Preview
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
EXHIBIT “B”
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
MEZZANINE LOAN AGREEMENT
in the amou=t of up to $3,000,000.00
Between
HELLO LIVING DEVELOPER NOSTRAND LLC
and
1580 NOSTRAND MEZZ LLC
Dated as of: August 28, 2020
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
MEZZANINE LOAN AGREEMENT
THIS MEZZANINE LOAN AGREEMENT ("Agreement") dated as of the 28th
day of August, 2020, is made by and between HELLO LIVING DEVELOPER NOSTRAND
LLC, a New York limited liability company, having an address at 33 35th Street, 6th Floor, Suite
B-613, Brooklyn, NY 11232 ("Borrower"), and 1580 NOSTRAND MEZZ LLC, a Delaware
limited liability company, its successors and/or assigns, as their interests may appear, having
offices at 520 Madison Avenue, Suite 3501, New York, NY 10022 ("Lender").
E11N E fiE I][:
WHEREAS, on December 6, 2017, HELLO NOSTRAND LLC, a New York limited
liability company (the "Mortgage Borrower"), gave an Amended, Restated and Consolidated
Senior Loan Promis:sory Note (the "First Land Mortgage Note") to PROPHET MORTGAGE
OPPORTUNITIES LP (the "Original Mortgage Lender"), in the principal sum of
$17,730,000.00 (the "First Land Mortgage Loan");
WHEREAS, for the purposes of securing the Land Mortgage Note, on December 6, 2017,
Mortgage Borrower executd and delivered a certain Consolidation, Extension and Modification
of Senior Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing
in the principal sum of $17,730,000.00 (the "First Land Mortgage"), wherein Mortgage
Borrower mortgaged in favor of Original Mortgage Lender the premises commonly known as 1580
Nostrand Avenue, Brooklyn, New York 11226 (the "Property"), as further described in the Land
Mortgage, as well as certain other documents, including, without limitation, that certain Senior
Loan Agreement dated as of December 6, 2017 (the "First Senior Loan Agreement"), executed
by certain third parties as additional security for the repayment of the sums due under the Land
Mortgage Note and Land Mortgage (collectively, including the Land Mortgage Note, the Land
Mortgage, and the Senior Loan Agreement, the "First Land Mortgage Loan Documents"),
which First Land Mortgage Loan Documents were thereafter assigned by an Assignment of
Consolidation, Extension and Modification of Senior Loan Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing and Senior Loan Collateral Assignment of Leases
and Rents dated June 7, 2019 by Original Mortgage Lender to 1580 NOSTRAND AVE LLC, a
Delaware limited liability company (collectively, together with its successors and/or assigns, the
"Mortgage Lender");
WHEREAS, on December 6, 2017, Mortgage Borrower gave a Building Loan Promissory
Note (the "Bundig Mortgage Note") to Original Mortgage Lender in the principal sum of up to
$39,770,000.00 (the "Building Mortgage Loan");
WHEREAS, for the purposes of securing the Building Mortgage Note, on December 6,
2017, Mortgage Borrower executed and delivered a certain Building Loan Mortgage, Assignment
of Leases and Rents, Security Agreement and Fixture Filing in the principal sum of up to
2
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
$39,770,000.00 (the "Building Mortgage"), wherein Mortgage Borrower mortgaged in favor of
Original Mortgage Lender the Property, as well as certain other documents, including, but not
limited to, that certain Building Loan Agreement (the "Building Loan Agreement"), executed by
certain third parties as additional security for the repayment of the sums due under the Building
Mortgage Note and the Building Mortgage (collectively, including the Building Mortgage Note,
the Building Mortgage and the Building Loan Agreement, the "Building Mortgage Loan
Documents"), which Building Mortgage Loan Documents were thereafter assigned by an
Assignmeñt of Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing and Building Loan Collateral Assignment of Leases and Rents dated June 7,
2019 by Original Mortgage Lender to Mortgage Lender;
WHEREAS, on December 6, 2017, Mortgage Borrower gave a Project Loan Promissory
Note (the "Project Mortgage Note") to Original Mortgage Lender in the principal sum of up to
$5,500,000.00 (the "Project Mortgage Loan");
WHEREAS, for the purposes of securing the Project Mortgage Note, on December 6,
2017, Mortgage Bonower executed and delivered a certain Project Loan Mortgage, Assignment
of Leases and Rents, Security Agreement and Fixture Filing in the principal sum of up to
$5,500,000.00 (the "Project Mortgage"), wherein Mortgage Borrower mortgaged in favor of
Original Mortgage Lender the Property, as well as certain other documents, including, but not
Agreement"
limited to, that certain Project Loan Agreement (the "Project Loan and, together
with the First Land Loan Agreement and the Building Loan Agreement, the "Mortgage Loan
Agreement"), executed by certain third parties as additional security for the repayment ofthe sums
due under the Project Mortgage Note and Project Mortgage (collectively, including the Project
Mortgage Note, the Project Mortgage and the Project Loan Agreement, the "Project Mortgage
Loan Documents"), which Project Mortgage Loan Documents were thereafter assigned by an
Assign-ment of Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing and Project Loan Collateral Assignment of Leases and Rents dated June 7, 2019 by
Original Mortgage Lender to Mortgage Lender;
WHEREAS, on the date hereof, Mortgage Borrower gave a Mortgage Loan Note (the
"Second Land Mortgage Note", and together with the First Land Mortgage Note, the Building
Mortgage Note and the Project Mortgage Note, hereinafter, collectively, the "Mortgage Note") to
Mortgage Lender in the principal sum of up to $8,300,000.00 (the "Sccond Land Mortgage
Loan", and together with the First Land Mortgage Loan, the Building Mortgage Loan and the
Project Mortgage Loan, hereinafter, collectively, the "Mortgage Loan");
WHEREAS, for the purposes of securing the Second Land Mortgage Note, on the date
hereof, Mortgage Borrower executed and delivered a certain Mortgage and Security Agreement in
the principal sum of up to $8,300,000.00 (the "Second Land Mortgage", and together with the
First Land Mortgage, the Building Mortgage, and the Project Mortgage, hereinafter, collectively,
the "Mortgage"), wherein Mortgage Borrower mortgaged in favor of Mortgage Lender the
3
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
Property, as well as certain other documents executed by certain third parties as additional security
for the repayment of the sums due under the Second Land Mortgage Note and Second Land
Mortgage (collectively, including the Second Land Mortgage Note and the Second Land
Mortgage, the "Second Land Mortgage Loan Documents", and together with the First Land
Mortgage Loan Documents, the Building Mortgage Loan Documents and the Project Mortgage
Loan Documents, hereinafter, collectively, as amended by the Forbearance Agreement, the
"Mortgage Loan Documents");
WHEREAS, as of the date hereof, Borrower, Lender, Mortgage Borrower, Mortgage
Lender, and Guarantor entered into that certain Forbearance Agreement relating to certain defaults
under the First Land Mortgage Loan, the Building Mortgage Loan, and the Project Mortgage Loan
(the "Forbearance Agrcem=‡"); each and every reference to the First Land Mortgage Loan
Documents, the Building Mortgage Loan Documents, and the Project Mortgage Loan Documents
described in the foregoing recitals, as such references appear below in this Agreement and in the
other Loan Documents, shall be interpreted to mean such First Land Mortgage Loan Documents,
Building Mortgage Loan Documents, and Project Mortgage Loan Documents as amended by the
Forbearance Agreement;
WHEREAS, Borrower is the direct beneficial owner of all of the membership interests in
Mortgage Borrower (collectively, the "Pledged Interests");
WHEREAS, Borrower has requested Lender to make a loan to it in the principal amount
of up to $3,000,000.00 (the "Loan"), which Loan is evidenced by that certain Mezzanine
Promissory Note executed by Borrower in favor of Lender (the "Note");
WHEREAS, as a condition precedent to the obligation of Lender to make the Loan to
Borrower, Borrower has entered into that certain Ownership Interests Pledge and Security
Agreement, dated as of the date hereof, in favor of Lender (as amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement"), pursuant to which Borrower has granted
to Lender a first priority security interest in the Collateral (as hereinafter defiñed) as collateral
security for the Debt (as hereinafter defined) (the Pledge Agreement, together with the Note, this
Agreement, and allother documents and guarantees executed by Borrower and Guarantor and any
other party in favor of Lender in connection with the Loan, hereinafter, the "Loan Decuments");
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance
with the terms of this Agreement and the other Loan Documents (as hereinafter defined).
Now, therefore, in consideration of the premises and mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
4
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
ARTICLE I
DEFINITIONS
Use of or reference to the following terms herein shall be construed as indicated
below. All other capitalized terms used but not otherwise defined in this Article I shall have the
meanings ascribed to such terms in this Agreement the Pledge Agreemelit or the Note:
1.1 Advance: Any disbursement of a portion of the Loan by Lender pursuant
to the terms hereof.
1.2 Affiliate: As to any Person, any other Person that, (i) directly or indirectly,
owns ten percent (10%) or more of the direct or indirect legal, beneficial or economic interests in
such Person, (ii) directly or indirectly, is in Control of, is Controlled by or is under common
Control with such Person, (iii) is a director or officer of such Person or of an Affiliate of such
Person, or (iv) is the spouse, issue or parent of such Person or of an Affiliate of such Person.
1.3 Architect: Ryan Min, or such architect as approved by Lender in its sole but
commercially reasonable discretion.
1.4 Architect's Agreement: That certain AIA Document B101-2007 Standard
Form of Agreement between Owner and Architect dated as of , between
Mortgage Borrower and the Architect, as the same may be amended, restated, extended or
otherwise modified from time to time in accordaiice with this Agreement or as otherwise approved
by Lender in its reasonable discretion.
1.5 Budget: Borrower's estilliate of the cost to construct the Improvements,
which estimate has been delivered to Lender, as the same may be revised from time to time in
accordance with the terms of this Agreement or with Lender's approval in itsreasonable discretion.
1.6 Budgeted Amount: The portion of the Loan that Borrower expects to be
advanced for any particular line item of Costs, as set forth in the Budget.
1.7 Business Day: Any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to close.
1.8 Casualty: The occurrence of any casualty, damage or injury, by fire or
otherwise, to the Property or any part thereof.
1.9 Collateral: The Pledged Interests, and all ainouilts on deposit in any reserve
account established under the Loan Documents and any and all other property or collateral in
5
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
which Lender is granted a security interest under any ofthe Loan Documents, in each case whether
existing on the date hereof or hereafter pledged or assigned to Lender.
1.10 Collateral Documents: The Pledge Agreement; any Uniform Commercial
Code financing statements filed in connection with the Pledge Agreemeñt; the Guaranty; and any
and all other loan documents executed by the Borrower for the benefit of Lender in coññection
with the Loan.
1.11 Condemnation: A temporary or permanent taking by any Govemmêñtal
Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or
eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the Property or any part
thereof.
1.12 Construction Manager: Supreme Builders & Developers LLC, or such
general contractor or construction rñâñager as approved by Lender in its sole but commercially
reasonable discretion.
1.13 Construction Work: The construction of the Project, which is to be carried
out by Mortgage Borrower using the proceeds of the Loan, Mortgage Borrower's funds and
Borrower's funds, in compliance with the Budget.
1.14 Costs: Hard Costs and/or Soft Costs, individually and collectively, as the
case may be.
1.15 Debt: The outstanding principal amount set forth in,and evidêñced by, this
Agreement and the Note together with all interest accrued and unpaid thereon and all other sums
due to Lender in respect of the Loan under the Note, this Agreement, the Pledge Agreement or any
other Loan Document.
1.16 Environmental Laws: This term has the meaning ascribed thereto in that
certain Environmental Indemnity Agreement executed by Borrower and Guarantor of even date
herewith, in favor of Lender.
1.17 Existing Mortgage Loan Documents: Collectively, the First Land Mortgage
Loan Documents, the Building Mortgage Loan Documents, and the Project Mortgage Loan
Documents.
1.18 Fundine Date: The date on which an Advance is actually disbursed.
1.19 Govemmental Authority: Any court, board, agency, commission, office or
other authority of any nature whatsoever for any governmental unit (foreign, federal, state, county,
6
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
district, municipal, city or otherwise) whether now or hereafter in existence.
1.20 Guarantor: Eli Karp, pursuant to the Guaranty.
1.21 Guaranty: Collectively, (a) the Conditional Guaranty, dated as of the date
hereof, executed and delivered by Guarantor in connection with the Loan to and for the benefit of
Lender, (b) the Completion and Cost Over-Run Guaranty dated as of December 6, 2017, from
Guarantor for the benefit of Original Mortgage Lender, the terms of which are incorporated herein,
as set forth in the Forbearance Agreement, such that Guarantor's has fully guaranteed the
completion of the Construction Work, and (c) that certain Environmental Indemnity Agreement,
dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan to
and for the benefit of Lender, each as the same may be amended, restated, replaced, supplemented
or otherwise modified from time to time.
1.22 Hard Costs: The costs of labor, materials, equipment, as well as any other
improvement"
costs which are "costs of an (as such term is defined in Section 2(5) of the New
York Lien Law), in connection with the completion of the Construction Work as set forth and
itemized in the Budget.
1.23 Improvements: All structures, and buildings and allreplacements thereof,
now or hereafter located or erected upon the Property including all personal property owned by
Mortgage Borrower or Borrower of every kind and nature whatsoever affixed to or forming part
of said structures and/or buildings.
1.24 Lender's Consultant: The appointed designee, agent or contractor of
Lender.
1.25 Legal Requirements: All laws, statutes, treaties, codes, permits, decrees,
ordinances, orders, rules, regulations, determinations, or requirements of any governmental
authority, arbiter or court, including, without limitation, Environmental Laws, building,
any any
. use, zoning and land use laws or r ahns (including set back regairements), and any applicable
covenants and restrictions pursuant thereto.
1.26 Liquidation Event: shall have the meaning set forth in Section 7.1 hereof.
1.27 Loan Amount: Up to THREE MILLION AND 00/100 DOLLARS
($3,000,000.00) in the aggregate.
1.28 Loan Party: Individually and collectively, as the context requires,
Borrower, Mortgage Borrower, and Guarantor.
1.29 Mortgage Loan Default: A failure of Borrower to timely provide Lender
7
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
with either (i) cancelled checks, (ii) bank statements, (iii) or any other proof, reasonably
satisfactory to Lender, evidencing that Mortgage Borrower has made the monthly instalhnent
payment required pursuant to the terms of the Mortgage Loan (the "Proof of Payment"). If
(15th
requested, Borrower shall be required to submit Proof of Payment no later than the fifteenth
day of each calendar month commencing on October 1, 2020 and continuing the fifteenth (15th) Of
each month through the Maturity Date, as same may be extended; provided, however, that for any
monthly installment payment under the Mortgage Loan processed in full by Lender and Mortgage
Lender pursuant to Section 2.5(f) of this Agreement, Borrower shall not be required to submit
proof of such payment.
1.30 Net Liauidation Proceeds After Debt Service: With respect to any
Liquidation Event, all amounts paid to or received by or on behalf of Mortgage Borrower in
connection with such Liquidation Event, including, without limitation, proceeds of any refinancing
described in Section 7.1 (iv) hereof, less (i) in the event of a Liquidation Event consisting of a
Casualty or Condemnation, Mortgage Borrower's, Lender's and/or Mortgage Lender's costs
incurred in connection with the recovery thereof, (ii)in the event of a Liquidation Event consisting
of a Casualty or Condemnation, the costs incurred by Mortgage Borrower in connection with a
restoration of all or any portion of the Property made in accordance with the Mortgage Loan
Documents, (iii) in the event of a Liquidation Event consisting of a Casualty or Condemnation or
a Transfer pursuant to Section 7.1(iii), amounts required or permitted to be deducted therefrom
and amounts paid pursuant to the Mortgage Loan Documents to Mortgage Lender, (iv).inthe event
of a Liquidation Event consisting of a Casualty or Condemnation, those proceeds paid to Mortgage
Borrower pursuant to the Mortgage that do not fallunder subsection (ii)above; (v) in the case of
a foreclosure sale, disposition or transfer of the Property in connection with realization thereon
following an Event of Default under the Mortgage Loan, such customary costs and expenses of
attorneys'
sale or other disposition (including reasonable fees and brokerage commissions), (vi) in
the case of a foreclosure sale, such reasonable costs and expenses incurred by Mortgage Lender
under the Mortgage Loan Documents as Mortgage Lender shall be entitled to receive
reimbursement for under the terms of the Mortgage Loan Documents, (vii) in the case of a
attorneys'
refinancing of the Mortgage Loan, such costs and expenses (including reasonable fees)
of such refinancing, and (viii) the amount of any prepayments required pursuant to the Mortgage
Loan Documents in connection with any such Liquidation Event.
1.31 Net Loan: The aggregate of all Costs.
1.32 New Loan Documents: Collectively, the Second Land Loan Documents
and the Loan Documents.
1.33 Project: The Property together with the Improvements.
1.34 Reauisition: A written certification and request for an Advance signed by
Borrower substantially in the form of Schedule C attached hereto.
8
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
1.35 Restricted Party: Individually or collectively, as the context may require,
Borrower, any Guarantor and Mortgage Borrower.
1.36 Intentionally Omitted.
1.37 Scheduled Completion Date: On or before the Maturity Date contained in
the Note.
1.38 Soft Costs: The costs relating to the Project or the Loan, which are not
improvement"
"costs of an (as such term is defined in Section 2(5) of the New York Lien Law),
including but not limited to, Mortgage Borrower's legal fees and costs, marketing expenses, and
leasing and brokerage commissions, as itemized in the Budget.
1.39 Title Comuany: Kensington Vanguard National Land Services of NY,
LLC, as agent for Stewart Title Insurance Company.
1.40 UCC Title Company: Fidelity National Title Insurance Company.
Code·
1.41 UCC or flniform Commercial The Uniform Commercial Code as in
effect in the State in which the perfection of the security interest in the Collateral is made.
1.42 UCC Title Insurance Policy: With respect to the Collateral, a UCC title
insurance policy in a form acceptable to Lender issued with respect to the Collateral and insuring
the first lien position of the Pledge Agreement encumbering the Collateral.
Unless otherwise specified, (i)all references to sections and schedules are to those
"herein" "hereunder"
in this Agreement, (ii) the words and and words of similar import refer to
this Agreement as a whole and not to any particular provision, (iii)all definitions are equally
"including"
applicable to the singular and plural forms of the terms deñned, and (iv) the word
means "including but not limited to".
ARTICLE II
LOAN ADVANCES
2.1 Agreement to Lend: Subject to the terms and conditions of this Agreement
and Borrower's compliance with all the provisions hereof, and relying on Borrower's
representations set forth herein, Lender agrees to lend to Borrower, and Borrower agrees to borrow
from Lender, an amount not to exceed the Loan Amount, to be disbursed in several advances at
such times and in such amounts as Lender shall determine in accordance with the procedures set
forth in this Agreement. Lender and Mortgage Lender shall determine in their sole and absolute
9
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
discretion whether Advances are made first from the Mortgage Loan or the Loan.
2.2 Advances Generally.
(a) Subject to the terms and conditions of this Agreement, each
Advance shall be in an amount detenuined by Lender to be equal to the total Hard Costs and Soft
Costs incurred or paid for by the Borrower (subject to Section 2.2(m)) and then due through the
end of the period covered by the applicable Requisition less the aggregate amount of Advances
previously made.
(b) Intentionally Omitted.
(c) Except as set forth in Section 2.5 below, Lender shall not be required
to make an Advance more than once in any seven (7) day period, and no Advance shall be for an
amount less than $50,000.00.
(d) Intentionally Omitted.
(e) Intentionally Omitted.
(f) Lender shall not be required to make Advances for building
materials that have not been incorporated into the Improvements, unless: (i) the Lender's
Consultant shall have inspected such materials and found them to be of acceptable quality and in
conformance with the Budget; (ii)Borrower shall have delivered to Lender bills of sale or other
evidence reasonably satisfactory to Lender of the cost of, and Borrower's title to, such materials;
(iii)Borrower shall have delivered evidence reasonably satisfactory to Lender specifying (1) the
security measures that have been taken to protect such materials from theft, casualty or
deterioration, and (2) the steps that have been taken to identify and to segregate such materials so
as adequately to give notice to all third parties of Borrower's titlein and to such materials; (iv)
Borrower shall have provided evidence reasonably satisfactory to Lender that such materials are
insured against allrisk of loss for their full replacement cost; (v) such materials shall be stored on
the Property; and (vi) to the extent that Advances with respect to materials that have not been
incorporated in the Improvements shall exceed Fifty Thousand Dollars ($50,000), Lender shall
have received UCC-1 financing statements or other evidence reasonably satisfactory to Lender of
Lender's perfected second (2nd) priority lien on and security interest in such materials.
(g) Regardless of whether Borrower has submitted a Requisition
therefor, Lender, in itssole and absolute discretion, may, from time to time, advance amounts that
become due for Hard Costs for which Borrower is responsible for payment provided that Borrower
has not paid same within ten (10) days of receipt of notice from Lender. Such advances may be
made directly to (i) parties to whom such amounts are due, or (ii)Lender to reimburse Lender for
sums due to it.All such advances ("Direct Advances") shall be deemed Advances hereunder and
10
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
shall be secured by the Collateral Documents to the same extent as if they were made directly to
Borrower.
(h) All Advances, other than Direct Advances, shall be made to
Borrower's account at an account established at a bank as shall be approved by Lender in itssole
but commercially reasonable discretion (the "Bank").
(i) If Lender, Lender's Consultant or Title Company shall so require,
Borrower shall submit with its Requisitions estoppel certificates, lien waivers or other similar
certifications in form satisfactory to Lender and Title Company showing amounts paid and
amounts due to all persons or organizations furnishing labor or materials in connection with the
completion of the Improvements.
(j) The making of an Advance by Lender shall not constitute Lender's
approval or acceptance of the construction theretofore completed. Lender's inspection and
approval of the Budget, the Construction Work, the Improvements, or the workmanship and
materials used therein, shall impose no liability of any kind on Lender, the sole obligation of
Lender as the result of such inspection and approval being to make the Advances if, and to the
extent, required by this Agreement. Any disbursement made by Lender without Lender having
received each of the items to which it isentitled under this Agreement shall not constitute breach
or modification of this Agreement, nor shall any written amendment to this Agooment be required
as a result thereof.
(k) Intentionally Omitted.
(1) Intentionally Omitted,
(m) Intentionally Omitted.
(n) Lender shall have absolutely no obligation to make any Advances
after the Scheduled Completion Date. Burrower shall indemnify Lender, and hold Lender
harmless from, any liability or claim of any nature whatsoever that arises from Lender's due right
under this Agreement to discontinue Advances following the Scheduled Completion Date.
(o) Advances ofthe Loan are to be applied solely to Costs in accordance
with the Budget. Lender shall have no obligation to permit use of proceeds of the Loan for any
other purpose.
(p) Lender shall not be required to make any Advances to fund any
deposit due in connection with any construction contract for Costs, nor shall Lender be required
to make Advances to reimburse Borrower for any funds previously expended by Borrower to fund
any deposit due in connection with any construction contract for Costs.
11
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021
NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022
2.3 Certain Conditions Precedent to Lender's Obligation to Make Advances of
the Loan: Lender shall not be obligated to make any Advance unless allof the following conditions
shall be satisfied as of the proposed Funding Date of such Advance:
(a) Lender and Lender's Consultant shall have each received a
Requisition from Borrower, at least two (2) Business Days prior to the proposed Funding Date,
together with (i)paid receipts (including invoices, bills and copies ofpayments made in connection
therewith) and lien waivers for all Costs that were included in any prior Advances and invoices for
all Costs proposed to be included in the applicable Advance and (ii)an application and certificate
for payment (AIA G702) signed by the Architect and Construction Mañager, along with a
completed continuation sheet (AIA G703).
(b) If payment or reimbursement is being requested for any Costs, or
any fees of architects and engineers, or construction managemêñt fees, Lender shall have received
a written statement from Lender's Consultant, at least two (2) Business Days prior to the proposed
Funding Date, certifying to Lender (i)the amount of Costs (broken down by Line Item) and the
amount of any fees of architects and engineers, or construction management fees, that have been
incurred by Borrower, (ii)intentionally omitted, (iii)whether allmunicipal governmental agency
impections that should have occurred with respect to the completed construction have occüired,
and (iv) whether the completed construction has been performed in a good and workman like
manner and in accordance with the Budget.
(c) Lender shall have received evidence satisfactory to Lender that there
are no conditional sales contracts, chattel mortgages, leases of personality, finandng statements or
titleretention agreements affecting any of the Property.
(d) Each of the representations and warranties contained in this
Agreement shall be true and correct, in all material respects, as of the proposed Funding Date, as
verified by Lender.
Preview
FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 EXHIBIT “B” FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 MEZZANINE LOAN AGREEMENT in the amou=t of up to $3,000,000.00 Between HELLO LIVING DEVELOPER NOSTRAND LLC and 1580 NOSTRAND MEZZ LLC Dated as of: August 28, 2020 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 MEZZANINE LOAN AGREEMENT THIS MEZZANINE LOAN AGREEMENT ("Agreement") dated as of the 28th day of August, 2020, is made by and between HELLO LIVING DEVELOPER NOSTRAND LLC, a New York limited liability company, having an address at 33 35th Street, 6th Floor, Suite B-613, Brooklyn, NY 11232 ("Borrower"), and 1580 NOSTRAND MEZZ LLC, a Delaware limited liability company, its successors and/or assigns, as their interests may appear, having offices at 520 Madison Avenue, Suite 3501, New York, NY 10022 ("Lender"). E11N E fiE I][: WHEREAS, on December 6, 2017, HELLO NOSTRAND LLC, a New York limited liability company (the "Mortgage Borrower"), gave an Amended, Restated and Consolidated Senior Loan Promis:sory Note (the "First Land Mortgage Note") to PROPHET MORTGAGE OPPORTUNITIES LP (the "Original Mortgage Lender"), in the principal sum of $17,730,000.00 (the "First Land Mortgage Loan"); WHEREAS, for the purposes of securing the Land Mortgage Note, on December 6, 2017, Mortgage Borrower executd and delivered a certain Consolidation, Extension and Modification of Senior Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the principal sum of $17,730,000.00 (the "First Land Mortgage"), wherein Mortgage Borrower mortgaged in favor of Original Mortgage Lender the premises commonly known as 1580 Nostrand Avenue, Brooklyn, New York 11226 (the "Property"), as further described in the Land Mortgage, as well as certain other documents, including, without limitation, that certain Senior Loan Agreement dated as of December 6, 2017 (the "First Senior Loan Agreement"), executed by certain third parties as additional security for the repayment of the sums due under the Land Mortgage Note and Land Mortgage (collectively, including the Land Mortgage Note, the Land Mortgage, and the Senior Loan Agreement, the "First Land Mortgage Loan Documents"), which First Land Mortgage Loan Documents were thereafter assigned by an Assignment of Consolidation, Extension and Modification of Senior Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing and Senior Loan Collateral Assignment of Leases and Rents dated June 7, 2019 by Original Mortgage Lender to 1580 NOSTRAND AVE LLC, a Delaware limited liability company (collectively, together with its successors and/or assigns, the "Mortgage Lender"); WHEREAS, on December 6, 2017, Mortgage Borrower gave a Building Loan Promissory Note (the "Bundig Mortgage Note") to Original Mortgage Lender in the principal sum of up to $39,770,000.00 (the "Building Mortgage Loan"); WHEREAS, for the purposes of securing the Building Mortgage Note, on December 6, 2017, Mortgage Borrower executed and delivered a certain Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the principal sum of up to 2 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 $39,770,000.00 (the "Building Mortgage"), wherein Mortgage Borrower mortgaged in favor of Original Mortgage Lender the Property, as well as certain other documents, including, but not limited to, that certain Building Loan Agreement (the "Building Loan Agreement"), executed by certain third parties as additional security for the repayment of the sums due under the Building Mortgage Note and the Building Mortgage (collectively, including the Building Mortgage Note, the Building Mortgage and the Building Loan Agreement, the "Building Mortgage Loan Documents"), which Building Mortgage Loan Documents were thereafter assigned by an Assignmeñt of Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing and Building Loan Collateral Assignment of Leases and Rents dated June 7, 2019 by Original Mortgage Lender to Mortgage Lender; WHEREAS, on December 6, 2017, Mortgage Borrower gave a Project Loan Promissory Note (the "Project Mortgage Note") to Original Mortgage Lender in the principal sum of up to $5,500,000.00 (the "Project Mortgage Loan"); WHEREAS, for the purposes of securing the Project Mortgage Note, on December 6, 2017, Mortgage Bonower executed and delivered a certain Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing in the principal sum of up to $5,500,000.00 (the "Project Mortgage"), wherein Mortgage Borrower mortgaged in favor of Original Mortgage Lender the Property, as well as certain other documents, including, but not Agreement" limited to, that certain Project Loan Agreement (the "Project Loan and, together with the First Land Loan Agreement and the Building Loan Agreement, the "Mortgage Loan Agreement"), executed by certain third parties as additional security for the repayment ofthe sums due under the Project Mortgage Note and Project Mortgage (collectively, including the Project Mortgage Note, the Project Mortgage and the Project Loan Agreement, the "Project Mortgage Loan Documents"), which Project Mortgage Loan Documents were thereafter assigned by an Assign-ment of Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing and Project Loan Collateral Assignment of Leases and Rents dated June 7, 2019 by Original Mortgage Lender to Mortgage Lender; WHEREAS, on the date hereof, Mortgage Borrower gave a Mortgage Loan Note (the "Second Land Mortgage Note", and together with the First Land Mortgage Note, the Building Mortgage Note and the Project Mortgage Note, hereinafter, collectively, the "Mortgage Note") to Mortgage Lender in the principal sum of up to $8,300,000.00 (the "Sccond Land Mortgage Loan", and together with the First Land Mortgage Loan, the Building Mortgage Loan and the Project Mortgage Loan, hereinafter, collectively, the "Mortgage Loan"); WHEREAS, for the purposes of securing the Second Land Mortgage Note, on the date hereof, Mortgage Borrower executed and delivered a certain Mortgage and Security Agreement in the principal sum of up to $8,300,000.00 (the "Second Land Mortgage", and together with the First Land Mortgage, the Building Mortgage, and the Project Mortgage, hereinafter, collectively, the "Mortgage"), wherein Mortgage Borrower mortgaged in favor of Mortgage Lender the 3 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 Property, as well as certain other documents executed by certain third parties as additional security for the repayment of the sums due under the Second Land Mortgage Note and Second Land Mortgage (collectively, including the Second Land Mortgage Note and the Second Land Mortgage, the "Second Land Mortgage Loan Documents", and together with the First Land Mortgage Loan Documents, the Building Mortgage Loan Documents and the Project Mortgage Loan Documents, hereinafter, collectively, as amended by the Forbearance Agreement, the "Mortgage Loan Documents"); WHEREAS, as of the date hereof, Borrower, Lender, Mortgage Borrower, Mortgage Lender, and Guarantor entered into that certain Forbearance Agreement relating to certain defaults under the First Land Mortgage Loan, the Building Mortgage Loan, and the Project Mortgage Loan (the "Forbearance Agrcem=‡"); each and every reference to the First Land Mortgage Loan Documents, the Building Mortgage Loan Documents, and the Project Mortgage Loan Documents described in the foregoing recitals, as such references appear below in this Agreement and in the other Loan Documents, shall be interpreted to mean such First Land Mortgage Loan Documents, Building Mortgage Loan Documents, and Project Mortgage Loan Documents as amended by the Forbearance Agreement; WHEREAS, Borrower is the direct beneficial owner of all of the membership interests in Mortgage Borrower (collectively, the "Pledged Interests"); WHEREAS, Borrower has requested Lender to make a loan to it in the principal amount of up to $3,000,000.00 (the "Loan"), which Loan is evidenced by that certain Mezzanine Promissory Note executed by Borrower in favor of Lender (the "Note"); WHEREAS, as a condition precedent to the obligation of Lender to make the Loan to Borrower, Borrower has entered into that certain Ownership Interests Pledge and Security Agreement, dated as of the date hereof, in favor of Lender (as amended, supplemented or otherwise modified from time to time, the "Pledge Agreement"), pursuant to which Borrower has granted to Lender a first priority security interest in the Collateral (as hereinafter defiñed) as collateral security for the Debt (as hereinafter defined) (the Pledge Agreement, together with the Note, this Agreement, and allother documents and guarantees executed by Borrower and Guarantor and any other party in favor of Lender in connection with the Loan, hereinafter, the "Loan Decuments"); WHEREAS, Borrower desires to obtain the Loan from Lender; and WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter defined). Now, therefore, in consideration of the premises and mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 4 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 ARTICLE I DEFINITIONS Use of or reference to the following terms herein shall be construed as indicated below. All other capitalized terms used but not otherwise defined in this Article I shall have the meanings ascribed to such terms in this Agreement the Pledge Agreemelit or the Note: 1.1 Advance: Any disbursement of a portion of the Loan by Lender pursuant to the terms hereof. 1.2 Affiliate: As to any Person, any other Person that, (i) directly or indirectly, owns ten percent (10%) or more of the direct or indirect legal, beneficial or economic interests in such Person, (ii) directly or indirectly, is in Control of, is Controlled by or is under common Control with such Person, (iii) is a director or officer of such Person or of an Affiliate of such Person, or (iv) is the spouse, issue or parent of such Person or of an Affiliate of such Person. 1.3 Architect: Ryan Min, or such architect as approved by Lender in its sole but commercially reasonable discretion. 1.4 Architect's Agreement: That certain AIA Document B101-2007 Standard Form of Agreement between Owner and Architect dated as of , between Mortgage Borrower and the Architect, as the same may be amended, restated, extended or otherwise modified from time to time in accordaiice with this Agreement or as otherwise approved by Lender in its reasonable discretion. 1.5 Budget: Borrower's estilliate of the cost to construct the Improvements, which estimate has been delivered to Lender, as the same may be revised from time to time in accordance with the terms of this Agreement or with Lender's approval in itsreasonable discretion. 1.6 Budgeted Amount: The portion of the Loan that Borrower expects to be advanced for any particular line item of Costs, as set forth in the Budget. 1.7 Business Day: Any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. 1.8 Casualty: The occurrence of any casualty, damage or injury, by fire or otherwise, to the Property or any part thereof. 1.9 Collateral: The Pledged Interests, and all ainouilts on deposit in any reserve account established under the Loan Documents and any and all other property or collateral in 5 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 which Lender is granted a security interest under any ofthe Loan Documents, in each case whether existing on the date hereof or hereafter pledged or assigned to Lender. 1.10 Collateral Documents: The Pledge Agreement; any Uniform Commercial Code financing statements filed in connection with the Pledge Agreemeñt; the Guaranty; and any and all other loan documents executed by the Borrower for the benefit of Lender in coññection with the Loan. 1.11 Condemnation: A temporary or permanent taking by any Govemmêñtal Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting the Property or any part thereof. 1.12 Construction Manager: Supreme Builders & Developers LLC, or such general contractor or construction rñâñager as approved by Lender in its sole but commercially reasonable discretion. 1.13 Construction Work: The construction of the Project, which is to be carried out by Mortgage Borrower using the proceeds of the Loan, Mortgage Borrower's funds and Borrower's funds, in compliance with the Budget. 1.14 Costs: Hard Costs and/or Soft Costs, individually and collectively, as the case may be. 1.15 Debt: The outstanding principal amount set forth in,and evidêñced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Pledge Agreement or any other Loan Document. 1.16 Environmental Laws: This term has the meaning ascribed thereto in that certain Environmental Indemnity Agreement executed by Borrower and Guarantor of even date herewith, in favor of Lender. 1.17 Existing Mortgage Loan Documents: Collectively, the First Land Mortgage Loan Documents, the Building Mortgage Loan Documents, and the Project Mortgage Loan Documents. 1.18 Fundine Date: The date on which an Advance is actually disbursed. 1.19 Govemmental Authority: Any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental unit (foreign, federal, state, county, 6 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 district, municipal, city or otherwise) whether now or hereafter in existence. 1.20 Guarantor: Eli Karp, pursuant to the Guaranty. 1.21 Guaranty: Collectively, (a) the Conditional Guaranty, dated as of the date hereof, executed and delivered by Guarantor in connection with the Loan to and for the benefit of Lender, (b) the Completion and Cost Over-Run Guaranty dated as of December 6, 2017, from Guarantor for the benefit of Original Mortgage Lender, the terms of which are incorporated herein, as set forth in the Forbearance Agreement, such that Guarantor's has fully guaranteed the completion of the Construction Work, and (c) that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and Guarantor in connection with the Loan to and for the benefit of Lender, each as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time. 1.22 Hard Costs: The costs of labor, materials, equipment, as well as any other improvement" costs which are "costs of an (as such term is defined in Section 2(5) of the New York Lien Law), in connection with the completion of the Construction Work as set forth and itemized in the Budget. 1.23 Improvements: All structures, and buildings and allreplacements thereof, now or hereafter located or erected upon the Property including all personal property owned by Mortgage Borrower or Borrower of every kind and nature whatsoever affixed to or forming part of said structures and/or buildings. 1.24 Lender's Consultant: The appointed designee, agent or contractor of Lender. 1.25 Legal Requirements: All laws, statutes, treaties, codes, permits, decrees, ordinances, orders, rules, regulations, determinations, or requirements of any governmental authority, arbiter or court, including, without limitation, Environmental Laws, building, any any . use, zoning and land use laws or r ahns (including set back regairements), and any applicable covenants and restrictions pursuant thereto. 1.26 Liquidation Event: shall have the meaning set forth in Section 7.1 hereof. 1.27 Loan Amount: Up to THREE MILLION AND 00/100 DOLLARS ($3,000,000.00) in the aggregate. 1.28 Loan Party: Individually and collectively, as the context requires, Borrower, Mortgage Borrower, and Guarantor. 1.29 Mortgage Loan Default: A failure of Borrower to timely provide Lender 7 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 with either (i) cancelled checks, (ii) bank statements, (iii) or any other proof, reasonably satisfactory to Lender, evidencing that Mortgage Borrower has made the monthly instalhnent payment required pursuant to the terms of the Mortgage Loan (the "Proof of Payment"). If (15th requested, Borrower shall be required to submit Proof of Payment no later than the fifteenth day of each calendar month commencing on October 1, 2020 and continuing the fifteenth (15th) Of each month through the Maturity Date, as same may be extended; provided, however, that for any monthly installment payment under the Mortgage Loan processed in full by Lender and Mortgage Lender pursuant to Section 2.5(f) of this Agreement, Borrower shall not be required to submit proof of such payment. 1.30 Net Liauidation Proceeds After Debt Service: With respect to any Liquidation Event, all amounts paid to or received by or on behalf of Mortgage Borrower in connection with such Liquidation Event, including, without limitation, proceeds of any refinancing described in Section 7.1 (iv) hereof, less (i) in the event of a Liquidation Event consisting of a Casualty or Condemnation, Mortgage Borrower's, Lender's and/or Mortgage Lender's costs incurred in connection with the recovery thereof, (ii)in the event of a Liquidation Event consisting of a Casualty or Condemnation, the costs incurred by Mortgage Borrower in connection with a restoration of all or any portion of the Property made in accordance with the Mortgage Loan Documents, (iii) in the event of a Liquidation Event consisting of a Casualty or Condemnation or a Transfer pursuant to Section 7.1(iii), amounts required or permitted to be deducted therefrom and amounts paid pursuant to the Mortgage Loan Documents to Mortgage Lender, (iv).inthe event of a Liquidation Event consisting of a Casualty or Condemnation, those proceeds paid to Mortgage Borrower pursuant to the Mortgage that do not fallunder subsection (ii)above; (v) in the case of a foreclosure sale, disposition or transfer of the Property in connection with realization thereon following an Event of Default under the Mortgage Loan, such customary costs and expenses of attorneys' sale or other disposition (including reasonable fees and brokerage commissions), (vi) in the case of a foreclosure sale, such reasonable costs and expenses incurred by Mortgage Lender under the Mortgage Loan Documents as Mortgage Lender shall be entitled to receive reimbursement for under the terms of the Mortgage Loan Documents, (vii) in the case of a attorneys' refinancing of the Mortgage Loan, such costs and expenses (including reasonable fees) of such refinancing, and (viii) the amount of any prepayments required pursuant to the Mortgage Loan Documents in connection with any such Liquidation Event. 1.31 Net Loan: The aggregate of all Costs. 1.32 New Loan Documents: Collectively, the Second Land Loan Documents and the Loan Documents. 1.33 Project: The Property together with the Improvements. 1.34 Reauisition: A written certification and request for an Advance signed by Borrower substantially in the form of Schedule C attached hereto. 8 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 1.35 Restricted Party: Individually or collectively, as the context may require, Borrower, any Guarantor and Mortgage Borrower. 1.36 Intentionally Omitted. 1.37 Scheduled Completion Date: On or before the Maturity Date contained in the Note. 1.38 Soft Costs: The costs relating to the Project or the Loan, which are not improvement" "costs of an (as such term is defined in Section 2(5) of the New York Lien Law), including but not limited to, Mortgage Borrower's legal fees and costs, marketing expenses, and leasing and brokerage commissions, as itemized in the Budget. 1.39 Title Comuany: Kensington Vanguard National Land Services of NY, LLC, as agent for Stewart Title Insurance Company. 1.40 UCC Title Company: Fidelity National Title Insurance Company. Code· 1.41 UCC or flniform Commercial The Uniform Commercial Code as in effect in the State in which the perfection of the security interest in the Collateral is made. 1.42 UCC Title Insurance Policy: With respect to the Collateral, a UCC title insurance policy in a form acceptable to Lender issued with respect to the Collateral and insuring the first lien position of the Pledge Agreement encumbering the Collateral. Unless otherwise specified, (i)all references to sections and schedules are to those "herein" "hereunder" in this Agreement, (ii) the words and and words of similar import refer to this Agreement as a whole and not to any particular provision, (iii)all definitions are equally "including" applicable to the singular and plural forms of the terms deñned, and (iv) the word means "including but not limited to". ARTICLE II LOAN ADVANCES 2.1 Agreement to Lend: Subject to the terms and conditions of this Agreement and Borrower's compliance with all the provisions hereof, and relying on Borrower's representations set forth herein, Lender agrees to lend to Borrower, and Borrower agrees to borrow from Lender, an amount not to exceed the Loan Amount, to be disbursed in several advances at such times and in such amounts as Lender shall determine in accordance with the procedures set forth in this Agreement. Lender and Mortgage Lender shall determine in their sole and absolute 9 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 discretion whether Advances are made first from the Mortgage Loan or the Loan. 2.2 Advances Generally. (a) Subject to the terms and conditions of this Agreement, each Advance shall be in an amount detenuined by Lender to be equal to the total Hard Costs and Soft Costs incurred or paid for by the Borrower (subject to Section 2.2(m)) and then due through the end of the period covered by the applicable Requisition less the aggregate amount of Advances previously made. (b) Intentionally Omitted. (c) Except as set forth in Section 2.5 below, Lender shall not be required to make an Advance more than once in any seven (7) day period, and no Advance shall be for an amount less than $50,000.00. (d) Intentionally Omitted. (e) Intentionally Omitted. (f) Lender shall not be required to make Advances for building materials that have not been incorporated into the Improvements, unless: (i) the Lender's Consultant shall have inspected such materials and found them to be of acceptable quality and in conformance with the Budget; (ii)Borrower shall have delivered to Lender bills of sale or other evidence reasonably satisfactory to Lender of the cost of, and Borrower's title to, such materials; (iii)Borrower shall have delivered evidence reasonably satisfactory to Lender specifying (1) the security measures that have been taken to protect such materials from theft, casualty or deterioration, and (2) the steps that have been taken to identify and to segregate such materials so as adequately to give notice to all third parties of Borrower's titlein and to such materials; (iv) Borrower shall have provided evidence reasonably satisfactory to Lender that such materials are insured against allrisk of loss for their full replacement cost; (v) such materials shall be stored on the Property; and (vi) to the extent that Advances with respect to materials that have not been incorporated in the Improvements shall exceed Fifty Thousand Dollars ($50,000), Lender shall have received UCC-1 financing statements or other evidence reasonably satisfactory to Lender of Lender's perfected second (2nd) priority lien on and security interest in such materials. (g) Regardless of whether Borrower has submitted a Requisition therefor, Lender, in itssole and absolute discretion, may, from time to time, advance amounts that become due for Hard Costs for which Borrower is responsible for payment provided that Borrower has not paid same within ten (10) days of receipt of notice from Lender. Such advances may be made directly to (i) parties to whom such amounts are due, or (ii)Lender to reimburse Lender for sums due to it.All such advances ("Direct Advances") shall be deemed Advances hereunder and 10 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 shall be secured by the Collateral Documents to the same extent as if they were made directly to Borrower. (h) All Advances, other than Direct Advances, shall be made to Borrower's account at an account established at a bank as shall be approved by Lender in itssole but commercially reasonable discretion (the "Bank"). (i) If Lender, Lender's Consultant or Title Company shall so require, Borrower shall submit with its Requisitions estoppel certificates, lien waivers or other similar certifications in form satisfactory to Lender and Title Company showing amounts paid and amounts due to all persons or organizations furnishing labor or materials in connection with the completion of the Improvements. (j) The making of an Advance by Lender shall not constitute Lender's approval or acceptance of the construction theretofore completed. Lender's inspection and approval of the Budget, the Construction Work, the Improvements, or the workmanship and materials used therein, shall impose no liability of any kind on Lender, the sole obligation of Lender as the result of such inspection and approval being to make the Advances if, and to the extent, required by this Agreement. Any disbursement made by Lender without Lender having received each of the items to which it isentitled under this Agreement shall not constitute breach or modification of this Agreement, nor shall any written amendment to this Agooment be required as a result thereof. (k) Intentionally Omitted. (1) Intentionally Omitted, (m) Intentionally Omitted. (n) Lender shall have absolutely no obligation to make any Advances after the Scheduled Completion Date. Burrower shall indemnify Lender, and hold Lender harmless from, any liability or claim of any nature whatsoever that arises from Lender's due right under this Agreement to discontinue Advances following the Scheduled Completion Date. (o) Advances ofthe Loan are to be applied solely to Costs in accordance with the Budget. Lender shall have no obligation to permit use of proceeds of the Loan for any other purpose. (p) Lender shall not be required to make any Advances to fund any deposit due in connection with any construction contract for Costs, nor shall Lender be required to make Advances to reimburse Borrower for any funds previously expended by Borrower to fund any deposit due in connection with any construction contract for Costs. 11 FILED: ROCKLAND COUNTY CLERK 11/30/2022 07:23 PM INDEX NO. 034885/2021 NYSCEF DOC. NO. 157 RECEIVED NYSCEF: 11/30/2022 2.3 Certain Conditions Precedent to Lender's Obligation to Make Advances of the Loan: Lender shall not be obligated to make any Advance unless allof the following conditions shall be satisfied as of the proposed Funding Date of such Advance: (a) Lender and Lender's Consultant shall have each received a Requisition from Borrower, at least two (2) Business Days prior to the proposed Funding Date, together with (i)paid receipts (including invoices, bills and copies ofpayments made in connection therewith) and lien waivers for all Costs that were included in any prior Advances and invoices for all Costs proposed to be included in the applicable Advance and (ii)an application and certificate for payment (AIA G702) signed by the Architect and Construction Mañager, along with a completed continuation sheet (AIA G703). (b) If payment or reimbursement is being requested for any Costs, or any fees of architects and engineers, or construction managemêñt fees, Lender shall have received a written statement from Lender's Consultant, at least two (2) Business Days prior to the proposed Funding Date, certifying to Lender (i)the amount of Costs (broken down by Line Item) and the amount of any fees of architects and engineers, or construction management fees, that have been incurred by Borrower, (ii)intentionally omitted, (iii)whether allmunicipal governmental agency impections that should have occurred with respect to the completed construction have occüired, and (iv) whether the completed construction has been performed in a good and workman like manner and in accordance with the Budget. (c) Lender shall have received evidence satisfactory to Lender that there are no conditional sales contracts, chattel mortgages, leases of personality, finandng statements or titleretention agreements affecting any of the Property. (d) Each of the representations and warranties contained in this Agreement shall be true and correct, in all material respects, as of the proposed Funding Date, as verified by Lender.