for the examination and audit of
any such books and records.
(1) Environmental Matters. Borrower shall represent, warrant and covenant
with respect to the items set forth in Subsections 9(a)-(c) of these General
Conditions and shall additionally represent, warrant and covenant that:
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(i) there are no hazardous or toxic substances in, on
or under the Property, except those that are in
compliance with applicable federal, state and
local environmental laws;
(ii) there are no environmental permits required for
current or anticipated uses of the Property; and
(iii) Borrower shall, at its cost and expense, comply
with all written requests of Lender to effectuate
remediation of any condition in, on, under or
from the Property or any directive from any
governmental authority.
(m) Indemnification. Borrower and Indemnitor(s), if any, shall indemnify
Lender for all costs incurred by Lender in connection with the removal of
hazardous wastes from the Property, regardless of whether Borrower caused the
presence of such hazardous substance; and shall indemnify Lender against any
loss, cost, damage or expense that Lender may incur, directly or indirectly, as
a result of or in connection with the assertion against Lender of any claim
relating to the presence or removal of any hazardous substance on the Property.
The Security Instrument shall also contain an indemnity from Borrower with
respect to its obligations under certain provisions of ERISA (defined below).
In addition, Borrower shall indemnify Lender against any loss, costs, damage,
or expense that Lender may incur arising out of the following: (i) its
ownership of the Security Instrument or the Property; (ii) the Loan Documents
or any enforcement action taken by Lender in connection therewith; (iii) any
accident or injury occurring on the Property; (iv) any claims asserted against
Lender by reason of its alleged obligations under any Lease; (v) the payment of
any brokerage commission to anyone in connection with funding the Loan; or (vi)
any misrepresentation made by Borrower to Lender in the Security Instrument or
the other Loan Documents. The indemnifications contained in the Security
Instrument with respect to the presence of hazardous substances at the Property
and Xxxxxxxx's obligations with respect to ERISA shall survive the
satisfaction, termination or assignment of the Security Instrument, the Note
and the other Loan Documents.
(n) Limitations on Exculpation.
(i) The exculpation provided for in Article F of this Commitment
shall not: (A) constitute a waiver, release or impairment of
any obligation evidenced or secured by the Note or the
Security Instrument; (B) impair the right of Lender to name
Borrower as a party defendant in any action or suit for
judicial foreclosure and sale under the Security Instrument;
(C) affect the validity or enforceability of any indemnity,
guaranty, master Lease or similar instrument made in
connection with the Note or the Security Instrument,
including without limitation, the Environmental Indemnity
Agreement; (D) impair the right of Lender to obtain the
appointment of a receiver; (E) impair the enforcement of the
Assignment of Leases and Rents; or (F) impair the right of
Lender to
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enforce Xxxxxxxx's obligations and liabilities under certain
indemnities relating to (1) certain taxes relating to the
making and/or recording of the Security Instrument or the
Note, (2) the Employee Retirement Income Security Act of
1974, as amended("ERISA") or (3) certain asbestos, toxic
waste or other hazardous substances affecting the Property,
including without limitation, the Environmental Indemnity
Agreement.
(ii) Notwithstanding the provisions of this Subsection (i) to the
contrary, Borrower shall be personally liable to Lender for
the losses it incurs due to: (i) fraud or intentional
misrepresentation by Borrower or any other person or entity
in connection with the execution and the delivery of this
Note, the Security Instrument or the Other Security Documents
or any documents or certificate now or at any time during the
term of the Loan evidenced by the Note; (ii) Borrower's
misapplication or misappropriation of Rents received by
Borrower after the occurrence of and during the continuance
of an Event of Default; (iii) Borrower's misapplication or
misappropriation of tenant security deposits or Rents
collected in advance; (iv) the misapplication or the
misappropriation of insurance proceeds or condemnation
awards; (v) personal property taken from the Property by or
on behalf of Xxxxxxxx and not replaced with personal property
of the same utility and of the same or greater value; (vi)
any act of arson by Xxxxxxxx; or (vii) any fees or
commissions paid by Borrower after the occurrence of and
during the continuance of an Event of Default to any
principal, affiliate, member or general partner of Borrower
or Guarantor in violation of the terms of the Note, the
Security Instrument or the Other Security Documents.
(iii) Notwithstanding the foregoing, the agreement of Lender not to
pursue recourse liability as set forth in subsection (i)
above SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event of a sale, transfer or
encumbrance by Borrower without Lender's prior consent or if
the Property or any part thereof shall become an asset in (i)
a voluntary bankruptcy or insolvency proceeding, or (ii) an
involuntary bankruptcy or insolvency proceeding (other than
one filed by Xxxxxx) which is not dismissed within ninety
(90) days of filing.
(o) Representations and Warranties.
(i) Borrower shall make representations and warranties
including, without limitation, the following:
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(A) that Xxxxxxxx has good title to the Property and
the Property is free and clear of all liens,
encumbrances, servitudes and easements, recorded
or unrecorded except as set forth in the
marked-up commitment for title insurance to be
delivered and approved by Xxxxxx;
(B) that all fixtures and articles of personally
attached to the Property or used or usable in
connection with the operation of the Property are
owned by Borrower and not subject to any
conditional bills of sale, chattel mortgages or
any other liens except as approved by Xxxxxx;
(C) that no petition in bankruptcy has ever been
filed by or against Xxxxxxxx, Guarantor,
Indemnitor or any related entity, or any
principal thereof, in the last seven (7) years,
and neither Borrower, Guarantor, Indemnitor nor
any related entity, or any principal thereof, in
the last seven (7) years has ever made any
assignment for the benefit of creditors or taken
advantage of any insolvency act or any act for
the benefit of debtors;
(D) that the Property complies with all applicable
federal, state and local laws, ordinances, rules
and regulations including, without limitation,
building codes, zoning ordinances, land use and
environmental laws, access laws, rules,
regulations, orders and requirements;
(E) that a true and complete rent roll has been
delivered;
(F) that all of such Leases are arms-length
agreements with bona fide, independent third
parties, there are no prior assignments of any
Lease or any portion of Rents, additional Rents,
charges, issues or profits due and payable or to
become due and payable thereunder which are
outstanding and have priority to the Assignment
of Leases and Rents, the Leases have not been
modified or amended except as specifically
stated, each Lease is in full force and effect,
each Lease is subordinate in lien and payment to
the Security Instrument, no party under the Lease
is in default, all Rents due have been paid in
full and
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no Rent has been paid more than one month in
advance, no tenant under any Lease has an option
to purchase the Property or any portion thereof
and there are no defenses or offsets against the
enforcement of any Lease;
(G) that there is no litigation, pending or
threatened, against Borrower, any Guarantor or
any Indemnitor of the Loan;
(H) that any and all construction work, alterations
and repairs with respect to the Property have
been paid for in full and no notice of any
mechanics' or materialmen's liens or of any
claims of right to any such liens have been
received;
(I) that all financial data and documentation
furnished on behalf of Xxxxxxxx is true, complete
and correct as of the date of the closing of the
Loan;
(J) that Borrower has not defaulted under its
obligations with respect to any other outstanding
indebtedness;
(K) that the Property is assessed for real estate tax
purposes as one or more wholly independent tax
lot or lots, separate from any adjoining land or
improvements not constituting a part of such lot
or lots, and no other land or improvements is
assessed and taxed together with the Property or
any portion thereof;
(L) that the Loan is solely for the business purpose
of Xxxxxxxx, and is not for personal, family,
household, or agricultural purposes; and
(M) that the relationship between Xxxxxxxx and Xxxxxx
is solely that of debtor and creditor, and Xxxxxx
has no fiduciary or other special relationship
with Borrower, and no term or condition of this
Commitment, the Security Instrument, the Note or
the other Loan Documents shall be construed so as
to deem the relationship of Borrower and Lender
to be other than that of debtor and creditor.
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(ii) Borrower shall represent and warrant in
the Security Instrument with respect to
its compliance with certain ERISA
provisions.
(p) Special Covenants. Borrower shall covenant and agree that it has not
and shall not:
(i) engage in any business or activity other than the ownership,
operation and maintenance of the Property, and activities
incidental thereto;
(ii) acquire or own any material asset other than (i) the
Property, and (ii) such incidental personal property as may
be necessary for the operation of the Property;
(iii) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part,
transfer or otherwise dispose of all or substantially all of
its assets or change its legal structure, without in each
case Lender's consent;
(iv) fail to preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under
the laws of the jurisdiction of its organization or
formation, and qualification to do business in the state
where the Property is located, if applicable, or without the
prior written consent of Lender, amend, modify, terminate or
fail to comply with the provisions of Borrower's Partnership
Agreement, Articles or Certificate of Incorporation, Articles
of Organization or similar organizational documents, as the
case may be;
(v) own any subsidiary or make any investment in, any person or
entity without the consent of Lender;
(vi) commingle its assets with the assets of any of its general
partners, members, affiliates, principals or of any other
person or entity;
(vii) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Loan,
except for trade payables in the ordinary course of its
business of owning and operating the Property provided that
such debt is not evidenced by a note and paid when due;
(viii) become insolvent and fail to pay its debts and liabilities
from its assets as the same shall become due;
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(ix) fail to maintain its records, books of account and bank
accounts separate and apart from those of the partners,
members, principals and affiliates of Borrower, the
affiliates of a partner, member or principal of Borrower and
any other person or entity;
(x) enter into any contract or agreement with any general
partner, member, principal or affiliate of Borrower,
Guarantor or Indemnitor, or any general partner, member,
principal or affiliate thereof, except upon terms and
conditions that are intrinsically fair and substantially
similar to those that would be available on an arms-length
basis with third parties other than any general partner,
member, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, member, principal or
affiliate thereof;
(xi) seek the dissolution or winding up in whole, or in part, of
Borrower;
(xii) fail to correct any known misunderstandings regarding the
separate identity of Xxxxxxxx;
(xiii) hold itself out to be responsible for the debts of another
person;
(xiv) make any loans or advances to any third party (including any
general partner, member, principal or affiliate of Borrower
or any general partner, member, principal or affiliate
thereof);
(xv) fail to file its own tax returns;
(xvi) agree to, enter into or consummate any transaction which
would render Borrower unable to furnish any ERISA
certification required pursuant to the Security Instrument;
(xvii) fail either to hold itself out to the public as a legal
entity separate and distinct from any other entity or person
or to conduct its business solely in its own name in order
not (i) to mislead others as to the identity with which such
other party is transacting business, or (ii) to suggest that
Borrower is responsible for the debts of any third party
(including any general partner, member, principal or
affiliate of Borrower or any general partner, member,
principal or affiliate thereof;
(xviii) fail to maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size
and character and in light of its contemplated business
operations;
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(xix) file or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable
insolvency, bankruptcy, liquidation or reorganization
statute, or make an assignment for the benefit of creditors;
[or]
(xx) share any common logo with or hold itself out as or be
considered as a department or division of (i) any general
partner, principal, member or affiliate of Borrower, (ii) any
affiliate of a general partner, principal or member of
Borrower, or (iii) any other person or entity.[; or]
8. SECONDARY MARKET. Lender may, at any time, sell, transfer or assign
the Loan, the Loan Documents, and any or all servicing rights with respect to
the Loan, grant participations in the Loan or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in the Loan
in a rated or unrated public offering or private placement (the "Securities"),
and may forward to each purchaser, transferee, assignee, servicer, participant,
investor in such Securities, or any Rating Agency rating such Securities
(collectively, the "Investor"), or prospective Investor all documents and
information Lender has with respect to the Loan as Lender deems necessary or
desirable. Borrower, the Guarantors and Indemnitor(s), if any, shall furnish
and consent to Lender furnishing to such Investors or such prospective
Investors all information concerning the Loan, the Property, the Leases and the
financial condition of Borrower, any Guarantor, any Indemnitor, and the
Property in such form, substance and detail as Lender, such Investor or such
prospective Investor may request. Upon any such transfer, Borrower, the
Guarantors and the Indemnitor(s) shall provide an estoppel certificate to the
Investor or any prospective Investor in form and content satisfactory to
Lender, such Investor or such prospective Investor together with such other
documents as Lender may reasonably require.
9. ENVIRONMENTAL REPRESENTATIONS. Borrower represents, warrants and
covenants as of the date of this Commitment and as of the date of the
Borrower's acceptance of this Commitment, that:
(a) the Property is not currently used in a manner, and to the best
of Xxxxxxxx's knowledge no prior use (by Borrower or any prior owner) has
occurred, which violates applicable federal, state or local environmental laws;
(b) neither Borrower nor any tenant has received any notice
from a government agency for a violation of such laws and if such notice is
received, Borrower shall immediately notify Lender;
(c) Borrower shall not cause nor permit any tenant to cause a
violation of any applicable federal, state or local environmental laws, nor
permit any environmental liens to be placed on the Property;
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(d) Xxxxxxxx and Indemnitor(s) shall indemnify Lender for all
costs incurred by Lender in connection with the removal of hazardous wastes
from the Property, regardless of whether Borrower caused the presence of such
hazardous waste; and
(e) Borrower and Indemnitor(s) shall indemnify Lender against
any loss, costs, damage or expense that Lender may incur, directly or
indirectly, as a result of or in connection with the assertion against Lender
of any claim relating to the presence or removal of any hazardous waste on the
Property.
10. OTHER DOCUMENTATION. Borrower shall provide Lender with such other
evidence, information and material as Lender or its counsel may reasonably
require.
11. NO ORAL CHANGE. The Commitment may not be modified, amended,
waived, extended, changed, discharged or terminated orally, or by any act or
failure to act on the part of Lender or Borrower, but only by an agreement in
writing signed by the party against whom the enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
12. NOTICES. All notices or other written communications hereunder
shall be deemed to have been properly given (i) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof and confirmed by telephone by sender, (ii) one (1) Business Day after
having been deposited for overnight delivery with any reputable overnight
courier service, or (iii) three (3) Business Days after having been deposited
in any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed to Borrower or Lender, as the case may be, at the
addresses set forth on the first page of this Commitment or addressed as such
Party may from time to time designate by written notice to the other parties.
EITHER PARTY BY NOTICE TO THE OTHER MAY DESIGNATE ADDITIONAL OR DIFFERENT
ADDRESSES FOR SUBSEQUENT NOTICES OR COMMUNICATIONS.
13. GOVERNING LAW. This Commitment has been issued by Xxxxxx in
Cleveland, Ohio from where all advances of the Loan, closing of the Loan,
delivery of any additional security and all matters incidental to the Loan or
this Commitment shall take place. This Commitment and all other Loan Documents
shall be governed by and construed in accordance with the laws of the State of
Ohio and the applicable laws of the United States of America. Notwithstanding
the foregoing, however, the laws of the State where the Property is located
shall apply with respect to (a) the creation, perfection, priority and
enforcement of the lien or the pledge, as the case may be, of (i) the Security
Instrument, (ii) the Assignment of Leases and Rents and (iii) to the extent the
escrow accounts created pursuant to the Completion/Repair and Security
Agreement and the Replacement Reserve and Security Agreement are located in the
State where the Property is located, the Completion/Repair and Security
Agreement and the Replacement Reserve and Security Agreement, and (b) the
determination of deficiency judgments.
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14. WAIVER/SURVIVAL. The provisions of this Commitment cannot be
waived or modified unless such waiver or modification be in writing and signed
by both Borrower and Lender. The terms of this Commitment which are not
incorporated in the formal Loan Documents shall, to the extent applicable,
survive the closing of the Loan and remain binding on the parties. This
Commitment is for the benefit only of the parties thereto and no third party
shall have any interest therein or in the proceeds of the Loan. This Commitment
sets forth the entire agreement between Borrower and Lender, and all other
agreements shall be deemed to have merged herewith. Where terms and conditions
of this Commitment differ from the terms and conditions of the Loan as applied
for, this Commitment shall prevail. Borrower acknowledges that Xxxxxx has made
no representations or warranties to Borrower except those as set forth herein.
15. NON-ASSIGNABILITY. This Commitment is issued in response to
Xxxxxxxx's application for a loan and in reliance upon the representations made
in such application. This Commitment and the proceeds thereof are not
assignable by Borrower to any other person, corporation, partnership or limited
liability company without Xxxxxx's consent in writing. For the purposes of this
Section, an assignment shall be deemed to include (i) if Borrower is a
corporation, the voluntary or involuntary sale, conveyance or transfer of
Borrower's stock (or the stock of any corporation directly or indirectly
controlling Borrower by operation of law or otherwise) or the creation or
issuance of a new stock by which an aggregate of more than 10% of Borrower's
stock shall be vested in a party or parties who are not now stockholders, (ii)
if Borrower is a partnership, the change, removal or resignation of a general
partner or managing partner, or (iii) if Borrower is a limited liability
company, the change, removal or resignation of a managing member.
16. PUBLICITY. In the event the Loan contemplated herein is made,
Xxxxxx shall have the right to issue press releases, advertisements and other
promotional materials describing in general terms or in detail, Xxxxxx's
participation in such transaction.
17. CONFIDENTIALITY. This Commitment is being furnished to Borrower on
a confidential basis and may not be reproduced, used, distributed or disclosed
to third parties prior to acceptance, except with Xxxxxx's prior written
consent.
18. CLOSING FUNDS. All funds required to be paid by Borrower to Lender
at closing must be in the form of certified funds or made by wire transfer of
immediately available federal funds.
19. OBLIGATIONS TO FUND. If, on or before the Closing Date, any of the
following shall have occurred, Lender shall have no obligation to close and
fund the Loan under this Commitment:
(a) Casualty/Damage. Any of the Property shall have been
damaged and not repaired to Lender's satisfaction or been taken in condemnation
or other similar proceeding, or any such proceeding shall be pending;
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(b) Structural Damage. If there shall have been a structural
change in the physical condition of any portion of the Property;
(c) Violations. Any notice of violations of any municipal
ordinances shall have been filed against the Property by any municipal
department;
(d) Bankruptcy. If Borrower, any Guarantor or Indemnitor or
any partners, members or principal shareholders or officers of any of them, or
any tenant under any lease deemed by Lender to be material to Lender's security
or any guarantor of any such lease shall be the subject of any bankruptcy,
reorganization or insolvency proceeding;
(e) Environmental. Discovery of any environmental conditions
at the Property unacceptable to Lender;
(f) Site Inspection. An unsatisfactory Engineer's Report or
site inspection conducted by Lender or any engineering firm retained by Xxxxxx;
(g) Adverse Financial Change. The income and expenses of the
Property, the Leases, the occupancy of the Property and all other features of
the transaction, including the financial condition of Borrower, any Guarantor
or Indemnitor, as represented in this Commitment, in any loan application or in
any other documents and communications presented to Lender in order to induce
Lender to make the Loan shall have materially changed;
(h) General Legal Compliance. Any action, suit or proceeding,
judicial, administrative or otherwise is pending against or affecting Borrower
or the Property;
(i) Representations and Warranties. If the representations
and warranties contained herein are false or incorrect in any respect; or
(j) Default. If any condition occurs or shall have occurred
which would be deemed an Event of Default under the Loan Documents if they were
in effect.
20. BROKER INDEMNIFICATION. Borrower represents that it shall pay any
and all brokerage commissions owed to any broker in this transaction. It is
understood and agreed that any broker is the agent for Xxxxxxxx and that no
statement, acts or representations on the part of it or its agents shall be
considered binding upon Lender. It is further understood and agreed that by
Xxxxxx's issuance of the Commitment it shall be under no obligation for payment
of any brokerage commission or fee of any kind with respect to the Commitment
and that by Xxxxxx's issuance of the Commitment to the Borrower, Xxxxxxxx
agrees to pay the fee and commission of any broker and to indemnify, save
harmless and defend Xxxxxx from and against any and all claims asserted by any
broker for brokers' or finders' fees and commissions in connection with the
negotiation, execution and consummation of the Loan, the Commitment, such
indemnity to include Xxxxxx's counsel fees.
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21. REPRESENTATIONS AND WARRANTIES. All representations and warranties
made by Borrower herein shall also be deemed made as of the Closing Date.
22. SOLE DISCRETION OF LENDER. Wherever pursuant to this Commitment
(a) Lender exercises any right given to it to approve or disapprove, (b) any
arrangement or term is to be satisfactory to Lender, or (c) any other decision
or determination is to be made by Lender, the decision of Lender to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Lender, shall
be in the sole and absolute discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein
SPECIAL CONDITIONS TO COMMITMENT
Borrower must enter in to a twenty-five (25) year lease with Plasti-Line, Inc.
at rental rates at least 5% above market rents, as determined by an independent
appraisal. The lease must be an absolute net lease with CPI increase at least
every five (5) years, and must be satisfactory to Lender in its sole and
absolute discretion.
EXHIBIT A: TERM SHEET
1. Loan Amount: $ 6,500,000
2. Assumed Interest Rate: 9.25%
3. Debt Service Coverage Ratio: 125%
4. Basis Points over the applicable U.S.
Treasury Bonds: 300
5. Maturity Date of U.S. Treasury Bonds: 10 Year U.S. Treasury
6. Amortization Period: 25 Years
7. Maturity Date of Loan: tenth (10th)
8. Prepayment Lockout Period: sixth (6th)
9. Application Fee: $2,500
10. Processing Deposit: $10,000
11. Good Faith Deposit: Not Applicable
12. Origination Fee: 1.0% of the Loan Amount
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13. Portion of Origination Fee due with
Commitment: 1/2% of the Loan Amount
14. Check Amount to be Returned with
Commitment: $ 45,000.00
15. [Miscellaneous]:
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16. [Miscellaneous]:
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17. [Miscellaneous]:
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KeyCorp Real Estate Capital Markets, Inc. Closer:
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1. Date:
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