EXHIBIT 10.5
MORTGAGE
and
SECURITY AGREEMENT
Dated: January 29, 1998
in the amount of
$2,512,000
(the "Mortgage Amount")
from
VICON INDUSTRIES, INC.
having an office at:
89 Arkay Drive
Hauppauge, New York 11788
(the "Mortgagor")
to
KEYBANK NATIONAL ASSOCIATION
A National Banking Association
having an office at:
1377 Motor Parkway
Islandia, New York 11788
(the "Mortgagee")
LOCATION OF PREMISES:
Street Address : 89 Arkay Drive, Hauppauge
County of : Suffolk
State of : New York
District : 0800
Section : 181.00
Block : 03.00
Lot : 002.013
After recording, please return to:
GANDIN, SCHOTSKY, RAPPAPORT, GLASS & GREENE, LLP
445 Broad Hollow Road
Melville, N. Y. 11747
This instrument was prepared by the above-named attorneys.
MORTGAGE AND SECURITY AGREEMENT
$2,512,000
THIS MORTGAGE AND SECURITY AGREEMENT, made the 29th day of January, 1998,
by VICON INDUSTRIES, INC., a New York State corporation with an office for the
transaction of business located at 89 Arkay Drive, Hauppauge, New York , the
MORTGAGOR to KEYBANK NATIONAL ASSOCIATION, a national banking association, with
an office for the transaction of business located at 1377 Motor Parkway,
Islandia, New York 11788, the MORTGAGEE.
WITNESSETH, that to secure the payment of an indebtedness evidenced by a
certain note bearing even date herewith in the principal sum of TWO MILLION FIVE
HUNDRED TWELVE THOUSAND ($2,512,000) Dollars lawful money of the United States,
as the same may be modified, renewed or extended (the "Note") which sum, with
interest thereon is to be paid by Mortgagor to Mortgagee in accordance with the
terms of said Note, and also to secure the payment by Mortgagor to Mortgagee of
all sums expended or advanced by Mortgagee pursuant to any covenant, term or
provision of this Mortgage or any other Loan Document (as that term is defined
in the Note), and to secure the performance of each covenant, term and provision
by Mortgagor to be performed pursuant to this Mortgage or any other Loan
Document, Mortgagor hereby mortgages to Mortgagee, its successors and assigns,
the following described property (the "Mortgaged Property") whether now owned or
held or hereafter acquired:
ALL THAT TRACT OR PARCEL OF LAND situate in the County of Suffolk, State
of New York, and being the same premises described in Schedule "A" hereto
annexed and made a part hereof (the "Premises").
ALL RIGHT, TITLE AND INTEREST of Mortgagor in and to any and all
buildings, structures and improvements, including without limitation, the
foundations and footings thereof, now or at any time hereafter erected,
constructed or situated upon the Premises or any part thereof (the
"Improvements").
TOGETHER with all fixtures, chattels and articles of personal property now
or hereafter attached to or used in connection with the Premises, together with
any and all replacements thereof and additions thereto (the "Chattels"). This
Mortgage shall be considered a financing statement pursuant to the provisions of
the Uniform Commercial Code, covering fixtures which are affixed to the
Premises. The types of collateral covered hereby are described in this
paragraph. The debtor is VICON INDUSTRIES, INC. The secured party is KEYBANK
NATIONAL ASSOCIATION. Their addresses are set forth above.
TOGETHER with all right, title and interest, if any, of Mortgagor of, in
and to the bed of any street, road or avenue, opened or proposed, in front of,
adjoining or abutting upon the Premises to the center line thereof.
TOGETHER with any and all awards heretofore and hereafter made to the
present and all subsequent owners of the Premises by any governmental or other
lawful authorities for the taking by eminent domain of the whole or any part of
the Premises, or any easement therein, including any awards for any changes of
grade of streets, which said awards are hereby assigned to Mortgagee, who is
hereby authorized to collect and receive the proceeds of any such awards from
such authorities and to give proper receipts and acquittances therefor, and to
apply the same toward the payment of the amount owing on account of this
Mortgage and the Note, notwithstanding the fact that the amount owing thereon
may not then be due and payable.
TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its
successors and assigns, PROVIDED ALWAYS that if Mortgagor shall pay or cause to
be paid to Mortgagee, its successors and assigns, said principal sum of money
and other charges mentioned and set forth in this Mortgage and in the Note,
together with interest thereon, then and from thence forth, the Mortgaged
Property and the estate hereby granted shall cease, determine and be void.
AND Mortgagor covenants with Mortgagee as follows:
1. REPRESENTATIONS. Mortgagor hereby represents and warrants to
Mortgagee as follows:
(a) That the Loan Documents (as that term is defined in the Note)
are in all respects valid and legally binding obligations, enforceable in
accordance with their respective terms.
(b) That the execution and delivery of the Loan Documents by
Mortgagor does not, and the performance and observance by Mortgagor of its
obligations thereunder will not, contravene or result in a breach of (i) if
Mortgagor purports to be a corporation, any provision of Mortgagor's corporate
charter or by-laws, or, if Mortgagor purports to be partnership, any provision
of Mortgagor's partnership agreement or certificate, or (ii) any governmental
requirements, or (iii) any decree or judgement binding on Mortgagor, or (iv) any
agreement or instrument binding on Mortgagor for which waivers of the same have
not been obtained or any of their respective properties, nor will the same
result in the creation of any lien or security interest under any such agreement
or instrument.
(c) That there are no actions, suits, investigations or proceedings
pending, or, to the knowledge of Mortgagor, threatened against or affecting
Mortgagor (or any general partner of Mortgagor), or the Mortgaged Property, or
involving the validity or enforceability of any of the Loan Documents or the
priority of the lien thereof, or which will affect Mortgagor's ability to repay
the Note, at law or in equity or before or by any governmental authority.
(d) That Mortgagor has no knowledge of any violations or notices of
violations of any requirements for which waiver(s) of same have not been
obtained.
(e) If Mortgagor (or any general partner of Mortgagor if Mortgagor
is a partnership) purports to be a corporation, that (i) it is a corporation
duly organized, validly existing and in good standing under the laws of the
state or foreign country in which it is incorporated, (ii) if required by the
laws of the state in which the Premises is located, it is duly qualified to do
business and is in good standing therein, (iii) it has the corporate power,
authority and legal right to own and operate its properties and assets, carry on
the business now being conducted and proposed to be conducted by it, and to
engage in the transactions contemplated by the Loan Documents, and (iv) the
execution and delivery of the Loan Documents to which it is a party and the
performance and observance of the provisions thereof have been duly authorized
by all necessary corporate actions.
If Mortgagor (or any general partner of Mortgagor if
Mortgagor) is a partnership, that (i) it is duly formed and validly existing
under the laws of the state in which it is formed, (ii) if required by the laws
of the state in which the Premises is located, it is fully qualified to do
business therein, (iii) it has the power, authority and legal right to own and
operate its properties and assets, to carry on the business conducted and
proposed to be conducted by it, and to engage in the transactions contemplated
by the Loan Documents, and (iv) the execution and delivery of the Loan Documents
to which it is a party and the performance and observance of the provisions
thereof have all been duly authorized by all necessary actions of its partners.
(f) That all utility services necessary and sufficient for the
construction, development and operation of the Mortgaged Property for its
intended purposes are presently available to the Premises (or the boundaries
thereof if this Mortgage is executed in conjunction with a construction loan)
through dedicated public rights of way or through perpetual private easements,
approved by Mortgagee, with respect to which the Mortgage creates a valid,
binding and enforceable first lien, including, but not limited to, water supply,
storm and sanitary sewer, gas, electric and telephone facilities, and drainage.
(g) That neither the Mortgaged Property nor any portion thereof is
now damaged or injured as result of any fire, explosion, accident, flood or
other casualty or has been the subject of any taking, and to the knowledge of
Mortgagor, no taking is pending or contemplated.
(h) That any brokerage commissions payable by Mortgagor due in
connection with the transactions contemplated hereby have been paid in full and
that any such commissions coming due in the future will be promptly paid by
Mortgagor. Mortgagor agrees to and shall indemnify Mortgagee from any liability,
claims or losses arising by reason of any such brokerage commissions. This
provision shall survive the repayment of the Note and shall continue in full
force and effect so long as the possibility of such liability, claims or losses
exists.
(i) That the financial statements of Mortgagor previously delivered
to Mortgagee are true and correct in all respects, have been prepared in
accordance with generally accepted accounting principles consistently applied,
and fairly present the respective financial conditions of Mortgagor as of the
respective dates thereof and the results of their operations for the periods
covered thereby; that no materially adverse change has occurred in the assets,
liabilities, or financial conditions reflected therein since the respective
dates thereof; and that no additional borrowings (except for borrowings under
existing line of credit with IBJ Schroeder as disclosed to the Mortgagee) have
been made by Mortgagor since the date thereof other than the borrowing
contemplated hereby.
(j) That all federal, state and other tax returns of Mortgagor
required by law to be filed have been filed, that all federal, state and other
taxes, assessments and other governmental charges upon Mortgagor or its
respective properties which are due and payable have been paid, and that
Mortgagor has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods for which such
returns have been filed.
(k) That Mortgagor has made no contract or arrangement of any kind
or type whatsoever (whether oral or written, formal or informal), the
performance of which by the other party thereto could give rise to a lien or
encumbrance on the Mortgaged Property, except for contracts (all of which have
been disclosed in writing to Mortgagee) made by Mortgagor with parties who have
executed and delivered lien waivers to Mortgagor, and which, in the opinion of
Mortgagee's counsel, will not create rights in existing or future lien claimants
which may be superior to the lien of the Mortgage.
(l) That the rights of way for all roads necessary for the full
utilization of the Improvements for their intended purposes have either been
acquired by the Mortgagor, the appropriate governmental authority or have been
dedicated to public use and accepted by such governmental authority, and all
such roads shall have been completed, or all necessary steps shall have been
taken by Mortgagor and such governmental authority to assure the complete
construction and installation thereof prior to the date upon which access to the
Mortgaged Property via such roads will be necessary. All curb cuts, driveway
permits and traffic signals necessary for access to the Mortgaged Property are
existing or have been fully approved by the appropriate governmental authority.
(m) That no Event of Default (hereinbelow defined) exists and no
event which but for the passage of time, the giving of notice or both would
constitute an Event of Default has occurred.
2. THE INDEBTEDNESS. Mortgagor will pay the indebtedness as provided in
the Note or in any modification, renewal or extension of the Note.
3. INSURANCE. At all times that the Note is outstanding, including without
limitation during any construction period (a "Construction Period"), Mortgagor
shall maintain insurance with respect to the Premises the Improvements and the
Chattels against such risks and for such amounts as are customarily insured
against by businesses of like size and type paying, as the same become due and
payable, all premiums in respect thereto, including but not limited to:
(a) Prior to completion of construction of the Improvements, if the
same have not been completed, builder's risk all risk (or equivalent coverage)
insurance upon any work done or material furnished in connection with
construction of the Improvements, issued to Mortgagor and Mortgagee and written
in non-reporting completed form to cover the replacement cost of the
Improvements and at such time that builder's risk insurance shall not be
available due to completion of the construction of the Improvements, or if all
Improvements have been completed, insurance protecting the interests of the
Mortgagor and Mortgagee as their interests may appear against loss or damage to
the Improvements by fire, lightning, flood and other casualties normally insured
against, with a uniform standard extended coverage endorsement, such insurance
at all times to be in an amount of the Note or the total cash replacement value
of the Improvements not covered by builder's risk insurance, as determined at
least once every three years by a recognized appraiser or insurer selected by
the Mortgagor and approved by the Mortgagee.
(b) Boiler and machinery insurance covering physical damage to the
Improvements and to the major components of any central heating, air
conditioning or ventilation systems and such other equipment as Mortgagee shall
designate.
(c) Workers' compensation insurance, disability benefits insurance,
and such other form of insurance which the Mortgagor is required by law to
provide, covering loss resulting from injury, sickness, disability or death of
employees of Mortgagor who are located at or assigned to the Premises or who are
responsible for the construction of the Improvements.
(d) Insurance protecting Mortgagor and Mortgagee against loss or
losses from liabilities imposed by law or assumed in any written contract and
arising from personal injury and death or damage to the property of others
caused by accident or occurrence, in such amounts as may be reasonably
designated from time to time by Mortgagee, excluding liability imposed upon the
Mortgagor by any applicable workers' compensation law, or such other amounts as
may be required in writing by the Mortgagee; and a blanket excess liability
policy in an amount reasonably satisfactory to the Mortgagee protecting
Mortgagor and Mortgagee against any loss or liability or damage for personal
injury or property damage.
4. OTHER INSURANCE PROVISIONS. All insurance required under this Mortgage
shall be procured and maintained in financially sound and generally recognized
responsible insurance companies selected by the Mortgagor and authorized to
write such insurance in the State of New York and acceptable to the Mortgagee.
Such insurance may be written with deductible amounts comparable to those on
similar policies carried by other entities engaged in businesses similar in
size, character and other respects to those in which the Mortgagor is engaged.
All policies evidencing such insurance shall provide for (i) payment of the
losses to Mortgagor and Mortgagee as their respective interests may appear, and
(ii) at least thirty (30) days written notice to Mortgagor and Mortgagee prior
to cancellation, reduction in policy limits or material change in coverage
thereof. The insurance required by Section 3(a) shall contain a New York
Standard mortgagee endorsement in favor of Mortgagee. All insurance required
hereunder shall be in form, content and coverage satisfactory to the Mortgagee.
The original policy, or a certified duplicate copy thereof, for all insurance
required hereby shall be delivered to Mortgagee. The proceeds of any insurance
which are paid to the Mortgagee, if less than $100,000, shall be paid over to
the Mortgagor in whole or in part for the repair of the Improvements, or, if
equal to $100,000 or more, may be applied by the Mortgagee toward the payment of
any monies secured by this Mortgage, or, may be paid over, wholly or in part, to
the Mortgagor for the repair of the Improvements or for any other purpose or
object satisfactory to the Mortgagee. Mortgagor shall deliver to Mortgagee at
least thirty (30) days prior to the expiration date of any insurance coverages
required hereunder, a certificate reciting that there is in full force and
effect, with a term covering at least the next succeeding year, insurance in the
amounts and of the types required hereunder.
5. ALTERATIONS. No Improvements shall be structurally altered, removed or
demolished without the prior written consent of Mortgagee which consent shall
not be unreasonably withheld.
6. APPOINTMENT OF RECEIVER. Mortgagee in any action to foreclose this
Mortgage shall be entitled, without notice and as a matter of right and without
regard to the adequacy of any security of the indebtedness or the solvency of
Mortgagor, upon application to any court having jurisdiction, to the appointment
of a receiver of the rents, income and profits of the Mortgaged Property.
If an Event of Default (hereinbelow defined) occurs under this
Mortgage, as a matter of right and without regard to the adequacy of any
security for the Note, the Mortgagor, upon demand of the Mortgagee, shall
surrender the possession of, and it shall be lawful for Mortgagee, by such
officer or agent as it may appoint, to take possession, of all or any part of
the Mortgaged Property together with the books, papers, and accounts of the
Mortgagor pertaining thereto, and to hold, operate and manage the same, and from
time to time to make all needed repairs and improvements as Mortgagee shall deem
wise; and, if Mortgagee deems it necessary or desirable, to complete
construction and equipping of any Improvements and in the course of such
construction or equipping to make such changes to the same as it may deem
desirable; and Mortgagee may sell the Mortgaged Property or any part thereof, or
institute proceedings for the complete or partial foreclosure of the lien of
this Mortgage on the Mortgaged Property, or lease the Premises or any part
thereof in the name and for the account of the Mortgagor or Mortgagee and
collect, receive and sequester the rents, revenues, earnings, income, products
and profits therefrom, and out of the same and any other monies received
hereunder pay or provide for the payment of, all proper costs and expenses of
taking, holding, leasing, selling and managing the same, including reasonable
compensation to Mortgagee, its agents and counsel, and any charges of Mortgagee
hereunder, and any taxes and other charges prior to the lien of this Mortgage
which Mortgagee may deem it wise to pay.
7. PAYMENT OF TAXES. Mortgagor will pay all taxes, assessments, sewer
rents or water rates or sums due under any payment in lieu of tax agreement
("Pilot Agreement") and in default thereof, Mortgagee may pay the same. In the
event that Mortgagee shall pay any such tax, assessment, sewer rent or water
rate, Mortgagee shall have the right, among other rights, to declare the amount
so paid with interest thereon immediately due and payable, and upon default of
Mortgagor in paying any such amount with interest thereon, Mortgagee shall have
the right to foreclose for such amount subject to the continuing lien of this
Mortgage for the balance of the mortgage indebtedness not then due.
In the event that the Mortgagor should fail to pay any sum the
Mortgagor has agreed to pay pursuant to this covenant for a period in excess of
sixty (60) days after the same is due and payable, in addition to any other
remedies available to the Mortgagee hereunder, the Mortgagee may, at its option,
require that the Mortgagor deposit with the Mortgagee, monthly, one-twelfth
(1/12th) of the annual charges for taxes and any other sums the Mortgagor is
obligated to pay pursuant to this covenant and the Mortgagor shall make such
deposits with the Mortgagee. The Mortgagor shall simultaneously therewith
deposit with the Mortgagee a sum of money which together with the monthly
installments aforementioned will be sufficient to make payment of all sums
required to be paid hereunder at least thirty (30) days prior to the due date of
such payments, it being understood that the Mortgagee shall calculate the amount
of such deposits and notify the Mortgagor of the sum due. Should an Event of
Default (hereinbelow defined) occur, the funds deposited with the Mortgagee
pursuant to this provision may be applied in payment of the charges for which
said funds shall have been deposited or to the payment of any other sums secured
by this Mortgage as the Mortgagee sees fit.
8. PAYMENT OF MORTGAGE TAXES. Mortgagor shall pay all taxes imposed
pursuant to Article 11 of the Tax Law or any other statute, order or regulation,
whether said tax is imposed at the time of recording or subsequent thereto. This
obligation shall survive the satisfaction or other termination of this Mortgage.
Mortgagee shall pay the tax imposed by Section 253 1-a(a), if applicable, if the
Mortgaged Property consists of real property principally improved or to be
improved by one or more structures containing in the aggregate not more than six
residential units, each dwelling unit having its own separate cooking
facilities.
9. STATEMENT OF AMOUNT DUE. Mortgagor, within five (5) days upon request
in person or within fifteen (15) days upon request by mail, will furnish a
written statement duly acknowledged of the amount due on this Mortgage and
whether any offsets or defenses exist against the said indebtedness.
10. NOTICES. Any notices required or permitted to be given hereunder shall
be: (i) personally delivered or (ii) given by registered or certified mail,
postage prepaid, return receipt requested, or (iii) forwarded by overnight
courier service, in each instance addressed to the addresses set forth at the
head of this Mortgage, or such other addresses as the parties may for themselves
designate in writing as provided herein for the purpose of receiving notices
hereunder. All notices shall be in writing and shall be deemed given, in the
case of notice by personal delivery, upon actual delivery, and in the case of
appropriate mail or courier service, upon deposit with the U.S. Postal Service
or delivery to the courier service.
11. WARRANTY OF TITLE. Mortgagor warrants the title to the Premises,
Improvements and Chattels.
12. SALE IN ONE PARCEL. In case of a sale, the Premises may be sold in one
parcel together with the Improvements and Chattels. Should the Premises consist
of more than one parcel, in the event of a foreclosure of this Mortgage or any
mortgage at any time consolidated with this Mortgage, Mortgagor agrees that
Mortgagee shall be entitled to a judgment directing the referee appointed in the
foreclosure proceeding to sell all of the parcels constituting the Premises at
one foreclosure sale, either as a group or separately and that the Mortgagor
expressly waives any right that it may now have or hereafter acquire to (i)
request or require that the parcels be sold separately or (ii) request, if
Mortgagee has elected to sell parcels separately, that there be a determination
of any deficiency amount after any such separate sale or otherwise require a
calculation of whether said parcel or parcels separately sold were conveyed for
their "fair market value".
13. NEGATIVE COVENANTS. Mortgagor will not (i) execute an assignment of
the rents, income or profits, or any part thereof from the Mortgaged Property
except to Mortgagee, or (ii) except where the tenant is in default thereunder,
terminate or consent to the cancellation or surrender of any lease of the
Premises or Improvements or of any part thereof, now existing or hereafter to be
made, having an unexpired term of two (2) years or more, except that any lease
may be canceled provided that promptly after the cancellation or surrender
thereof a new lease is entered into with a new tenant having a credit standing,
in the judgment of the Mortgagee, at least equivalent to that of the tenant
whose lease was canceled, on substantially the same terms as the terminated or
canceled lease, or modify any such lease so as to shorten the unexpired term
thereof or so as to decrease the amount of the rents payable thereunder, or
(iii) accept prepayments of any sums to become due under such leases, except
prepayments of rent for more than one (1) month in advance or prepayments in the
nature of security for the performance of the tenants thereunder, (iv) in any
other manner impair the value of the Mortgaged Property or the security of this
Mortgage or (v) further encumber, alienate, hypothecate, grant a security
interest in or grant any other interest whatsoever in the Mortgaged Property.
Restrictions (ii) and (iii) are made with reference to Section 291-f of the Real
Property Law and actions in violation of those provisions shall be voidable at
the option of the Mortgagee. No rent reserved under any lease of the Premises or
Improvements has been assigned or anticipated, and no rent for any period
subsequent to the date hereof has been collected in advance of the due date
thereof. Mortgagor will not execute any lease of all or a substantial portion of
the Premises or Improvements except for actual occupancy by the tenant
thereunder, and will at all times promptly and faithfully perform, or cause to
be performed, all of the covenants, conditions and agreements contained in all
leases of the Premises or Improvements now or hereafter existing, on the part of
the landlord thereunder to be kept and performed and will at all times do all
things necessary to compel performance by the tenant under each lease of all
obligations, covenants and agreements by such tenant to be performed thereunder.
If any of such leases provide for the giving by the tenant of certificates with
respect to the status of such leases, Mortgagor shall exercise its right to
request such certificates within five (5) days of any demand therefor by
Mortgagee. Mortgagor shall furnish to Mortgagee, upon request of Mortgagee to do
so, a written statement containing the names of all tenants of the Premises or
Improvements, the terms of their respective leases, the space occupied and the
rentals payable thereunder.
14. APPRAISAL. For the purposes of this Section, the following terms shall
be defined as follows:
(a) "Appraisal" shall mean an appraisal of the fair market value of
the Mortgaged Property prepared by an Appraiser.
(b) "Appraiser" shall mean an appraiser selected by Mortgagor and
approved by Mortgagee.
Within ninety (90) days from the date Mortgagee has mailed a written
notice to Mortgagor requesting the same, Mortgagor shall provide Mortgagee, at
Mortgagor's expense, with an Appraisal of the Mortgaged Property. An Appraisal
may be required not more frequently than once every twelve (12) months except
that it may also be required prior to any extension or renewal of the Note or as
otherwise set forth in the Loan Agreement executed on even date.
15. FINANCIAL STATEMENTS. In addition to any requirements elsewhere in the
Loan Documents, Mortgagor shall provide the Mortgagee with the following
financial statements during the term hereof:
(a) Annual audited financial statements of the Mortgagor prepared on
a consolidated basis within 90 days after the end of each applicable fiscal year
by an independent CPA satisfactory to Mortgagee, in accordance with GAAP;
(b) Annual Form 10K of Mortgagor within 90 days of each fiscal year
end;
(c) Quarterly review quality consolidated financial statements and
Form 10Q within 60 days of each quarter end;
(d) Management prepared annual, within ninety (90) days of each
fiscal year end, and quarterly, within sixty (60) days of each quarter end,
consolidating financial statements;
(e) Simultaneous with the delivery of the annual and quarterly
financial statements referred to above, a certificate will be furnished to
Mortgagee executed by a duly authorized officer of the Mortgagor setting forth
computations in detail reasonably satisfactory to Mortgagee demonstrating
compliance with the financial covenants set forth in that certain Loan Agreement
executed by Mortgagor and Mortgagee dated on even date herewith and certifying
that, to the best of his/her knowledge, no default or Event of Default has
occurred or is occurring or, in the event a default or Event of Default has
occurred or is occurring, then how same will be cured within thirty (30) days.
For purposes of the Loan covenants, all accounting terms shall be defined
according to generally accepted accounting principles (GAAP) definitions;
(f) An annual budget for the upcoming year to include projected
Profit and Loss Statements and a Balance Sheet, such budget to be delivered with
the year-end financial statements;
(g) Such other financial documentation as Mortgagee may reasonably
require.
16. BOOKS AND RECORDS.
(a) In addition to any requirements elsewhere in the Loan Documents,
Mortgagor shall keep and maintain at all times at Mortgagors' addresses stated
in this Mortgage, or such other place as Mortgagee may approve in writing,
complete and accurate books of accounts and records adequate to reflect
correctly the results of the operation of the Mortgaged Property and copies of
all written contracts, leases and other instruments which affect the Mortgaged
Property. Such books, records, contracts, leases and other instruments shall be
subject to examination and inspection at any reasonable time by Mortgagee.
(b) Upon request of Mortgagee in writing, Mortgagor shall promptly
provide Mortgagee with all documents reasonably requested by Mortgagee prepared
in the form and manner called for in such request and as may reasonably relate
to the operation or condition thereof, or the financial condition of Mortgagor
or any party obligated on the Note, including, without limitation, all leases or
leasehold interests granted to or by Mortgagor, rent rolls and tenant lists,
rent and damage deposit ledgers, operating statements, profit and loss
statements and balance sheets, personal financial statements of Mortgagor or
income tax returns (including quarterly returns), any or all of which documents
shall be audited or certified as true and accurate by a certified public
accountant, if requested by Mortgagee, and shall cover such period or periods as
may be specified by Mortgagee.
(c) In addition, Mortgagor shall promptly furnish or cause to be
furnished to Mortgagee, to the extent any tenant prepares the same or the same
are required by any tenant's lease, annual financial statements of any tenant of
the Mortgaged Property where such tenant leases fifteen (15%) percent or more of
the gross leasable area of the Improvements, each such statement to be delivered
as soon as practicable following the end of each fiscal year of such tenant, but
in any event within one hundred twenty (120) days thereafter, and each such
statement to include balance sheets, statements of operations and statements of
changes in financial position as of the end of such year.
17. FUTURE LAWS. In the event of the passage after the date of this
Mortgage of any federal, state or municipal law, deducting from the value of
land for the purposes of taxation any lien thereon, or changing in any way, the
laws for the taxation of mortgages or debts secured by mortgages, or the manner
of collection of any such taxes, so as to affect Mortgagee, this Mortgage, or
said indebtedness, Mortgagee shall have the right to give thirty (30) days'
written notice to Mortgagor requiring the payment of said indebtedness. If such
notice be given, said indebtedness shall become due, payable and collectible at
the expiration of said thirty (30) days.
18. INTENTIONALLY OMITTED.
19. PROVISIONS REGARDING USE OF MORTGAGED PROPERTY. Mortgagor warrants and
represents that:
(a) Mortgagor is not responsible for any action or omission, and
does not know of any action or omission by any prior owner, that would cause the
Mortgaged Property to be subject to forfeiture pursuant to any law, rule or
regulation (a "Forfeiture").
(b) The Mortgaged Property has not been acquired with any proceeds
from a transaction or an activity that would cause the Mortgaged Property to be
subject to Forfeiture.
Mortgagor covenants that Mortgagor will not use, and will not permit
any third party to use, the Mortgaged Property or any portion thereof or
interest therein for any purpose or activity that would cause a Forfeiture
thereof.
20. ACTIONS AND PROCEEDINGS. If any action or proceeding be commenced to
which action or proceeding Mortgagee is made a party and in which it becomes
necessary in the opinion of Mortgagee to defend or uphold the lien of this
Mortgage, all sums paid by Mortgagee for the expense of any litigation to
prosecute and defend the rights and lien created by this Mortgage, including
reasonable counsel fees, costs and allowances, shall, together with interest
thereon be a lien on the Mortgaged Property and secured by this Mortgage and
shall be collectible in like manner as said indebtedness and shall be paid by
Mortgagor on demand.
21. SECURITY INTEREST UNDER THE UNIFORM COMMERCIAL CODE. Mortgagee is
authorized to sign as the agent of Mortgagor such agreement in addition to this
Mortgage as Mortgagee at any time may deem necessary or proper or require to
grant to Mortgagee a perfected security interest in the Chattels. Mortgagor
hereby authorizes Mortgagee to file financing statements (as such term is
defined in said Uniform Commercial Code) with respect to the Chattels, at any
time, without the signature of Mortgagor. Mortgagor will, however, at any time
upon request of Mortgagee, sign such financing statements. Mortgagor will pay
all filing fees for the filing of such financing statements and for the refiling
thereof at the times required, in the opinion of Mortgagee, by said Uniform
Commercial Code. If the lien of this Mortgage be subject to any security
agreement covering the Chattels, then in the event of any default under this
Mortgage, all the right, title and interest of Mortgagor in and to any and all
of the Chattels is hereby assigned to Mortgagee, together with the benefit of
any deposits or payments now or hereafter made thereof by Mortgagor or the
predecessors or successors in title of Mortgagor in the Mortgaged Property.
22. CONDEMNATION. Any and all awards heretofore and hereafter made to
Mortgagor and all subsequent owners of the Mortgaged Property by any
governmental or other lawful authorities for the taking by eminent domain of the
whole or any part of the Mortgaged Property or any easement therein, including
any awards for any changes of grade of streets, are hereby assigned to
Mortgagee, who is hereby authorized to collect and receive the proceeds of any
such awards from such authorities, to give proper receipts and acquittances
therefor and to apply the same toward the payment of the amount owing on account
of this Mortgage and said indebtedness, notwithstanding the fact that the amount
owing thereon may not then be due and payable provided, however, if such award
is less than $100,000 it shall be paid over to the Mortgagor for the repair if
any damages resulting from such taking; and Mortgagor hereby covenants and
agrees, upon request, to make, execute and deliver any and all assignments and
other instruments sufficient for the purpose of assigning the aforesaid awards
to Mortgagee free, clear and discharged of any and all encumbrances of any kind
or nature whatsoever. Mortgagor shall continue to make all payments required by
the Note until any such award shall have been actually received by Mortgagee and
any reduction in said indebtedness resulting from the application by Mortgagee
of such award shall be deemed to take effect only on the date of such receipt.
Notwithstanding the foregoing, if any one or more of the portions of the
Mortgaged Property described in subparagraphs (a), (b) and (c) below shall be
damaged or taken through condemnation, either temporarily or permanently, then
the entire balance due under the Note and any other Loan Documents shall, at the
option of Mortgagee, become immediately due and payable:
(a) Any portion or portions of the Improvements or the support
or foundation of any portion or portions of the Improvements; or
(b) Ten (10%) percent or more of any parking area; or
(c) Any portion or portions of the Premises which, when so damaged
or taken, would result either in (i) an impairment of access to the Improvements
from the publicly dedicated rights of way now adjoining the Premises, or (ii)
the failure of the Improvements to comply with any building code, zoning or
other governmental laws or regulations, lease or other agreement to which the
Mortgaged Property is subject.
Mortgagor authorizes Mortgagee, at Mortgagee's option, as attorney in fact
for Mortgagor, to commence, appear in and prosecute in Mortgagor's or
Mortgagee's name, any action or proceeding relating to any condemnation or other
taking of the Mortgaged Property and to settle or compromise any claim in
connection with such condemnation or other taking.
23. TITLE TO MORTGAGED PROPERTY. Mortgagor is now the owner of the
Mortgaged Property upon which this Mortgage is a valid first lien for the amount
above specified, with interest thereon at the rate set forth in the Note and
there are no defenses or offsets to this Mortgage or to the said indebtedness.
24. LEASES OF THE MORTGAGED PROPERTY. Mortgagor will not lease all or any
portion of the Mortgaged Property or amend, modify or terminate (except to the
extent permitted under paragraph 13(ii) hereof) any now existing or future lease
of the Mortgaged Property without the prior written consent of Mortgagee.
Notwithstanding the foregoing, all leases covering more than fifteen percent
(15%) of the gross leasable area of the Mortgaged Property (if the Mortgaged
Property is improved rental property) must require the tenant thereunder to
provide Mortgagee with annual financial statements of the tenant certified to by
an independent certified public accountant. Mortgagor, at Mortgagee's request,
shall furnish Mortgagee with executed copies of all leases hereafter made of all
or any part of the Mortgaged Property, and all leases now or hereafter entered
into will be in form and substance subject to the approval of Mortgagee. Upon
Mortgagee's request, Mortgagor shall make a separate and distinct assignment to
Mortgagee, as additional security, of all leases hereafter made a part of the
Mortgaged Property.
25. TRANSFER OF MORTGAGED PROPERTY. In the event that (a) any entity then
having a lesser credit rating than Mortgagor shall acquire beneficial ownership
of a majority interest in the voting stock of Mortgagor, (b) the Mortgagor shall
merge with such an entity and shall not be the surviving corporation, or (c) the
Mortgaged Property or a part thereof, while this Mortgage shall remain a lien
thereon, shall be sold, conveyed or transferred by deed, any other voluntary or
involuntary act or by operation of law or otherwise, the full balance of the
indebtedness then remaining unpaid, with interest, shall at the option of the
Mortgagee, or its assigns, be immediately due and payable without notice or
demand unless the prior written consent of the Mortgagee to such acquisition,
merger, or sale, conveyance or transfer shall have been obtained. A mortgage of
the Mortgaged Property to any mortgagee other than the Mortgagee shall be deemed
a conveyance for the purpose of this Section.
26. ACCESS. Mortgagee, by its employees or agents, shall at all times have
the right to enter upon the Mortgaged Property during reasonable business hours
for the purpose of examining and inspecting the same.
27. REAL PROPERTY LAW. All covenants hereof, which are in addition to
those set forth in Sections 254 and 291-f of the Real Property Law, shall be
construed as affording to Mortgagee rights additional to, and not exclusive of,
the rights conferred under the provisions of said Sections 254 and 291-f.
28. PERFORMANCE OF MORTGAGOR'S COVENANTS BY MORTGAGEE. In the event of any
default in the performance of any of the covenants, terms, or provisions of
Mortgagor under this Mortgage, which default is not cured within any applicable
cure period, Mortgagee may, at the option of Mortgagee, perform the same and the
cost thereof, with interest, shall immediately be due from Mortgagor to
Mortgagee and secured by this Mortgage.
29. REMEDIES NOT EXCLUSIVE. Mortgagee shall have the right from time to
time, to take action to recover any amounts of past due principal indebtedness
and interest thereon, or any installment of either, or any other sums required
to be paid under the covenants, terms and provisions of this Mortgage or the
Note, as the same become due, whether or not the principal indebtedness secured,
or any other sums secured by the Note or this Mortgage shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for default or defaults by Mortgagor existing
at the time such earlier action was commenced.
30. ADDITIONAL ACTS AND DOCUMENTS. Mortgagor covenants that it will do,
execute, acknowledge, deliver, file and/or record, or cause to be recorded every
and all such further acts, deeds, conveyances, advances, mortgages, transfers
and assurances, in law as Mortgagee shall require for the better assuring,
conveying, transferring, mortgaging, assigning and confirming unto Mortgagee all
and singular the Mortgaged Property.
31. REMEDIES CUMULATIVE. The rights and remedies herein afforded to
Mortgagee shall be cumulative and supplementary to and not exclusive of any
other rights and remedies afforded the holder of this Mortgage and the Note.
32. SUCCESSORS. All of the provisions of this Mortgage shall inure to the
benefit of Mortgagee and of any subsequent holder of this Mortgage and shall be
binding upon Mortgagor and each subsequent owner of the Mortgaged Property.
33. EFFECT OF RELEASES. Mortgagee, without notice, may release any part of
the security described herein, or any person or entity liable for any
indebtedness secured hereby without in any way affecting the lien hereof upon
any part of the security not expressly released, and may agree with any party
obligated on said indebtedness or having any interest in the security described
herein to extend the time for payment of any part or all of the indebtedness
secured hereby. Such agreement shall not in any way release or impair the lien
hereof, but shall extend the lien hereof as against the title of all parties
having any interest in said security, which interest is subject to said lien,
and no such release or agreement shall release any person or entity obligated to
pay any indebtedness secured hereby.
34. WAIVERS. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the covenants, terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the covenants, terms and
provisions of this Mortgage, and Mortgagee, notwithstanding any such failure,
shall have the right thereafter to insist upon the strict performance by
Mortgagor of any and all of the covenants, terms and provisions of this Mortgage
to be performed by Mortgagor. Neither Mortgagor nor any other person or entity
now or hereafter obligated for the payment of the whole or any part of said
indebtedness shall be relieved of such obligation by reason of (i) the failure
of Mortgagee to comply with any request of Mortgagor, or of any other person or
entity so obligated, (ii) the failure of Mortgagee to take action to foreclose
this Mortgage or otherwise enforce any of the covenants, terms and provisions of
this Mortgage or the Note, (iii) the release, regardless of consideration, of
the whole or any part of the security held for payment of said indebtedness or
(iv) any agreement or stipulation between any subsequent owner or owners of the
Mortgaged Property and Mortgagee modifying the covenants, terms and provisions
of this Mortgage or the Note without first having obtained the consent of
Mortgagor or such other person or entity. In the last mentioned event, Mortgagor
and all such other persons or entities shall continue liable to make such
payments according to the terms and provisions of any such agreement or
extension or modification unless expressly released and discharged in writing by
Mortgagee. Mortgagee may release, regardless of consideration, any part of the
security held for payment of said indebtedness without, as to the remainder of
the security, in any way impairing or affecting the lien of this Mortgage or the
priority of such lien over any subordinate lien. Mortgagee may resort for the
payment of said indebtedness to any other security therefor held by Mortgagee in
such order and manner as Mortgagee may elect.
35. INTEREST ON ADVANCES. Wherever, under the provisions of this Mortgage
or by law, Mortgagee is entitled to interest on advances made or expenses
incurred, such interest shall be computed at a rate per annum which shall be the
interest rate payable under the Note.
36. MORTGAGEE NOT OBLIGATED. Nothing herein contained shall be construed
as making the payment of any insurance premiums, taxes or assessments obligatory
upon Mortgagee, although Mortgagee may pay same, or as making Mortgagee liable
in any way for loss, damage or injury, resulting from the non-payment of any
such insurance premiums, taxes or assessments.
37. LIEN LAW. Mortgagor will, in compliance with Section 13 of the Lien
Law, receive the advances secured by this Mortgage and will hold the right to
receive such advances as a trust fund to be applied first for the purpose of
paying the cost of the improvement and will apply the same first to the payment
of the cost of the improvement before using any part of the total of the same
for any other purpose.
38. ENVIRONMENTAL WARRANTIES AND COVENANTS.
(a) Warranties. Mortgagor makes the following representations and
warranties: (i) Mortgagor (or the present owner of the Mortgaged Property, if
different) is in compliance in all respects with all applicable federal, state
and local laws and regulations, including, without limitation, those relating to
toxic and hazardous substances and other environmental matters (the "Laws"),
(ii) no portion of the Mortgaged Property is being used or, to the best of
Mortgagor's knowledge, has been used at any previous time, for the disposal,
storage, treatment, processing or other handling of any hazardous or toxic
substances, in a manner not in compliance with the Laws, (iii) the soil and any
surface water and ground water which are a part of the Mortgaged Property are
free from any solid wastes, toxic or hazardous substance or contaminant and any
discharge of sewage or effluent; and (iv) neither the federal government nor the
State of New York Department of Environmental Conservation or any other
governmental or quasi governmental entity has filed a lien on the Mortgaged
Property, nor are there any governmental, judicial or administrative actions
with respect to environmental matters pending, or to the best of the Mortgagor's
knowledge, threatened, which involve the Mortgaged Property.
(b) Inspection. In the event Mortgagee reasonably believes that an
environmental problem may exist, Mortgagor agrees that Mortgagee or its agents
or representatives may, at any reasonable time and at Mortgagor's expense
inspect Mortgagor's books and records and inspect and conduct any tests on the
Mortgaged Property including taking soil samples in order to determine whether
Mortgagor is in continuing compliance with the Laws.
(c) Agreement to Comply. If any environmental contamination is found
on the Mortgaged Property for which any removal or remedial action is required
pursuant to Law, ordinance, order, rule, regulation or governmental action,
Mortgagor agrees that it will at its sole cost and expense, take such removal or
remedial action promptly and to Mortgagee's satisfaction.
(d) Indemnification. Mortgagor agrees to defend, indemnify and hold
harmless Mortgagee, its employees, agents, officers and directors from and
against any claims, actions, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation,
reasonable attorney and consultant fees, investigations and laboratory fees,
court costs and litigation expenses of whatever kind or nature known or unknown,
contingent or otherwise) arising out of or in any way related to: (i) the past
or present disposal, release or threatened release of any hazardous or toxic
substances on the Mortgaged Property; (ii) any personal injury (including
wrongful death or property damage, real or personal) arising out of or related
to such hazardous or toxic substances; (iii) any lawsuit brought or threatened,
settlement reached or government order given relating to such hazardous or toxic
substances; and/or (iv) any violation of any law, order, regulation,
requirement, or demand of any government authority, or any policies or
requirements of Mortgagee, which are based upon or in any way related to such
hazardous or toxic substances.
(e) Other Sites. Mortgagor knows of no on-site or off-site locations
where hazardous or toxic substances from the operation of any Improvement or
otherwise have been stored, treated, recycled or disposed of.
(f) Leases. Mortgagor agrees not to lease or permit the sublease of
the Mortgaged Property to a tenant or subtenant whose operations may result in
contamination of the Mortgaged Property with hazardous or toxic substances.
(g) Non-Operation by Mortgagee. Mortgagor acknowledges that any
action Mortgagee takes under this Mortgage shall be taken to protect Mortgagee's
security interest only; Mortgagee does not hereby intend to be involved in the
operations of the Mortgagor.
(h) Compliance Determinations. Mortgagor acknowledges that any
determinations Mortgagee makes under this Section regarding compliance with
environmental laws shall be made for Mortgagee's benefit only and are not
intended to be relied upon by any other party.
(i) Survival of Conditions. The provisions of this Section shall be
in addition to any other obligations and liabilities Mortgagor may have to
Mortgagee at common law, and shall survive the transactions contemplated herein.
(j) Other Insurance. Mortgagor shall carry adequate insurance to
fulfill Mortgagor's obligations under this Section if required by law.
(k) Definitions. The term "hazardous substance" shall include,
without limit, any substance or material defined in 42 U.S.C. Section 9601 (as
the same may be amended from time to time), the Hazardous Materials
Transportation Act (as amended from to time), and the New York Environmental
Conservation Law or the Resource Conservation And Recovery Act (as each may be
amended from time to time) and in any regulations adopted or publications
promulgated pursuant to any of the foregoing.
39 EVENTS OF DEFAULT. The whole of the principal sum of the indebtedness
secured hereby and interest thereon, and all other sums due and payable
hereunder shall become due, at the option of Mortgagee, if one or more of the
following events (an "Event of Default") shall happen:
(a) The occurrence of an "Event of Default" under the Note; or
(b) If Mortgagor defaults in the payment of any tax, water rate or
sewer rent or payment under any Pilot Agreement against the Mortgaged Property
for thirty (30) days after the same become due and payable or fails to exhibit
to Mortgagee, within thirty (30) days after demand, receipts showing payment of
all taxes, water rates or sewer rents; or
(c) The actual or threatened removal, demolition or structural
alteration, in whole or in part, of any Improvement, without the prior written
consent of Mortgagee; or the removal, demolition or destruction in whole or in
part, of any Chattels without replacing the same with Chattels at least equal in
quality and condition to those replaced, free from any security interest or
other encumbrance thereon and free from any reservation of title thereto; or the
commission of any waste in respect to the Mortgaged Property; or
(d) Failure of Mortgagor to pay within thirty (30) days after notice
and demand any installment of any assessment made against the Premises for local
improvements, heretofore or hereafter made, which assessment is, or may become,
a lien on the Premises prior to the lien of this Mortgage, notwithstanding the
fact that such installment be not due and payable at the time of such notice and
demand; or
(e) Failure of Mortgagor to pay the said indebtedness secured by
this Mortgage within (30) days after notice and demand, in the event of the
passage after the date of this Mortgage of any federal, state or municipal law
deducting from the value of land for the purpose of taxation any lien thereon,
or changing in any way the laws now in force for the taxation of mortgages, or
of debts secured by mortgages, or the manner of collection of any such taxes, so
as to affect Mortgagee, this Mortgage or the indebtedness which is secured,
notwithstanding that Mortgagor, before or after such notice, may have the option
to pay or contest the payment of such tax; or
(f) Failure of Mortgagor to maintain the Improvements on the
Premises in a rentable or tenantable state of repair to the satisfaction of
Mortgagee, for thirty (30) days after notice of such failure has been given to
Mortgagor, or to comply with any order or requirement of any municipal, state,
federal or other governmental authority having jurisdiction of the Premises
within thirty (30) days after such order or requirement shall have been issued
by any such authority; or failure of Mortgagor or of any tenant holding under
Mortgagor, to comply with any and all and singular the statutes, requirements,
orders or decrees of any federal, state or municipal authority relating to the
use of the Mortgaged Property, or of any part thereof; or failure of Mortgagor
to observe and timely perform all of the covenants, terms and provisions
contained in any lease now or hereafter affecting the Premises or the
Improvements or any portion thereof, on the part of the landlord to be observed
and performed; or
(g) Failure of Mortgagor, in the event of the entry of a final
judgment for the payment of money against Mortgagor, to discharge such judgment
or to have it stayed pending appeal within thirty (30) days from the entry
thereof, or if such judgment shall be affirmed on appeal, the failure to
discharge such judgment within thirty (30) days from the entry of such
affirmance; or
(h) Failure of Mortgagor to pay within thirty (30) days after notice
and demand any filing or refiling fees required hereunder; or
(i) Failure of Mortgagor or any occupant of the Mortgaged Property,
to allow or permit Mortgagee, or its duly authorized agent, to inspect said
Mortgaged Property at any time and from time to time during reasonable business
hours; or
(j) Default for thirty (30) days after notice and demand in the
observance or performance of any other covenant or agreement under this
Mortgage.
40 INTEREST TO ACCRUE. If the whole of the principal sum evidenced by the
Note and interest, shall become due by exercise of the option of the Mortgagee
after default by the Mortgagor under any of the terms, covenants and conditions
of this Mortgage and/or the Note, or if the whole of said principal sum and
interest shall mature and become due under the terms, covenants and conditions
of this Mortgage and the Note regardless of default, if any, on the part of the
Mortgagor, then interest on said principal sum shall continue to accrue at the
rate provided for in the Note, and in this Mortgage, until said principal sum is
fully paid.
41 FLOOD INSURANCE. In addition to the terms and provisions of this
Mortgage with regard to insurance, in the event the Premises are determined to
be in a special flood hazard area as determined by any governmental agency,
Mortgagor further covenants and agrees to fully insure the Premises and
Improvements against loss or damage by flood, with coverage as is therein
provided for by fire and other specified perils to the same extent and effect as
if such flood insurance was therein specifically set forth.
42 COSTS, EXPENSES AND ATTORNEY'S FEES. Should one or more Events of
Default occur hereunder, and should an action be commenced for the foreclosure
of this Mortgage, Mortgagee shall be entitled to recover all sums due hereunder,
statutory costs, and any additional allowances made pursuant to Section 8303(a)
of the Civil Practice Law and Rules of the State of New York, and in addition
thereto, reasonable attorneys' fees in such proceeding and in all proceedings
related thereto necessary to and related to the foreclosing proceeding, and such
amount shall be added to the principal balance and interest then due and shall
be a lien on the Mortgaged Property prior to any right or title to, interest in
or claim upon the Mortgaged Property attaching and accruing subsequent to the
lien of this Mortgage, and shall be deemed to be secured by this Mortgage and
the indebtedness which it secures.
43 INTERVENING LIENS. Should any agreement be hereafter entered into
modifying or changing the terms of this Mortgage or the Note secured hereby in
any manner, the rights of the parties to such agreement shall be superior to the
rights of the holder of any intervening lien.
44 TERMS. It is understood and agreed that the words, "Mortgagor" and
"Mortgagee" herein shall include the respective heirs, successors and assigns of
Mortgagor and Mortgagee.
45 ENTIRE AGREEMENT. This Mortgage and the other Loan Documents
constitute the entire understanding between Mortgagor and Mortgagee and to the
extent that any writings not signed by Mortgagee or oral statements or
conversations at any time made or had shall be inconsistent with the provisions
of this Mortgage and the other Loan Documents, the same shall be null and void.
46 GOVERNING LAW; SEVERABILITY. This Mortgage shall be governed by the
law of the jurisdiction in which the Mortgaged Property is located. In the event
that any provision or clause of this Mortgage or the Note conflicts with
applicable law, such conflict shall not affect other provisions of this Mortgage
or the Note which can be given effect without the conflicting provision, and to
this end, the provisions of this Mortgage and the Note are declared to be
severable.
47 TIME OF THE ESSENCE. Time is of the essence with respect to each and
every covenant, agreement and obligation of Mortgagor under this Mortgage, the
Note and any and all other Loan Documents.
48 INDEMNIFICATION; SUBROGATION; WAIVER OF OFFSET.
(a) Mortgagor shall indemnify, defend and hold Mortgagee harmless
against: (i) any and all claims for brokerage, leasing, finders or similar fees
which may be made relating to the Mortgaged Property or the loan which is the
subject of the Note, and (ii) against any and all liability, obligations,
losses, damages, penalties, claims, actions, suits, costs, and expenses
(including its reasonable attorneys' fees, together with reasonable appellate
counsel fees, if any) of whatever kind or nature which may be imposed on or
incurred by Mortgagee at any time pursuant either to a judgment or decree or
other order entered into by a court or administrative agency or to a settlement
reasonably approved by Mortgagor, which judgment, decree, order or settlement
relates in any way to or arises out of the offer, sale or lease of the Mortgaged
Property and/or the ownership, use, occupation or operation of any portion of
the Mortgaged Property.
(b) If Mortgagee is made a party defendant to any litigation
concerning the loan which is the subject of the Note, this Mortgage, the
Mortgaged Property, or any part thereof, or any interest therein, or the
occupancy thereof, then Mortgagor shall indemnify, defend and hold Mortgagee
harmless from all liability by reason of said litigation, including reasonable
attorneys' fees (together with reasonable appellate counsel fees, if any) and
expenses incurred by Mortgagee in any such litigation, whether or not any such
litigation is prosecuted to judgment. If Mortgagee commences an action against
Mortgagor to enforce any of the terms hereof or to prosecute any breach by
Mortgagor of any of the terms hereof or to recover any sum secured hereby,
Mortgagor shall pay to Mortgagee such reasonable attorneys' fees (together with
reasonable appellate counsel fees, if any) and expenses. The right to such
attorneys fees (together with reasonable appellate counsel fees, if any) and
expenses shall be deemed to have accrued on the commencement of such action, and
shall be enforceable whether or not such action is prosecuted to judgment. If
Mortgagor breaches any term of this Mortgage, Mortgagee may employ an attorney
or attorneys to protect its rights hereunder, and in the event of such
employment following any breach by Mortgagor, Mortgagor shall pay Mortgagee
reasonable attorneys' fees (together with reasonable appellate counsel fees, if
any) and expenses incurred by Mortgagee, whether or not an action is actually
commenced against Mortgagor by reason of such breach.
(c) A waiver of subrogation shall be obtained by Mortgagor from its
property insurance carrier and, consequently, Mortgagor waives any and all right
to claim or recover against Mortgagee, its officers, employees, agents and
representatives, for loss of or damage to Mortgagor, the Mortgaged Property,
Mortgagor's property or the property of others under Mortgagor's control from
any cause insured against or required to be insured against by the provisions of
this Mortgage.
(d) All sums payable by Mortgagor hereunder shall be paid without
notice (except as may otherwise be provided herein), demand, counterclaim,
set-off, deduction or defense and without abatement, suspension, deferment,
diminution or reduction, and the obligations and liabilities of Mortgagor
hereunder shall in no way be released, discharged or otherwise affected by
reason of: (i) any damage to or destruction of or any condemnation or similar
taking of the Mortgaged Property or any part thereof; (ii) any restriction or
prevention of or interference with any use of the Mortgaged Property or any part
thereof; (iii) any title defect or encumbrance or any eviction from the Premises
or the Improvements or any part thereof by title superior or otherwise; (iv) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation, or other like proceeding relating to Mortgagee, or any action taken
with respect to this Mortgage by any trustee or receiver of Mortgagee, or by any
court, in such proceeding; (v) any claim which Mortgagor has, or might have,
against Mortgagee; (vi) any default or failure on the part of Mortgagee to
perform or comply with any of the terms hereof or of any other agreement with
Mortgagor; or (vii) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not Mortgagor shall have notice or
knowledge of any of the foregoing. Mortgagor waives all rights now or hereafter
conferred by statute or otherwise to any abatement, suspension, deferment,
diminution, or reduction of any sum secured hereby and payable by Mortgagor.
49 WAIVER OF JURY TRIAL. The Mortgagor and the Mortgagee hereby waive
trial by jury in any litigation in any court with respect to, in connection
with, or arising out of this Mortgage or any other Loan Document, or any
instrument or document delivered in connection with the loan which is the
subject of the Note, or the validity, protection, interpretation, collection or
enforcement thereof, or the relationship between Mortgagor and Mortgagee as
borrower and lender, or any other claim or dispute howsoever arising between the
Mortgagor and Mortgagee.
50 TAX LAW SECTION 253 STATEMENT. Check one box only.
[ ] This Mortgage covers real property principally improved or to be
improved by one or more structures containing in the aggregate not
more than six residential dwelling units, each having their own
separate cooking facilities.
[ X ] This Mortgage does not cover real property improved as described
above.
Where used herein, the word, "Mortgagor" may be read "Mortgagors" where
applicable.
IN WITNESS WHEREOF, this Mortgage has been duly executed by Mortgagor.
VICON INDUSTRIES, INC.
By:___________________________
Kenneth M. Darby, President
STATE OF NEW YORK )
) SS.:
COUNTY OF SUFFOLK )
On the 29th day of January, 1998, before me personally came KENNETH M.
DARBY, to me known, who being by me duly sworn, did depose and say that he has a
business address c/o Vicon Industries, Inc., 89 Arkay Boulevard, Hauppauge, New
York; that he is the President of VICON INDUSTRIES, INC., the corporation
described in and which executed the foregoing instrument, and he signed his name
thereto by order of said corporation.
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NOTARY PUBLIC