Preview
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
EXHIBIT B
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
Allon~e
Reference is made to that certain Note Modification Agreement dated November 27, 2017
from 179 Ludlow Owners LLC, a New York limited liability company (the "Note") payable to the
order of Mercantil Commercebank, N.A., a national banking association now known as Amerant
Bank, N.A. It is intended that this Allonge be attached to and made a permanent part of the Note.
Pay to the order of DCR Mortgage 10 Sub 2, LLC ("Assignee"}, without recourse,
representations or warranties of any kind, except as otherwise provided in that certain Asset Sale
Agreement between Amarant Bank, N.A. and Assignee dated August 3, 2023.
Executed this ~S ~day of August, 2023.
AMERANT BANK, N.A., a national
banking association
~ y.
By:
Print e: uardo Marino
Its First Vice President
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
NOTE MODIFICATION AGREEMENT
$1,950,000.00 New York, New York
November 27, 2017
BORROWER: 179 LUDLOW OWNERS LLC
A New York limited liability company
Address: 150 Broadway, Suite 2205
City: New York
State: New York
Zip Code: 10038
is borrowing money from
LENDER: MERCANTIL BANK, N.A.,
A national banking association
Address: 11 East 51St Street
City: New York
State: New-York
Zip Code: 10022
WHEREAS, the Lender is now the lawful owner and holder of the notes,
bonds or other obligations (collectively, the "Notes") more particularly described in
Exhibit A attached hereto, secured by the mortgages also as more particularly
described in Exhibit A attached hereto (collectively, the "Mortgages"} and covering the
fee estate of the Borrower in the Premises (hereinafter defined);
WHEREAS, prior to the execution and delivery by the Borrower to the
Lender of a certain Mortgage Modification Agreement by the Borrower to the Lender,
dated the date hereof, there is presently owing on the Notes and the Mortgages the
principal balance of $1,951,546.53 and accrued interest;
WHEREAS, the Lender and the Borrower have agreed to modify the
Notes and principal sums evidenced thereby, and to modify the time and manner of
payment and terms and provisions of the Notes in the manner hereinafter set forth; and
WHEREAS, the Lender and any other holder of this Note (as hereinafter
defined) may transfer this Note. The word Lender includes the original Lender and
anyone who takes this Note by transfer.
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the Borrower hereby represents and warrants to and covenants and
agrees with the Lender as follows:
1. BORROWER'S PROMISE TO PAY:
In return for this loan, the Borrower promises to pay to the order of the Lender
the principal sum of up to ONE MILLION NINE HUNDRED FIFTY THOUSAND
AND 00l100THS ($1,950;000.00) DOLLARS (the "Loan"), together with interest
on the unpaid principal at the interest rate set forth herein, fees and other
charges payable as provided below.
2. TERM:
The term of the Loan shall be from the date hereof through November 27, 2020
(the "Initial Term" and such date at the expiration (or earlier acceleration) of the
term of the Loan being referred to herein as the "Maturity Date"), at which time
the entire principal amount advanced, plus unpaid interest, fees and other
amounts and charges specified herein shall be due and payable.
3. INTEREST:
Commencing on the date hereof through the Maturity Date, interest shall accrue
on the outstanding principal sum of this Note at a rate per annum equal to
4.2210°/o (the "Interest Rate"). After any default, interest shall accrue at the rate
set forth in Section 10 of this Note.
4. PAYMENTS:
Commencing on December 27, 2017 and on the 27th dad" of each calendar
month thereafter, through and including the Maturity Date, Borrower shall pay a
combined monthly installment of principal and interest in the amount of $9,629.23
based upon the Interest Rate and a thirty (30) year amortization schedule. Said
payments (including prepayments) shall be applied first to escrows and other
amounts due under the Note and Mortgage, then to interest, and lastly to
principal. Interest from the date of closing to the end of the month of closing shall
be due and payable on the date hereof. Interest on the principal shall be
calculated on the basis of a 360 day year and the actual number of days elapsed.
On the Maturity Date, the entire principal amount outstanding, together with all
accrued and unpaid interest, fees and other amounts and changes outstanding
shall be due and payable.
All payments shall be made to Lender at the address shown on statements, or to
such other address as may be required by Lender. Notwithstanding anything
2
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
contained herein to the contrary, Lender shall have the right, at its sole option, to
apply any payment received under this Note first to any late fees, collection or
other expenses to which Lender may be entitled under this Note, the Mortgage
(hereinafter defined) or any other Loan Document. The making of any partial
prepayment shall not change the due dates or amounts of monthly installment
payments next becoming due.
5. PREPAYMENT:
In the event of a sale of the Premises by Borrower prior to the Maturity Date, or
any prepayments made pursuant to the provisions of this Note, this Note shall be
subject to the following prepayment premiums (the "Prepayment Premium"):
(i) During the first (1St) year of the Loan Term, a Prepayment Premium
equal to two (2%) percent of the prepayment amount;
(ii) During the second (2"d) year of the Loan Term, a Prepayment
Premium equal to two (2%) percent of the prepayment amount;
(iii) During the third (3rd) year of the Loan Term, a Prepayment
Premium equal to one (1%) percent of the prepayment amount;
Notwithstanding the foregoing, there shall be no prepayment premium in
conjunction with (a) application of insurance or condemnation proceeds, (b) in
the payment of the Mandatory Prepayment Amount (hereinafter defined) and (c)
prepayment within ninety (90) days prior to the Maturity Date. The Prepayment
Premium shall be due if the Loan is accelerated due to an Event of Default by
Borrower.
6. LATE CHARGES:
If the Lender does not receive any monthly payment (excluding any principal
payments due on the Maturity Date) within twenty (20) days of its due date, then
for each such late payment the Borrower shall pay a late charge. The late
charge shall be equal to five (5%) percent of such overdue amount. Acceptance
by Lender of a late payment shall not be deemed or considered an election of
remedies or waiver by Lender of rights at law, ar under this Note or the
Mortgage. For the avoidance of doubt, there shall be no late fee incurred in
connection with the acceleration of the Loan or upon any payment due on the
Maturity Date.
3
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
7. SECURITY FOR NOTE:
As security for the payment of this Note, the Borrower is giving that certain
Mortgage Consolidation and Modification Agreement (the "Mortgage") to the
Lender, dated the date of this Nofe, executed by the Borrower, and is entering
into certain other agreements collateral to this Loan, more particularly described
in the Mortgage (collectively, the "Loan Documents"). The Mortgage covers the
property (collectively, the "Premises") owned by the Borrower at:
Address: 179 Ludlow Street, Unit C, Lot 1101, Block 412
Borough. Manhattan
County: New York
State: New York
The Premises are more particularly described in the Mortgage. This Note shall
evidence and the Mortgage shall secure the indebtedness described herein and
any future loans or advances that may be made to or on behalf of the Borrower
by the Lender at any time or times hereafter under the Mortgage and any such
loans and advances shall be added to and shall bear interest at the same rate
per annum as the principal indebtedness hereunder subject to any increase
expressly provided for in this Note or the Mortgage.
As additional security for payment of this Note, the Borrower is giving to Lender a
valid fully-perfected first lien on the chattels, fixtures, personal property and
equipment appurtenant to the Premises now or hereafter located thereon owned
by Borrower and used in the maintenance and operation of the Premises
including, but not limited to, heating apparatus, air-conditioners, ventilation
systems and other equipment of similar nature by way of a real estate mortgage,
financing statements and security agreement.
8. PAYMENT OF TAXES AND OTHER CHARGES:
(a) Borrower agrees with Linder: (i) to pay the Lender, at the time of each
monthly payment, one-twelfth (1/12') of the current annual real estate taxes and
assessments, levied and assessed against the Premises, and if insurance is not
either prepaid or provided through a blanket policy of insurance, one twelfth
(1/121") of the insurance premium for the Premises including flood insurance if
applicable, as reasonably estimated by Lender from current bills; (ii) to claim no
deduction. upon the assessed value of such Premises on account of the monies
owning hereon; (iii) to pay all taxes, assessments, water and sewer charges,
insurance and other governmental charges levied or assessed against the
Premises within ten (10) days after the' same shall have become due and
payable, except those which Lender is escrowed for; (iv) to keep the building on
the Premises insured for the benefit of the Lender as more particularly set forth in
the Mortgage and to maintain such other insurance as may be required under the
Mortgage, including, without limitation, flood insurance, if applicable by insurers
4
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
and in amounts reasonably approved by the Lender, and to deliver such policy or
policies of insurance to the Lender; and (v) to keep the building on the Premises
in good repair and in a condition reasonably satisfactory to the Lender.
(b) The Borrower further agrees that, should thirty (30) days default be made
in the payment of any such tax, assessment, rents or other governmental
charges (to the extent such moneys are not being then held by Bank), or in the
payment of a premium for such insurance, not escrowed by Lender, or should
any default (after notice to Borrower and reasonable opportunity to cure) be
made in the obligation to keep the Premises in satisfactory repair and condition,
then the Lender may pay such amount or amounts and the amount so paid shall
be added to the amount owing hereunder and shall be due and payable on
demand, with interest at the Default Rate defined below. Notwithstanding the
foregoing, Borrower shall not be required to pay and discharge any such tax,
assessment, rents or other governmental charges, if and so long as (i) the
validity thereof shall be contested by Borrower with diligence and in good faith by
appropriate proceedings and (ii) Borrower shall have deposited with Lender a
sum equal to the amount being so contested and any additional charge, penalty
or expense which may be incurred as a result of such contest; and provided
further, however, that any such tax, assessment, rents or other governments!
charges and any such additional charge, penalty or expense shall be paid in full
before the Premises, or any part thereof, shall be seized and sold in satisfaction
thereof.
9. LENDER'S RIGHT OF ACCELERATION:
The Lender may declare the unpaid principal, interest, fees, and other
amounts and charges specified under this Note due immediately upon the
occurrence of an Event of Default, as defined in the Mortgage. This right is
called acceleration. The Lender's failure to accelerate due to any Event of
Default shall not prevent the Lender from doing so for a later Event of Default.
10. DEFAULT RATE:
During the existence of an Event of Default hereunder or under the Loan
Documents (as defined in the Mortgage), interest as of the date of said Event of
Default shall accrue on the unpaid balance of the Loan at a rate equal to the
lesser of twenty-four (24%) percent over the current rate or the maximum rate
permitted by applicable law, as the case may be ("Default Rate").
~ 1. WAIVER OF FORMAL ACTS:
The Lender is not required to do any of the following before enforcing the
Lender's rights under this Note, except as sef forth in the Loan Documents:
(a) To demand payment of amounts due (known as Presentment);
~~
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
(b) To give notice that amounts due have not been paid (known as Notice of
Dishonor); or
(c) To obtain an official certificate of non-payment (known as Protest).
12. TRIAL BY JURY:
THE BORROWER AND LENDER AGREE THAT ANY SUIT, ACTION OR
PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY
LENDER OR THE BORROWER, ON OR WITH RESPECT TO THIS NOTE
OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE
PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED
ONLY BY A COURT AND NOT BY A JURY. THE LENDER AND THE
BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF
THEIR RESPECTIVE COUNSEL, WAIVE ANY RIGHT TO A TRIAL BY JURY
IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, THE
BORROWER AND LENDER WAIVE ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING,
ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER
DAMAGES OTHER THAN, OR fN ADDITION TO, ACTUAL DAMAGES. THE
BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS
A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT THE
LENDER WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS
NOTE.
13. RESPONSIBILITY UNDER NOTE:
If more than one Borrower signs this Note, each one is obligated to pay the
amount due under the Note. This Note is the joint and several obligation of
the Borrower and the Lender may enforce this Note against any one or more
Borrower separately or against all Borrowers together. The provisions of
Section 10.20 of the Mortgage are incorporated herein.
14. CHANGE:
This Note cannot be changed except in writing signed by the Borrower and
the Lender, except that Lender may grant extensions in the time of payment
of and reduction in the rate of interest on the monies due and owed under this
Note.
15. COST OF COLLECTION:
{f the Lender has to consult an attorney (but excluding in the administration of
the Loan), or go to court, or if the Borrower fails to comply with the terms of
this Note, the Borrower will pay all Lender's actual out of pocket collection costs,
6
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
plus reasonable attorneys' fees and disbursements, including, but not limited
to any fees incurred in connection with pre-judgment and post-judgment
collection costs.
16. GOVERNING LAW:
This Note is to be construed and enforced according to and governed by
the laws of the State of New York.
17. RIGHT OF SETOFF:
The Lender shall have the right to apply any monies of the Borrower limited to
accounts related to the Borrower's ownership, operation and management of the
Premises which the Lender may have on deposit against any amounts which
may be past due under this Note, or hold as security for the payment hereof
any other property heretofore or hereafter delivered by the Borrower into the
custody, control or possession of the Lender for any reason or purpose
whatsoever.
18. ADDITIONAL FINANCING:
Except as may otherwise be provided in the Loan Documents, during the term
of this Note the Borrower shall not obtain any secondary financing, and no
subordinate liens or encumbrances or use of credit that would result in a lien
on the Premises. Upon an Event of Default, at the option of the Lender, the
unpaid principal, interest, fees, and other amounts and charges under this Note
shall be immediately due and payable in full.
19. CROSS DEFAULT:
Any default (after giving effect to any applicable notice and cure period), in any
obligation under any of the Loan Documents or any other obligations of Borrower
to Lender, (the "Obligations"), shall consititute an Event of Default hereunder,
giving the Lender the right and option to accelerate this obligation and declare
the then unpaid balance due, and shall entitle Lender to declare the Mortgage
and accompanying Note which it secures immediately due and payable. This
covenant shall be effective without the execution of any further assurance,
amendment of mortgage or any affirmative action by Borrower. In the event of
an Event of Default, such Event of Default shall constitute an Event of Default
under the Obligations and Lender at its option, may declare all such
Obligations and mortgages securing the same immediately due and payable.
20. LOAN CHARGES:
Any and all payments under the Loan Documents, including without limitation,
the Interest Rate,. the Default Rate, late charges and. any other charges or
7
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
amounts due hereunder constitute material covenants of the Loan and are: (1)
a material inducement for the Lender to enter into this Loan; (2) the Lender
would not have entered into this Loan without the Borrower's agreement and
covenant to make the payments as specified in the Loan Documents; (3)
some additional payments, such as the Default Rate, are deemed by the
Lender as compensation to the Lender for the increased risk associated with
this Loan not being timely repaid- and (4) the additional payments represent
reasonable estimates to the Lender in allocating its resources (both personnel
and financial) to the ongoing review, monitoring, administration and collection
of the Loan.
If the Loan is subject to a !aw which sets maximum loan charges, and that
law is finally interpreted so that the interest or other charges collected or to
be collected in connection with the Loan exceed the permitted limits, then:
(a) any such loan charge shall be reduced by the amount necessary to
reduce the charge to the permitted limit; and (b) any sums already collected
from Borrower which exceeded permitted limits will be refunded to Borrower.
Lender may choose to make this refund by reducing the principal owed
under this Note or by making a direct payment to Borrower. If a refund reduces
principal, the reduction will be treated as a partial prepayment without any
prepayment charge under this Note.
21. DEBT SERVICE COVERAGE RATIO.
Borrower shall maintain a minimum Debt Service Coverage Ratio (the "DSCR",
as hereinafter defined) equal to 1.20x to 1.0x tested annually on a thirty (30)
year amortization period for each Computation Period (as hereinafter defined)
on the basis of actual Net Operating Income of the Property, as determined by
the fiscal year ending accountant certified operating statement or Borrowers'
tax returns based upon a thirty (30) year amortization schedule and actual
interest rate. In the event that the Lender shall reasonably determine that the
DSCR shall at any time be less than 1.20x to 1.0x tested based on the
remaining term of a thirty (30) year amortization schedule, the Lender shall
notify the Borrower in writing of such non-compliance with the DSCR covenants
(the "Mandatory Prepayment Notice"). Within fifteen (15) days of the giving of
the Mandatory Prepayment Notice, the Borrower shall make a prepayment of
this Note ("the Mandatory Prepayment") in an amount, as reasonably
determined by the Lender and set forth in the Mandatory Prepayment Notice,
which, after the giving effect to such prepayment and the resulting reduction in
the constant monthly payment of principal and interest due hereunder, shall
result in the DSCR being 1.20 x 1.0 or greater. On the making of such
Mandatory Prepayment (which prepayment shall not include the prepayment
premiums set forth herein), the constant monthly payment of principal and
interest payable hereunder shall be recalculated by the Lender so as to equal a
sum which would be payable under aself-amortizing loan over the remainder of
~'3
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
the thirty (30) year amortization schedule (aa) made on the date of such
Mandatory Prepayment, (bbd in the principal amount of the sum of this Note
outstanding after giving effect to such Mandatory Prepayment, (cc) bearing
interest at the Interest Rate, and (dd) maturing on the Maturity Date.
As used herein:
(a) "Cash Flow of Borrower" shall mean, with respect to any Computation
Period, the excess (if any) of the cash gross revenues. actually
received by Borrower from the operation of the Premises during such
Computation Period over the sum of the expenses and the Federal, state
and local income taxes of Borrower paid or accrued (in accordance with
generally accepted accounting principles, consistently applied), during
such Computation Period; provided, that (1} tenant security deposits
shall not be treated as gross revenues until forfeited or applied to past
due rent, (2) depreciation shall not be deducted as an expense, (3)
payments of principal and interest during the Computation Period on
any indebtedness for borrowed money by Borrower shall not be deducted
as an expense, (4) capital expenditures and payments made by Borrower
during the Computation Period shall not be deducted as an expense, (5)
internal expenses associated with the ownership or management of the
Premises shat! not be deducted as an expense, (6) extraordinary gains
and losses and any gains or losses from the sale or disposition of
assets other than in the ordinary course of business hall not be treated
as gross revenues or an expense (as the case may be) and (7) a
management fee not to exceed three (3%) percent shall be included as
an expense. In the calculation of Cash Flow of Borrower, the greater of
(x) a vacancy rate and collection loss equal to five (5%) percent, or (y)
the actual vacancy rate and collection loss shall be used.
(b) "Computation Period" shall mean each successive twelve (12) month
period commencing on November 27, 2017.
(c) "Debt Service Coverage Ratio" shall mean the debt service coverage
ratio equal to 1.20x to 1.0x or greater shall exist for the trailing twelve
(12) month period, based upon the Cash Flow of Borrower.
(d) "Debt Service on the Loan" shall mean the actual principal and interest
paid or payable under the Loan bearing interest at the Interest Rate,
during the Computation Period, payable on a direct reduction basis over
a thirty (30) year amortization schedule.
22. OPTION TO EXTEND INITIAL TERM OF LOAN
The Borrower shall have two (2) options to extend the Initial Term, each
extension for a period of twelve (12) months, each extension shall be subject
to the satisfaction of the following terms and conditions:
9
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
(a) Borrower shall provide written notification to the Lender of Borrower's
intention to extend the Initial Term no later than thirty (30) days prior to
the Maturity Date or Extended Maturity Date, as the case may be.
(b) There shall be no Event of Default which remains uncured under the
Loan, this Note or any other documents evidencing or securing the
Loan.
(c) Borrower shall provide evidence, satisfactory to the Lender, that the
Premises evidences a minimum DSCR of 1.20x, and if not satisfactory,
Borrower shall be enti#led to pay down the principal to achieve a DSCR of
1.20x.
(d) The Interest Rate for each extension of term shall be a fixed rate as
determined by the One (1) Year Swap Rate plus two hundred twenty
(220) basis points, with a floor rate of not less than the Initial Rate.
(e) There shall be no Prepayment Premium due during the extension
periods of the Loan.
(f) Borrower shall pay to the Lender an extension fee for each extension
equal to the amount of ten (10) basis points of the outstanding Loan
amount.
[signatures on following page]
10
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023
NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023
IN VI/ITN~SS WHEREOF, the Borrower agrees to the terms and conditions
of this Nate by signing below.
S
WITNESS: 179 LUDLOW OWNERrLLC
A New York limited Ilabillty
~~~
sse Sutton, Authorized Signatory
STATE OF NEW YORK)
)ss:
COUNTY OF NEW YORK)
On the ~~ day of November, 2017, before me, the undersigned, personally
appeared Jesse Sutton, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual hose name is subscribed to the wifihin
instrument and ac4
Preview
FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 EXHIBIT B FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 Allon~e Reference is made to that certain Note Modification Agreement dated November 27, 2017 from 179 Ludlow Owners LLC, a New York limited liability company (the "Note") payable to the order of Mercantil Commercebank, N.A., a national banking association now known as Amerant Bank, N.A. It is intended that this Allonge be attached to and made a permanent part of the Note. Pay to the order of DCR Mortgage 10 Sub 2, LLC ("Assignee"}, without recourse, representations or warranties of any kind, except as otherwise provided in that certain Asset Sale Agreement between Amarant Bank, N.A. and Assignee dated August 3, 2023. Executed this ~S ~day of August, 2023. AMERANT BANK, N.A., a national banking association ~ y. By: Print e: uardo Marino Its First Vice President FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 NOTE MODIFICATION AGREEMENT $1,950,000.00 New York, New York November 27, 2017 BORROWER: 179 LUDLOW OWNERS LLC A New York limited liability company Address: 150 Broadway, Suite 2205 City: New York State: New York Zip Code: 10038 is borrowing money from LENDER: MERCANTIL BANK, N.A., A national banking association Address: 11 East 51St Street City: New York State: New-York Zip Code: 10022 WHEREAS, the Lender is now the lawful owner and holder of the notes, bonds or other obligations (collectively, the "Notes") more particularly described in Exhibit A attached hereto, secured by the mortgages also as more particularly described in Exhibit A attached hereto (collectively, the "Mortgages"} and covering the fee estate of the Borrower in the Premises (hereinafter defined); WHEREAS, prior to the execution and delivery by the Borrower to the Lender of a certain Mortgage Modification Agreement by the Borrower to the Lender, dated the date hereof, there is presently owing on the Notes and the Mortgages the principal balance of $1,951,546.53 and accrued interest; WHEREAS, the Lender and the Borrower have agreed to modify the Notes and principal sums evidenced thereby, and to modify the time and manner of payment and terms and provisions of the Notes in the manner hereinafter set forth; and WHEREAS, the Lender and any other holder of this Note (as hereinafter defined) may transfer this Note. The word Lender includes the original Lender and anyone who takes this Note by transfer. FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, the Borrower hereby represents and warrants to and covenants and agrees with the Lender as follows: 1. BORROWER'S PROMISE TO PAY: In return for this loan, the Borrower promises to pay to the order of the Lender the principal sum of up to ONE MILLION NINE HUNDRED FIFTY THOUSAND AND 00l100THS ($1,950;000.00) DOLLARS (the "Loan"), together with interest on the unpaid principal at the interest rate set forth herein, fees and other charges payable as provided below. 2. TERM: The term of the Loan shall be from the date hereof through November 27, 2020 (the "Initial Term" and such date at the expiration (or earlier acceleration) of the term of the Loan being referred to herein as the "Maturity Date"), at which time the entire principal amount advanced, plus unpaid interest, fees and other amounts and charges specified herein shall be due and payable. 3. INTEREST: Commencing on the date hereof through the Maturity Date, interest shall accrue on the outstanding principal sum of this Note at a rate per annum equal to 4.2210°/o (the "Interest Rate"). After any default, interest shall accrue at the rate set forth in Section 10 of this Note. 4. PAYMENTS: Commencing on December 27, 2017 and on the 27th dad" of each calendar month thereafter, through and including the Maturity Date, Borrower shall pay a combined monthly installment of principal and interest in the amount of $9,629.23 based upon the Interest Rate and a thirty (30) year amortization schedule. Said payments (including prepayments) shall be applied first to escrows and other amounts due under the Note and Mortgage, then to interest, and lastly to principal. Interest from the date of closing to the end of the month of closing shall be due and payable on the date hereof. Interest on the principal shall be calculated on the basis of a 360 day year and the actual number of days elapsed. On the Maturity Date, the entire principal amount outstanding, together with all accrued and unpaid interest, fees and other amounts and changes outstanding shall be due and payable. All payments shall be made to Lender at the address shown on statements, or to such other address as may be required by Lender. Notwithstanding anything 2 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 contained herein to the contrary, Lender shall have the right, at its sole option, to apply any payment received under this Note first to any late fees, collection or other expenses to which Lender may be entitled under this Note, the Mortgage (hereinafter defined) or any other Loan Document. The making of any partial prepayment shall not change the due dates or amounts of monthly installment payments next becoming due. 5. PREPAYMENT: In the event of a sale of the Premises by Borrower prior to the Maturity Date, or any prepayments made pursuant to the provisions of this Note, this Note shall be subject to the following prepayment premiums (the "Prepayment Premium"): (i) During the first (1St) year of the Loan Term, a Prepayment Premium equal to two (2%) percent of the prepayment amount; (ii) During the second (2"d) year of the Loan Term, a Prepayment Premium equal to two (2%) percent of the prepayment amount; (iii) During the third (3rd) year of the Loan Term, a Prepayment Premium equal to one (1%) percent of the prepayment amount; Notwithstanding the foregoing, there shall be no prepayment premium in conjunction with (a) application of insurance or condemnation proceeds, (b) in the payment of the Mandatory Prepayment Amount (hereinafter defined) and (c) prepayment within ninety (90) days prior to the Maturity Date. The Prepayment Premium shall be due if the Loan is accelerated due to an Event of Default by Borrower. 6. LATE CHARGES: If the Lender does not receive any monthly payment (excluding any principal payments due on the Maturity Date) within twenty (20) days of its due date, then for each such late payment the Borrower shall pay a late charge. The late charge shall be equal to five (5%) percent of such overdue amount. Acceptance by Lender of a late payment shall not be deemed or considered an election of remedies or waiver by Lender of rights at law, ar under this Note or the Mortgage. For the avoidance of doubt, there shall be no late fee incurred in connection with the acceleration of the Loan or upon any payment due on the Maturity Date. 3 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 7. SECURITY FOR NOTE: As security for the payment of this Note, the Borrower is giving that certain Mortgage Consolidation and Modification Agreement (the "Mortgage") to the Lender, dated the date of this Nofe, executed by the Borrower, and is entering into certain other agreements collateral to this Loan, more particularly described in the Mortgage (collectively, the "Loan Documents"). The Mortgage covers the property (collectively, the "Premises") owned by the Borrower at: Address: 179 Ludlow Street, Unit C, Lot 1101, Block 412 Borough. Manhattan County: New York State: New York The Premises are more particularly described in the Mortgage. This Note shall evidence and the Mortgage shall secure the indebtedness described herein and any future loans or advances that may be made to or on behalf of the Borrower by the Lender at any time or times hereafter under the Mortgage and any such loans and advances shall be added to and shall bear interest at the same rate per annum as the principal indebtedness hereunder subject to any increase expressly provided for in this Note or the Mortgage. As additional security for payment of this Note, the Borrower is giving to Lender a valid fully-perfected first lien on the chattels, fixtures, personal property and equipment appurtenant to the Premises now or hereafter located thereon owned by Borrower and used in the maintenance and operation of the Premises including, but not limited to, heating apparatus, air-conditioners, ventilation systems and other equipment of similar nature by way of a real estate mortgage, financing statements and security agreement. 8. PAYMENT OF TAXES AND OTHER CHARGES: (a) Borrower agrees with Linder: (i) to pay the Lender, at the time of each monthly payment, one-twelfth (1/12') of the current annual real estate taxes and assessments, levied and assessed against the Premises, and if insurance is not either prepaid or provided through a blanket policy of insurance, one twelfth (1/121") of the insurance premium for the Premises including flood insurance if applicable, as reasonably estimated by Lender from current bills; (ii) to claim no deduction. upon the assessed value of such Premises on account of the monies owning hereon; (iii) to pay all taxes, assessments, water and sewer charges, insurance and other governmental charges levied or assessed against the Premises within ten (10) days after the' same shall have become due and payable, except those which Lender is escrowed for; (iv) to keep the building on the Premises insured for the benefit of the Lender as more particularly set forth in the Mortgage and to maintain such other insurance as may be required under the Mortgage, including, without limitation, flood insurance, if applicable by insurers 4 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 and in amounts reasonably approved by the Lender, and to deliver such policy or policies of insurance to the Lender; and (v) to keep the building on the Premises in good repair and in a condition reasonably satisfactory to the Lender. (b) The Borrower further agrees that, should thirty (30) days default be made in the payment of any such tax, assessment, rents or other governmental charges (to the extent such moneys are not being then held by Bank), or in the payment of a premium for such insurance, not escrowed by Lender, or should any default (after notice to Borrower and reasonable opportunity to cure) be made in the obligation to keep the Premises in satisfactory repair and condition, then the Lender may pay such amount or amounts and the amount so paid shall be added to the amount owing hereunder and shall be due and payable on demand, with interest at the Default Rate defined below. Notwithstanding the foregoing, Borrower shall not be required to pay and discharge any such tax, assessment, rents or other governmental charges, if and so long as (i) the validity thereof shall be contested by Borrower with diligence and in good faith by appropriate proceedings and (ii) Borrower shall have deposited with Lender a sum equal to the amount being so contested and any additional charge, penalty or expense which may be incurred as a result of such contest; and provided further, however, that any such tax, assessment, rents or other governments! charges and any such additional charge, penalty or expense shall be paid in full before the Premises, or any part thereof, shall be seized and sold in satisfaction thereof. 9. LENDER'S RIGHT OF ACCELERATION: The Lender may declare the unpaid principal, interest, fees, and other amounts and charges specified under this Note due immediately upon the occurrence of an Event of Default, as defined in the Mortgage. This right is called acceleration. The Lender's failure to accelerate due to any Event of Default shall not prevent the Lender from doing so for a later Event of Default. 10. DEFAULT RATE: During the existence of an Event of Default hereunder or under the Loan Documents (as defined in the Mortgage), interest as of the date of said Event of Default shall accrue on the unpaid balance of the Loan at a rate equal to the lesser of twenty-four (24%) percent over the current rate or the maximum rate permitted by applicable law, as the case may be ("Default Rate"). ~ 1. WAIVER OF FORMAL ACTS: The Lender is not required to do any of the following before enforcing the Lender's rights under this Note, except as sef forth in the Loan Documents: (a) To demand payment of amounts due (known as Presentment); ~~ FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 (b) To give notice that amounts due have not been paid (known as Notice of Dishonor); or (c) To obtain an official certificate of non-payment (known as Protest). 12. TRIAL BY JURY: THE BORROWER AND LENDER AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY LENDER OR THE BORROWER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. THE LENDER AND THE BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, THE BORROWER AND LENDER WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR fN ADDITION TO, ACTUAL DAMAGES. THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT THE LENDER WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE. 13. RESPONSIBILITY UNDER NOTE: If more than one Borrower signs this Note, each one is obligated to pay the amount due under the Note. This Note is the joint and several obligation of the Borrower and the Lender may enforce this Note against any one or more Borrower separately or against all Borrowers together. The provisions of Section 10.20 of the Mortgage are incorporated herein. 14. CHANGE: This Note cannot be changed except in writing signed by the Borrower and the Lender, except that Lender may grant extensions in the time of payment of and reduction in the rate of interest on the monies due and owed under this Note. 15. COST OF COLLECTION: {f the Lender has to consult an attorney (but excluding in the administration of the Loan), or go to court, or if the Borrower fails to comply with the terms of this Note, the Borrower will pay all Lender's actual out of pocket collection costs, 6 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 plus reasonable attorneys' fees and disbursements, including, but not limited to any fees incurred in connection with pre-judgment and post-judgment collection costs. 16. GOVERNING LAW: This Note is to be construed and enforced according to and governed by the laws of the State of New York. 17. RIGHT OF SETOFF: The Lender shall have the right to apply any monies of the Borrower limited to accounts related to the Borrower's ownership, operation and management of the Premises which the Lender may have on deposit against any amounts which may be past due under this Note, or hold as security for the payment hereof any other property heretofore or hereafter delivered by the Borrower into the custody, control or possession of the Lender for any reason or purpose whatsoever. 18. ADDITIONAL FINANCING: Except as may otherwise be provided in the Loan Documents, during the term of this Note the Borrower shall not obtain any secondary financing, and no subordinate liens or encumbrances or use of credit that would result in a lien on the Premises. Upon an Event of Default, at the option of the Lender, the unpaid principal, interest, fees, and other amounts and charges under this Note shall be immediately due and payable in full. 19. CROSS DEFAULT: Any default (after giving effect to any applicable notice and cure period), in any obligation under any of the Loan Documents or any other obligations of Borrower to Lender, (the "Obligations"), shall consititute an Event of Default hereunder, giving the Lender the right and option to accelerate this obligation and declare the then unpaid balance due, and shall entitle Lender to declare the Mortgage and accompanying Note which it secures immediately due and payable. This covenant shall be effective without the execution of any further assurance, amendment of mortgage or any affirmative action by Borrower. In the event of an Event of Default, such Event of Default shall constitute an Event of Default under the Obligations and Lender at its option, may declare all such Obligations and mortgages securing the same immediately due and payable. 20. LOAN CHARGES: Any and all payments under the Loan Documents, including without limitation, the Interest Rate,. the Default Rate, late charges and. any other charges or 7 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 amounts due hereunder constitute material covenants of the Loan and are: (1) a material inducement for the Lender to enter into this Loan; (2) the Lender would not have entered into this Loan without the Borrower's agreement and covenant to make the payments as specified in the Loan Documents; (3) some additional payments, such as the Default Rate, are deemed by the Lender as compensation to the Lender for the increased risk associated with this Loan not being timely repaid- and (4) the additional payments represent reasonable estimates to the Lender in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the Loan. If the Loan is subject to a !aw which sets maximum loan charges, and that law is finally interpreted so that the interest or other charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under this Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge under this Note. 21. DEBT SERVICE COVERAGE RATIO. Borrower shall maintain a minimum Debt Service Coverage Ratio (the "DSCR", as hereinafter defined) equal to 1.20x to 1.0x tested annually on a thirty (30) year amortization period for each Computation Period (as hereinafter defined) on the basis of actual Net Operating Income of the Property, as determined by the fiscal year ending accountant certified operating statement or Borrowers' tax returns based upon a thirty (30) year amortization schedule and actual interest rate. In the event that the Lender shall reasonably determine that the DSCR shall at any time be less than 1.20x to 1.0x tested based on the remaining term of a thirty (30) year amortization schedule, the Lender shall notify the Borrower in writing of such non-compliance with the DSCR covenants (the "Mandatory Prepayment Notice"). Within fifteen (15) days of the giving of the Mandatory Prepayment Notice, the Borrower shall make a prepayment of this Note ("the Mandatory Prepayment") in an amount, as reasonably determined by the Lender and set forth in the Mandatory Prepayment Notice, which, after the giving effect to such prepayment and the resulting reduction in the constant monthly payment of principal and interest due hereunder, shall result in the DSCR being 1.20 x 1.0 or greater. On the making of such Mandatory Prepayment (which prepayment shall not include the prepayment premiums set forth herein), the constant monthly payment of principal and interest payable hereunder shall be recalculated by the Lender so as to equal a sum which would be payable under aself-amortizing loan over the remainder of ~'3 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 the thirty (30) year amortization schedule (aa) made on the date of such Mandatory Prepayment, (bbd in the principal amount of the sum of this Note outstanding after giving effect to such Mandatory Prepayment, (cc) bearing interest at the Interest Rate, and (dd) maturing on the Maturity Date. As used herein: (a) "Cash Flow of Borrower" shall mean, with respect to any Computation Period, the excess (if any) of the cash gross revenues. actually received by Borrower from the operation of the Premises during such Computation Period over the sum of the expenses and the Federal, state and local income taxes of Borrower paid or accrued (in accordance with generally accepted accounting principles, consistently applied), during such Computation Period; provided, that (1} tenant security deposits shall not be treated as gross revenues until forfeited or applied to past due rent, (2) depreciation shall not be deducted as an expense, (3) payments of principal and interest during the Computation Period on any indebtedness for borrowed money by Borrower shall not be deducted as an expense, (4) capital expenditures and payments made by Borrower during the Computation Period shall not be deducted as an expense, (5) internal expenses associated with the ownership or management of the Premises shat! not be deducted as an expense, (6) extraordinary gains and losses and any gains or losses from the sale or disposition of assets other than in the ordinary course of business hall not be treated as gross revenues or an expense (as the case may be) and (7) a management fee not to exceed three (3%) percent shall be included as an expense. In the calculation of Cash Flow of Borrower, the greater of (x) a vacancy rate and collection loss equal to five (5%) percent, or (y) the actual vacancy rate and collection loss shall be used. (b) "Computation Period" shall mean each successive twelve (12) month period commencing on November 27, 2017. (c) "Debt Service Coverage Ratio" shall mean the debt service coverage ratio equal to 1.20x to 1.0x or greater shall exist for the trailing twelve (12) month period, based upon the Cash Flow of Borrower. (d) "Debt Service on the Loan" shall mean the actual principal and interest paid or payable under the Loan bearing interest at the Interest Rate, during the Computation Period, payable on a direct reduction basis over a thirty (30) year amortization schedule. 22. OPTION TO EXTEND INITIAL TERM OF LOAN The Borrower shall have two (2) options to extend the Initial Term, each extension for a period of twelve (12) months, each extension shall be subject to the satisfaction of the following terms and conditions: 9 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 (a) Borrower shall provide written notification to the Lender of Borrower's intention to extend the Initial Term no later than thirty (30) days prior to the Maturity Date or Extended Maturity Date, as the case may be. (b) There shall be no Event of Default which remains uncured under the Loan, this Note or any other documents evidencing or securing the Loan. (c) Borrower shall provide evidence, satisfactory to the Lender, that the Premises evidences a minimum DSCR of 1.20x, and if not satisfactory, Borrower shall be enti#led to pay down the principal to achieve a DSCR of 1.20x. (d) The Interest Rate for each extension of term shall be a fixed rate as determined by the One (1) Year Swap Rate plus two hundred twenty (220) basis points, with a floor rate of not less than the Initial Rate. (e) There shall be no Prepayment Premium due during the extension periods of the Loan. (f) Borrower shall pay to the Lender an extension fee for each extension equal to the amount of ten (10) basis points of the outstanding Loan amount. [signatures on following page] 10 FILED: NEW YORK COUNTY CLERK 12/14/2023 02:16 PM INDEX NO. 850662/2023 NYSCEF DOC. NO. 3 RECEIVED NYSCEF: 12/14/2023 IN VI/ITN~SS WHEREOF, the Borrower agrees to the terms and conditions of this Nate by signing below. S WITNESS: 179 LUDLOW OWNERrLLC A New York limited Ilabillty ~~~ sse Sutton, Authorized Signatory STATE OF NEW YORK) )ss: COUNTY OF NEW YORK) On the ~~ day of November, 2017, before me, the undersigned, personally appeared Jesse Sutton, personally known to me or proved to me on the basis of satisfactory evidence to be the individual hose name is subscribed to the wifihin instrument and ac4