Preview
INDEX NO. E2024006164
NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024
MONROE COUNTY CLERK’S OFFICE THIS IS NOT A BILL. THIS IS YOUR RECEIPT.
Receipt # 3820051
Book Page CIVIL
Return To: No. Pages: 20
JOHN KEVIN MCANDREW
1900 Bausch & Lomb Place Instrument: EXHIBIT(S)
Rochester, NY 14604
Control #: 202404111054
Index #: E2024006164
Date: 04/11/2024
TOMPKINS COMMUNITY BANK Time: 1:45:11 PM
S & A HOSPITALITY INC.
PATEL, SHAILESH N.
PATEL, MICKEYBEN S.
TOWPATH MOTEL INC.
NEW YORK STATE DEPARTMENT OF TAXATION AND
FINANCE
Total Fees Paid: $0.00
Employee:
State of New York
MONROE COUNTY CLERK’S OFFICE
WARNING — THIS SHEET CONSTITUTES THE CLERKS
ENDORSEMENT, REQUIRED BY SECTION 317-a(5) &
SECTION 319 OF THE REAL PROPERTY LAW OF THE
STATE OF NEW YORK. DO NOT DETACH OR REMOVE.
JAMIE ROMEO.
MONROE COUNTY CLERK
MOT
ONRO OUN 04 024 INDE&& NOE 2624026005 164
MYSCEF BOC. NO. 14 RECEIVED NYSCEF: 04/11/2024
ee ne _ a
EXHIBIT A
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NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024
PROMISSORY NOTE
Rochester, New York
$ 1,500,000.00 Date November 8, 2018
I. PROMISE TO PAY
FOR VALUE RECEIVED, and intending to be legally bound, S & A HOSPITALITY INC.,
a New York corporation duly organized and validly existing under the laws of the State of New
York, having an office located at 10 Falconbridge Drive, Pittsford, New York 14534 (“Borrower”),
promises to pay to the order of THE BANK OF CASTILE, a New York banking corporation
having an office at 133 North Center Street, Perry, New York 14530 (“Lender”), on or before the
Maturity Date (hereinafter defined), in lawful money of the United State of America, the principal
sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS U.S.
($1,500,000.00) or the principal amount of all advances made by Lender to Borrower from time to
time (each a “Loan” or collectively “Loans”) plus interest thereon from the date hereof, until the
indebtedness evidenced hereby is paid in full.
IL. DEFINITIONS
When used in this Note, the following terms shall have the meanings indicated for each of
them:
oe _ - _
2.1 Business Day: A day on which commercial banks ate not authorized or required to
close in New York State.
2.2 FHLB Rate: A fixed rate of interest determined by Lender to be the Regular Fixed
Advance Rate offered by the Federal Home Loan Bank of New York (as reported on a weekly
average basis) for instruments having a term of Ten (10) years most recently available on the day
which is two (2) Business Days immediately preceding the date for such determination.
23 Guarantor: Towpath Motel, Inc., Shailesh N. Patel and Mickeyben S. Patel.
2A Interest Rate: The rate of interest set forth in Section 3 hereof.
2.5 ndebtedness: All loans, advances, debts, liabilities, indebtedness, obligations, and
credit owing by Borrower to Lender of any kind or nature, present or future, whether as borrower
or guarantor, however evidenced, whether arising hereunder or any other loan, note, letter of credit,
guaranty, collateral or other agreement or by operation of law, and whether direct or indirect,
absolute or contingent, due or to become due, now owing or existing or hereafter arising or created
and however acquired, and any amendments, extensions, renewals or increases thereof, including,
without limitation, all principle, interest, charges, expenses, commitment or facility fees, collateral
management or other fees, treasury management obligations, obligations due pursuant to any interest
rate protection agreement, reasonable attorneys’ fees and expenses related to the collection of the
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foregoing, and any other amounts payable by Borrower whether executed in connection herewith or
otherwise (collectively the “Indebtedness”).
2.6 Loan Term: Commencing on the date hereof and ending on the Maturity Date.
27 Loan Documents: Any and all documents executed and delivered by Borrower,
MONROE COUNTY INDUSTRIAL DEVELOPMENT CORPORATION, (the “Agency”) and
any Guarantor in connection with the Loan, including but not limited to this Note, the First
Mortgage and Security Agreement from Borrower and the Agency to Lender, The General Security
Agreement, the Financing Statements, the First Assignment of Leases and Rents from Borrower and
the Agency to Lender, the Guaranty of Payment and Performance and the Environmental
Compliance and Indemnification Agreement, (together with any and all other documents and
instruments executed simultaneously herewith or previously executed and/or delivered in connection
with the Loan evidenced by this Note, and all amendments and supplements thereof).
2.8 Maturity date: December 1, 2038.
2.9 Note: This Promissory Note and ali amendments, supplements, renewals, replacements
or modifications thereof. The Indebtedness evidenced by this Note is secured by certain of the Loan
Documents and all of the covenants, conditions and agreements contained in all of the Loan
Documents are hereby made a part of and incorporated into this Note by this reference. Reference
is hereby made to the Loan Documents for a description of the security and the collateral covered
thereby, the rights of Lender and obligations of Borrower in respect thereto, but neither this reference
_ __to.the Loan Documents nor any provisions thereof shall affect or impair the obligation of Borrower
to pay the principal and interest of this Note and all other sums or charges hereunder when due and
payable in accordance with the terms and conditions hereof.
2.10 Mortgage: The first lien mortgage encumbering the Property made by Borrower
and Agency and given to Lender of even date herewith to secure this Note.
2.11 Property: That certain real property and the improvements thereon located at 2729
Monroe Avenue, Rochester, New York 14618. (the “Property”).
If. INTEREST RATE AND ACCRUAL _
3.1 Interest Accrual; Interest shall accrue at the applicable Interest Rate on the outstanding
principal balance hereof until paid in full. Borrower shall pay interest, calculated on the basis of a
360-day year (consisting of 12 months of 30 days each) for the actual number of days of each year
(365 or 366, as applicable), on the outstanding principal amount from and including the date of this
Note to, but not including, the date the outstanding principal amount is paid in full. Interest will be
payable monthly.
3.2 Interest Rate: From the date of the Note through and including the next Adjustment
Date (as defined below), interest shall accrue on the outstanding principal balance hereunder at a
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fixed rate equal to the current FHLB Rate plus two and one half per cent (2.50%) per annum (“Period
One”).
The interest rate will adjust as of December 1, 2028 (each an “Adjustment Date”) to the annual
interest rate equal to the then current FHLB Rate (as determined by Lender two (2) Business Days.
prior to each Adjustment Date) plus two and one half per cent (2.50%) per annum (“Period Two”).
Interest Rate Floor: Notwithstanding the foregoing, at no time during the Loan Term
will the rate at which interest accrues be less than four and a quarter per cent (4.25 %) per annum.
3.3 Rate Not Available: If any interest rate index is not available, a similar rate based
upon a comparable index selected by Lender in its sole discretion will be utilized.
34 Maximum Rate of Interest: It is intended that the rate of interest hereon shall never
exceed the maximum rate, if any, which may be legally charged on the loan evidenced by this Note
(“Maximum Rate”), and if the provisions for interest contained in this Note would result ina rate
higher than the Maximum Rate, interest shall nevertheless be limited to the Maximum Rate and any
amounts which may be paid toward intetest in excess of the Maximum Rate shall be applied to the
reduction of principal, or, at the option of Lender, returned to Borrower.
IV. PAYMENT TERMS
41 Payments:
_
— ‘(@) ~“Onthe date hercof, Borrower shall pay! Lender interest accrued from the date
hereof through and including November 30, 2018. Commencing on January 1, 2019 through and
including the Maturity Date, Borrower shall make monthly payments of principal and interest to
Lender in the amount necessary to repay the unpaid principal balance of the Loan and all accrued
interest thereon at the then applicable interest rate and based on a twenty (20) year amortization
period, with such payments to be adjusted on each Adjustment Date in an amount necessary to fully
amortize the remaining principal balance of the Loan over the remainder of the original twenty (20)
year amortization period at the adjusted interest rate. Payments shall be applied first to interest, then
to late fees, if any, then to principal, then to tax and insurance escrow payments, if any, and then to
prepayment premiums.
() All outstanding principal, interest and all other amounts due hereunder and
the documents securing the Loan, shall be due and payable on the Maturity Date, if not sooner paid.
42 Real Estate Tax Account: Lender will engage, at Borrower’s expense, for a
lifetime monitoring service to monitor real property tax accounts affecting the Property. Borrower
will pay to Lender by depositing into a non-interest bearing deposit account with Lender
(‘Imposition Account”) on the first day of each month during the term hereof, a sum equal to one-
twelfth (1/12) of the annual aggregate amount, as estimated from time to time by Lender, of the
aggregate of all taxes, assessments, and sewer charges (collectively “Impositions”) on the Property,
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which will be held by Lender and applied by Lender to the payment of such Impositions as they
become due and payable. Ifat any time such payments shall be deemed by Lender to be insufficient
to pay such Impositions, Borrower will pay the amount of such deficiency, on demand, to Lender.
43 Due Date: All Indebtedness owed to Lender hereunder and not paid before the
Maturity Date shall be due and payable on the Maturity Date.
44 Prepayments:
This Note may be prepaid in whole or in part during the Loan Term, provided,
however, that in the event a prepayment results from a refinancing by a competitor to Lender,
Borrower shall also pay Lender a prepayment premium based on the following percentage of the sum
prepaid. For purposes of this Section, Loan Year One shall be deemed to mean the first twelve (12)
full calendar months following the date hereof. Each twelve (12) month period thereafter shall be
deemed a Loan Year.
Loan Term: Prepayment ium 1
Loan Year One 5% of the amount prepaid
Loan Year Two 4% of the amount prepaid
Loan Year Three 3% of the amount prepaid
Loan Year Four 2%of the amount prepaid
Loan Year Five 1% of the amount prepaid
Commencing in Loan Year Six, no prepayment premium shall be due from Borrower
for anyypaymm
payment sof the Indebtedness made as a resultof the application of insurance proceeds or
condemnation awards toward the Indebtedness.
Notwithstanding the above, no prepayment premium will be assessed if the principal
payments are made from excess of cash flow, or a prepayment as a result of the SBA 504 Loan
(hereinafter defined).
45 Application: Business Day: All payments hereon shall be made, and all notices to
Lender required or authorized hereby shall be given, at the office of Lender at the address designated
in the heading of this Note, or to such other place as Lender may from time to time direct by written
notice to Borrower. All payments shall be made absolutely net of, without deduction or offset and
free and clear of taxes, deductions, charges or withholding of any kind. Lender shall apply all
payments received on this Note to any accrued and unpaid interest then due and owing, then to late
fees, if any, then to the reduction of principal of this Note, then to tax and insurance escrow
payments, if any, then to prepayment premiums and then to other sums due hereunder in such order
and in such amounts as Lender may determine from time to time. The sum or sums shown on
Lender’s records shall be evidence of the correct unpaid balances of principal and interest on this
Note, absent manifest error. If any payment comes due on a day that is not a Business Day, as
defined below, Borrower may make the payment on the first Business Day following the payment
date and pay the additional interest accrued to the date of payment.
46 Costs and Expenses: Borrower agrees to pay on demand all costs and expenses of
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every kind and nature, including, without limitation, attorneys’ fees and disbursements incurred by
Lender in retaining counsel for advice, suit, appeal, insolvency proceedings, or any other purpose
described in this Section or incurred by Lender (a) in enforcing this Note, (b) in collecting any
Indebtedness evidenced hereby from Borrower or any Guarantor, (c) in realizing upon or protecting
any collateral for the payment of this Note, and (d) for any other purpose relating hereto.
47 Collection Periods: Any check, draft, money order or other instrument given in
payment of all or any portion hereof may be accepted by Lender and handled for collection in the
customary manner, but the same shall not constitute payment hereunder or diminish any rights of
Lender except to the extent that actual cash proceeds of such instrument are unconditionally received
by Lender; provided, however, that this Note shall not be in default as the result of normal collection
periods on such instruments.
48 Late Payment Charge: If any payment due under this Note is unpaid for ten (10) days
or more, Borrower shall pay, in addition to any other sums due under this Note (and without limiting
Lender’s other remedies on account thereof), a late charge of $25.00 or an amount equal to five per
cent (5%) of such unpaid amount, whichever is greater. The late charge shall become immediately
due to Lender, at Lendet’s sole option, as agreed compensation to Lender for the additional costs and
expenses reasonably expected to, be incurred by Lender by reason of such nonpayment, such as in
contacting Borrower and arranging for and processing remedial payment. Borrower acknowledges
that the exact amount of such costs and expenses may be difficult, if not impossible, to determine
with certainly, and further acknowledges and confesses the amount of such charge to be a
consciously considered, good faith estimate of the actual damage to Lender by reason of such default.
The payment of such late charge shall be secured by the Loan Documents, shall be payable on
demand, but
in any event not later than the due date of the next regularly scheduled monthly payment
hereunder, and shall apply only to monthly installments due and payable hereunder prior to any
acceleration by Lender of the Indebtedness evidenced hereby. Whether or not expressed, this
election shall not impair the Lender’s further right to interest on the unpaid amount at the Default
Rate (defined below) from the date such payment was due through the date of actual payment.
49 Default Interest: Borrower hereby agrees that in the event any payment due
hereunder is not paid when due or the entire Indebtedness evidenced by this Note is not paid when
due, then the rate of interest on this Note, at Lender’s option, without notice or demand, which is
hereby expressly waived, shall be increased to be equal to the sum of three (3) percentage points plus
the interest rate otherwise applicable on the Loan or the highest rate which the parties may agree
under applicable law, whichever is less, and such tate shall continue to apply whether or not
judgment shall be entered on this Note, until such time as Borrower’s payment default is cured.
Borrower shall be obligated thereafter to pay interest on the then unpaid principal balance of this
Note at the Default Rate, to be computed from the due date through and including the date of actual
receipt of the overdue payment, whether a monthly payment or the entire Indebtedness. Nothing
herein shall be construed as an agreement or privilege to accelerate or extend the date of the payment
of any installment of, or the entire Indebtedness, nor as a waiver of any other right or remedy
accruing to Lender by reason of any such default.
4.10 Sale of the Property: If Borrower elects to sell a Parcel or Parcels, the amount of
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prepayment due to Lender shall be determined by Lender, in Lender’s reasonable discretion, based
on the ratable value of the Parcels ascribed in appraisals to be conducted at the time of the proposed
sale.
V. EVENTS OF DEFAULT
The happening of any of the following events or occurrence of the following conditions, shall
be events of default hereunder (individually, an “Event of Default” and collectively “Eventsof
efault”):
@) Nonpayment: Nonpayment of principal of, interest on, or any fee or premium
provided for under this Note within ten (10) days after such amount is due, whether by acceleration
of otherwise.
(b) Failure to Perform Other Covenants: If Borrower shall continue to fail to perform
or be in default under any of the other terms, covenants or conditions of this Note for ten (10) days
after notice from Lender in the case of any default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other default, provided that
if such default is susceptible to cure and cannot reasonably be cured within such thirty (30) day
period and Borrower shall have commenced to cure such default within such thirty (30) day period
and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period
shall be extended for so long as it shall require Borrower in the exercise of due diligence to cure such
default, but in any event not more than sixty (60) days.
a
(©) Default under Related Documents: An Event of Default, uncured at the end of any
applicable notice and cure period, under any Loan Document, loan agreement, security agreement
or other document evidencing or securing this Note. A default under this Note shall, at the option
of Lender, also constitute a default under any or all of the other Loan Documents. In additional to,
and not in limitation of, the foregoing, a default under any or all of the Loan Documents shall, at the
option of Lender, constitute a default under this Note.
@) Termination; Death: Incompetency: If Borrower or any entity Guarantor is dissolved,
terminates its operations or for any reason ceases to exist, or the death or judicial declaration of
incompetency of any Guarantor of this Note, if an individual.
©) Bankruptcy Proceedings: (i) If Borrower, any Guarantor hereof, or any general partner
of Borrower or such Guarantor (each a “Loan Party”) shall (A) file a petition or request for
liquidation, reorganization, adjustment of debts, arrangement, adjudication as a bankrupt or similar
relief under the bankruptcy, insolvency or similar laws of the United States of America or any state
or territory thereof or any foreign jurisdiction now or hereafter in effect, (B) consent to the filing of
a petition in any bankruptcy, liquidation, reorganization or insolvency proceedings, (C) consent to
the appointment of a receiver, trustee, agent or officer performing similar functions with respect to
any substantial part of its assets, (D) make a general assignment for the benefit of its creditors, or (E)
institute or execute a consent to any other type of insolvency proceedings (under the federal
Bankruptcy Code or otherwise) or any formal or informal proceeding for the dissolution or
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liquidation of, or settlement of claims against or winding up of affairs of, Borrower; or (ii) the
appointment of a receiver, custodian, trustee or officer performing similar functions for Borrower
or any other Loan Party or for any of their respective assets; or the filing against Borrower or any
Guarantor hereof, or any general partner of Borrower or such Guarantor of a request or petition for
liquidation, reorganization, arrangement or adjudication as a bankrupt or other relief under the
bankruptcy, insolvency or similar laws of the United States of America, or any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect or the institution against Borrower or
any other Loan Party of any other type of insolvency proceeding (under the Bankruptcy Code or
otherwise) or any formal or informal proceeding for the dissolution or liquidation of, settlement of
claims against or winding up the affairs of Borrower or any other Loan Party, and the failure to have
such appointment vacated or such petition or proceeding dismissed within sixty (60) days after such
appointment, filing or institution.
Insolvency: If Borrower, any Guarantor hereof, or any general partner of Borrower
or such Guarantor shall (i) become “insolvent” as defined in any applicable state or federal statute;
(ii) engage in any business or transaction for which the assets retained by it shall constitute an
unreasonably small capital, taking into consideration the obligations to Lender under this Note and
any other document evidencing indebtedness of such person; (iii) incur debts beyond its ability to
pay them as they mature; or (iv) fail to own property having a value at both fair valuation and at fair
salable value in the ordinary course of its business greater than the amount required to pay its debts
as they become due.
ions: If any certificate, statement, representation, warranty or financial
statement furnished by or on behalf of Borrower pursuant to or in connection with this Note
—_ ____(including,
neludin without limitation, representations and warranties contained herein) or as a inducement
to Lender or any affiliate of lender (“Lender Affiliate”) to enter into any lending agreement with
Borrower shall prove to have been false in any material respect at the time as of which the facts
therein set forth were certified, or to have omitted any material contingent or unliquidated liability
or claim against Borrower, or if on the date of the execution of this Note there shall have been any
materially adverse change in any of the facts disclosed by any such statement or certificate, which
change shall not have been disclosed by Borrower to Lender at or prior to the time of such executing.
@) Intentionally Omitted.
(i) Judgments: If any judgment or judgments (other than any judgment for which it is
fully insured) against Borrower remains unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of thirty (30) days.
Guarantor Default: Any guaranty of this Note shall cease, for any reason, to be in
effect without the prior consent of Lender, or any Guarantor or Borrower shall so assert in writing;
or any Guarantor shall die or become incapacitated, incarcerated and Lender and Borrower, and, if
necessary, an authorized representative of the Guarantor or the Guarantor’s estate, shall have failed
to agree to a replacement guaranty, cash collateral or other arrangement satisfactory to Lender as an
adequate substitution for the guaranty of such Guarantor; or any Guarantor shall fail (prior to the
expiration of any applicable cure period) to perform or observe any covenant contained in the
guaranty to which such Guarantor is a party; or any representation, warranty or financial statement
made or furnished by a Guarantor in connection with this Note or the applicable guaranty shall prove
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to have been false in any material respect, or to have omitted any material contingent or unliquidated
liability.
&) Challenge to Collateral Documents: If Borrower, or any Guarantor, or any other
person providing collateral support for Borrower’s obligations hereunder (the “Obligor”) directly or
indirectly, shall challenge, or indicate their intention to challenge, the validity and binding effect of
any provision of this Note or any document evidencing or securing Borrower’s indebtedness under
this Note (each a “Collateral Document” and collectively, the “Collateral Documents”) or this Note
or the Collateral Documents shall for any reason (except to the extent permitted by their express
terms) cease to be effective or cease to have the priority lien position required by the terms thereof.
Q Change of Ownership: If there is a change in the ownership of Borrower or any
Guarantor, other than as expressly permitted under the Loan Documents.
(m) Termination of Business: If Borrower or any Obligor terminates its business or ceases
to operate as a going concern.
@) Non- with C If Borrower or any Guarantor fails to
comply with any of the provisions set forth in the commitment letter from Lender dated May 1, 2018,
and as the same may be amended from time to time, it being understood that the terms of said
commitment letter are hereby incorporated in this Note and, to the extent that any of the terms of the
commitment letter are in conflict with the terms of this Note, the terms of this Note shall prevail.
(0) Failure to Repay Interim Loan. If Borrower fails to repay the earlier of, an interim
Joan with Lender
ne in the amount of One Million Fifty Thousand and NO0/100 Dollars U.S,
~ ($1,050,000.00) (“Interim Loan”), either (i) pursuant to an SBA 504 Loan (# 28042370-09) (“SBA
Loan), or (ii) within six (6) months of even date herewith, (unless extended, in writing by Lender,
in Lendez’s sole discretion).
Upon the occurrence of any Event of Default (other than an Event of Default under
paragraphs (d) or (e) above), Lender shall have the absolute right, at its option and in its sole
discretion, to declare immediately due and payable all unpaid amounts of principal and interest on
this Note, and all other sums payable at the time of, or as the result of, such declaration under this
Note or any other document securing the Note and, if applicable, Borrower shall no longer be
permitted to obtain Loans hereunder. Upon the happening of one or more Events of Default under
paragraph (d) or (e) hereof, Lender’s obligations hereunder shall be cancelled immediately,
automatically and without notice, and all amounts outstanding under this Note, and all other sums
payable at the time of, or as the result of, such declaration under this Note or any other document
securing the Note, shall become immediately due and payable without presentation, demand or
notice of any kind to Borrower. Lender may, in its sole discretion, exercise alternately or
cumulatively any of the remedies available under this Note or any other document sectiring the Note,
or at law or equity. The failure to exercise one or more of such remedies upon the happening of an
Event of Default shall not constitute a waiver of the right to exercise the same at any subsequent time
in respect of the same Event of Default or any other Event of Default. Neither the acceptance by
Lender of any payment hereunder which is less than payment in full of all amounts due and payable
at the time of such payment, or any negotiation or discussion with Borrower, shall constitute a
waiver of the right to exercise one or more of such remedies at that time or at any subsequent time
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or nullify any prior exercise of any remedy, except as and to the extent otherwise provided by law.
VI. LOAN COVENANTS
6.1 Financial Statements: Borrower and Guarantor will furnish to Lender Financial
Statements as follows:
(a) BORROWER: Borrower will also furnish to Lender annually, within ninety
(90) days of Fiscal Year End: Annual Financial Statements, which should be at least compilation
quality, and Annual State and Federal Tax Returns, inclusive of all sched jules, all shall be ina form
and substance satisfactory to Lender.
(b) GUARANTOR: Each entity Guarantor will also furnish to Lender annually,
within ninety (90) days of Fiscal Year End: Annual Financial Statements, which should be at Icast
compilation quality and Annual Federal Tax Return, inclusive of all schedules; and each individual
Guarantor will also furnish to Lender annually, within ninety (90) days of Calendar Year End:
Personal Financial Statements, and Federal Tax Returns, inclusive of all schedules, all shall be in
a form and substance satisfactory to Lender.
Borrower and each Guarantor shall provide, to Lender, full disclosure of financial information as
reasonably requested.
“Financial Statements” shall consist of: (i) balance sheets; (ii) income statements; (iii)
current rent rolls; (iv) cash flow statements; (v) statements of contingent liabilities; (vi) federal tax
_ _tetur with all schedules
ns for Borrower and each Guarantor;-(vii) such other financial information
as Lender may deem reasonably necessary. Signed Federal Income tax returns with all schedules of
the Borrower and each Guarantor are to be submitted annually by April 1".
All financial statements furnished to Lender will be prepared in accordance with GAAP,
consistently applied, be in form and content satisfactory to Lender, certified to be correct by the party
offering such statement, and include a representation that Lender may rely on such statements.
6.2 Debt Service Coverage Ratio: Borrower shall maintain a Debt Service Coverage Ratio
(the “DSCR”) of 1.30x. The DSRC shall be measured annually based on year end results for actual
net operating income and actual debt service for the Property, beginning with 12/31/18. DSCR
shall be defined as net income plus non-cash charges including depreciation and amottization, and
interest expense divided by interest expense and required principal payments due for the period
being measured. The loan covenant shall be tested upon receipt and review of financial statements
required under this Article VI. Failure to meet this covenant will result in a twenty-five (25) basis
point increase in the Interest Rate until the date of the next annual measurement.
6.3 Operating Account: Borrower will establish prior to closing the Loan and will
maintain throughout the Loan Term an exclusive operating account for the Property with Lender.
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VII. MISCELLANEOUS PROVISIONS
71 Notice: Except for any notice required under applicable law to be given in another
manner, the giving and effectiveness of any notice, elections or demands, request or other
communication which any party hereto may be required or may desire to give hereunder shall be in
writing and shall be deemed to have been properly given (a) if hand delivered or if sent by telecopy,
effective upon receipt, or (b) if delivered by overnight courier service, effective on the day following
delivery to such courier service, or (c) if mailed by United States registered or certified mail, postage
prepaid, return receipt requested, effective two (2) days after deposit in the United States mails; and
properly addressed in each case as follows:
If. to Borrower:
S & A Hospitality Inc.
10 Falconbridge Drive
Pittsford, New York 14534
Ifto Lender:
The Bank of Castile
133 North Center Street
Perry, New York 14530
or at such other address or to such other addressee as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place for the service of
notice.
“7.2 Joint and Several : Ifthere is more than one Borrower, each
of them shall be
jointly and severally liable for all amounts and obligations which become due under this Note and
the term “Borrower” shall include each as well as all of them.
7.3 Entire Agreement; Binding Effect; Severability: This Note, together with any related
loan and security agreements, guaranties, and documents ancillary thereto contains the entire
agreement between Lender and Borrower with respect to the Note, and supersedes every course of
dealing, other conduct, oral agreement and representation previously made by Lender. Borrower
agrees that in any legal proceeding, a copy of this Note kept in Lender’s course of business may be
admitted into evidence as an original. This Note is a binding obligation enforceable against Borrower
and its heirs, executors, administrators and permitted successors and assigns and shall insure to the
benefit of Lender and its successors and assigns. Ifa court deems any provision of this Note invalid,
the remainder of the Note shall remain in effect.
74 Waiver of Marshal ling of Assets: Borrower hereby waives for itself and, to the fullest
extent not prohibited by applicable law, for any subsequent lienor, any right Borrower may now or
hereafter have under the doctrine of marshalling of assets or otherwise which would require Lender
to proceed against certain property covered by any of the Loan Documents before proceeding against
any other property covered by any of the Loan Documents. Lender shall have the right to proceed,
in its sole discretion, against the property secured by any of the Loan Documents in such order and
10
INDEEXNG E 2820106006 164
NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024
in such portions as Lender may determine, without regard to the adequacy of value or other liens on
any such property, and any such action shall not in any way be considered as a waiver of any of the
rights, benefits, liens or security interests created by any of the Loan Documents.
7.5 Setoff: Without limiting its rights of setoff under New York law generally, upon and
at any time and from time to time after the occurrence and during the continuance of an Event of
Default, Lender shall have the right to place an administrative hold on, and setoff against each
obligation of Borrower hereunder and each obligation of Lender in any capacity to Borrower,
whether now existing or hereafter arising or accruing, whether or not then due and whether pursuant
to any deposit account or certificate of deposit or otherwise. Such setoff shall become effective at
the time Lender determines even though evidence thereof is not entered in the records of Lender until
later.
7.6 Waiver: Borrower hereby waives demand, presentment for payment, protest, notice
of protest, notice of nonpayment and any and all lack of diligence or delays in collection or
enforcement of this Note or the other Loan Documents, and expressly consents to any extension of
time of payment
Preview
INDEX NO. E2024006164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 MONROE COUNTY CLERK’S OFFICE THIS IS NOT A BILL. THIS IS YOUR RECEIPT. Receipt # 3820051 Book Page CIVIL Return To: No. Pages: 20 JOHN KEVIN MCANDREW 1900 Bausch & Lomb Place Instrument: EXHIBIT(S) Rochester, NY 14604 Control #: 202404111054 Index #: E2024006164 Date: 04/11/2024 TOMPKINS COMMUNITY BANK Time: 1:45:11 PM S & A HOSPITALITY INC. PATEL, SHAILESH N. PATEL, MICKEYBEN S. TOWPATH MOTEL INC. NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE Total Fees Paid: $0.00 Employee: State of New York MONROE COUNTY CLERK’S OFFICE WARNING — THIS SHEET CONSTITUTES THE CLERKS ENDORSEMENT, REQUIRED BY SECTION 317-a(5) & SECTION 319 OF THE REAL PROPERTY LAW OF THE STATE OF NEW YORK. DO NOT DETACH OR REMOVE. JAMIE ROMEO. MONROE COUNTY CLERK MOT ONRO OUN 04 024 INDE&& NOE 2624026005 164 MYSCEF BOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 ee ne _ a EXHIBIT A INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 PROMISSORY NOTE Rochester, New York $ 1,500,000.00 Date November 8, 2018 I. PROMISE TO PAY FOR VALUE RECEIVED, and intending to be legally bound, S & A HOSPITALITY INC., a New York corporation duly organized and validly existing under the laws of the State of New York, having an office located at 10 Falconbridge Drive, Pittsford, New York 14534 (“Borrower”), promises to pay to the order of THE BANK OF CASTILE, a New York banking corporation having an office at 133 North Center Street, Perry, New York 14530 (“Lender”), on or before the Maturity Date (hereinafter defined), in lawful money of the United State of America, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS U.S. ($1,500,000.00) or the principal amount of all advances made by Lender to Borrower from time to time (each a “Loan” or collectively “Loans”) plus interest thereon from the date hereof, until the indebtedness evidenced hereby is paid in full. IL. DEFINITIONS When used in this Note, the following terms shall have the meanings indicated for each of them: oe _ - _ 2.1 Business Day: A day on which commercial banks ate not authorized or required to close in New York State. 2.2 FHLB Rate: A fixed rate of interest determined by Lender to be the Regular Fixed Advance Rate offered by the Federal Home Loan Bank of New York (as reported on a weekly average basis) for instruments having a term of Ten (10) years most recently available on the day which is two (2) Business Days immediately preceding the date for such determination. 23 Guarantor: Towpath Motel, Inc., Shailesh N. Patel and Mickeyben S. Patel. 2A Interest Rate: The rate of interest set forth in Section 3 hereof. 2.5 ndebtedness: All loans, advances, debts, liabilities, indebtedness, obligations, and credit owing by Borrower to Lender of any kind or nature, present or future, whether as borrower or guarantor, however evidenced, whether arising hereunder or any other loan, note, letter of credit, guaranty, collateral or other agreement or by operation of law, and whether direct or indirect, absolute or contingent, due or to become due, now owing or existing or hereafter arising or created and however acquired, and any amendments, extensions, renewals or increases thereof, including, without limitation, all principle, interest, charges, expenses, commitment or facility fees, collateral management or other fees, treasury management obligations, obligations due pursuant to any interest rate protection agreement, reasonable attorneys’ fees and expenses related to the collection of the INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 foregoing, and any other amounts payable by Borrower whether executed in connection herewith or otherwise (collectively the “Indebtedness”). 2.6 Loan Term: Commencing on the date hereof and ending on the Maturity Date. 27 Loan Documents: Any and all documents executed and delivered by Borrower, MONROE COUNTY INDUSTRIAL DEVELOPMENT CORPORATION, (the “Agency”) and any Guarantor in connection with the Loan, including but not limited to this Note, the First Mortgage and Security Agreement from Borrower and the Agency to Lender, The General Security Agreement, the Financing Statements, the First Assignment of Leases and Rents from Borrower and the Agency to Lender, the Guaranty of Payment and Performance and the Environmental Compliance and Indemnification Agreement, (together with any and all other documents and instruments executed simultaneously herewith or previously executed and/or delivered in connection with the Loan evidenced by this Note, and all amendments and supplements thereof). 2.8 Maturity date: December 1, 2038. 2.9 Note: This Promissory Note and ali amendments, supplements, renewals, replacements or modifications thereof. The Indebtedness evidenced by this Note is secured by certain of the Loan Documents and all of the covenants, conditions and agreements contained in all of the Loan Documents are hereby made a part of and incorporated into this Note by this reference. Reference is hereby made to the Loan Documents for a description of the security and the collateral covered thereby, the rights of Lender and obligations of Borrower in respect thereto, but neither this reference _ __to.the Loan Documents nor any provisions thereof shall affect or impair the obligation of Borrower to pay the principal and interest of this Note and all other sums or charges hereunder when due and payable in accordance with the terms and conditions hereof. 2.10 Mortgage: The first lien mortgage encumbering the Property made by Borrower and Agency and given to Lender of even date herewith to secure this Note. 2.11 Property: That certain real property and the improvements thereon located at 2729 Monroe Avenue, Rochester, New York 14618. (the “Property”). If. INTEREST RATE AND ACCRUAL _ 3.1 Interest Accrual; Interest shall accrue at the applicable Interest Rate on the outstanding principal balance hereof until paid in full. Borrower shall pay interest, calculated on the basis of a 360-day year (consisting of 12 months of 30 days each) for the actual number of days of each year (365 or 366, as applicable), on the outstanding principal amount from and including the date of this Note to, but not including, the date the outstanding principal amount is paid in full. Interest will be payable monthly. 3.2 Interest Rate: From the date of the Note through and including the next Adjustment Date (as defined below), interest shall accrue on the outstanding principal balance hereunder at a 2 INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 fixed rate equal to the current FHLB Rate plus two and one half per cent (2.50%) per annum (“Period One”). The interest rate will adjust as of December 1, 2028 (each an “Adjustment Date”) to the annual interest rate equal to the then current FHLB Rate (as determined by Lender two (2) Business Days. prior to each Adjustment Date) plus two and one half per cent (2.50%) per annum (“Period Two”). Interest Rate Floor: Notwithstanding the foregoing, at no time during the Loan Term will the rate at which interest accrues be less than four and a quarter per cent (4.25 %) per annum. 3.3 Rate Not Available: If any interest rate index is not available, a similar rate based upon a comparable index selected by Lender in its sole discretion will be utilized. 34 Maximum Rate of Interest: It is intended that the rate of interest hereon shall never exceed the maximum rate, if any, which may be legally charged on the loan evidenced by this Note (“Maximum Rate”), and if the provisions for interest contained in this Note would result ina rate higher than the Maximum Rate, interest shall nevertheless be limited to the Maximum Rate and any amounts which may be paid toward intetest in excess of the Maximum Rate shall be applied to the reduction of principal, or, at the option of Lender, returned to Borrower. IV. PAYMENT TERMS 41 Payments: _ — ‘(@) ~“Onthe date hercof, Borrower shall pay! Lender interest accrued from the date hereof through and including November 30, 2018. Commencing on January 1, 2019 through and including the Maturity Date, Borrower shall make monthly payments of principal and interest to Lender in the amount necessary to repay the unpaid principal balance of the Loan and all accrued interest thereon at the then applicable interest rate and based on a twenty (20) year amortization period, with such payments to be adjusted on each Adjustment Date in an amount necessary to fully amortize the remaining principal balance of the Loan over the remainder of the original twenty (20) year amortization period at the adjusted interest rate. Payments shall be applied first to interest, then to late fees, if any, then to principal, then to tax and insurance escrow payments, if any, and then to prepayment premiums. () All outstanding principal, interest and all other amounts due hereunder and the documents securing the Loan, shall be due and payable on the Maturity Date, if not sooner paid. 42 Real Estate Tax Account: Lender will engage, at Borrower’s expense, for a lifetime monitoring service to monitor real property tax accounts affecting the Property. Borrower will pay to Lender by depositing into a non-interest bearing deposit account with Lender (‘Imposition Account”) on the first day of each month during the term hereof, a sum equal to one- twelfth (1/12) of the annual aggregate amount, as estimated from time to time by Lender, of the aggregate of all taxes, assessments, and sewer charges (collectively “Impositions”) on the Property, INDEEXNG E 2820106006 164 ~ NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 which will be held by Lender and applied by Lender to the payment of such Impositions as they become due and payable. Ifat any time such payments shall be deemed by Lender to be insufficient to pay such Impositions, Borrower will pay the amount of such deficiency, on demand, to Lender. 43 Due Date: All Indebtedness owed to Lender hereunder and not paid before the Maturity Date shall be due and payable on the Maturity Date. 44 Prepayments: This Note may be prepaid in whole or in part during the Loan Term, provided, however, that in the event a prepayment results from a refinancing by a competitor to Lender, Borrower shall also pay Lender a prepayment premium based on the following percentage of the sum prepaid. For purposes of this Section, Loan Year One shall be deemed to mean the first twelve (12) full calendar months following the date hereof. Each twelve (12) month period thereafter shall be deemed a Loan Year. Loan Term: Prepayment ium 1 Loan Year One 5% of the amount prepaid Loan Year Two 4% of the amount prepaid Loan Year Three 3% of the amount prepaid Loan Year Four 2%of the amount prepaid Loan Year Five 1% of the amount prepaid Commencing in Loan Year Six, no prepayment premium shall be due from Borrower for anyypaymm payment sof the Indebtedness made as a resultof the application of insurance proceeds or condemnation awards toward the Indebtedness. Notwithstanding the above, no prepayment premium will be assessed if the principal payments are made from excess of cash flow, or a prepayment as a result of the SBA 504 Loan (hereinafter defined). 45 Application: Business Day: All payments hereon shall be made, and all notices to Lender required or authorized hereby shall be given, at the office of Lender at the address designated in the heading of this Note, or to such other place as Lender may from time to time direct by written notice to Borrower. All payments shall be made absolutely net of, without deduction or offset and free and clear of taxes, deductions, charges or withholding of any kind. Lender shall apply all payments received on this Note to any accrued and unpaid interest then due and owing, then to late fees, if any, then to the reduction of principal of this Note, then to tax and insurance escrow payments, if any, then to prepayment premiums and then to other sums due hereunder in such order and in such amounts as Lender may determine from time to time. The sum or sums shown on Lender’s records shall be evidence of the correct unpaid balances of principal and interest on this Note, absent manifest error. If any payment comes due on a day that is not a Business Day, as defined below, Borrower may make the payment on the first Business Day following the payment date and pay the additional interest accrued to the date of payment. 46 Costs and Expenses: Borrower agrees to pay on demand all costs and expenses of INDEEXNG E 2820106006 164 ~ NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 every kind and nature, including, without limitation, attorneys’ fees and disbursements incurred by Lender in retaining counsel for advice, suit, appeal, insolvency proceedings, or any other purpose described in this Section or incurred by Lender (a) in enforcing this Note, (b) in collecting any Indebtedness evidenced hereby from Borrower or any Guarantor, (c) in realizing upon or protecting any collateral for the payment of this Note, and (d) for any other purpose relating hereto. 47 Collection Periods: Any check, draft, money order or other instrument given in payment of all or any portion hereof may be accepted by Lender and handled for collection in the customary manner, but the same shall not constitute payment hereunder or diminish any rights of Lender except to the extent that actual cash proceeds of such instrument are unconditionally received by Lender; provided, however, that this Note shall not be in default as the result of normal collection periods on such instruments. 48 Late Payment Charge: If any payment due under this Note is unpaid for ten (10) days or more, Borrower shall pay, in addition to any other sums due under this Note (and without limiting Lender’s other remedies on account thereof), a late charge of $25.00 or an amount equal to five per cent (5%) of such unpaid amount, whichever is greater. The late charge shall become immediately due to Lender, at Lendet’s sole option, as agreed compensation to Lender for the additional costs and expenses reasonably expected to, be incurred by Lender by reason of such nonpayment, such as in contacting Borrower and arranging for and processing remedial payment. Borrower acknowledges that the exact amount of such costs and expenses may be difficult, if not impossible, to determine with certainly, and further acknowledges and confesses the amount of such charge to be a consciously considered, good faith estimate of the actual damage to Lender by reason of such default. The payment of such late charge shall be secured by the Loan Documents, shall be payable on demand, but in any event not later than the due date of the next regularly scheduled monthly payment hereunder, and shall apply only to monthly installments due and payable hereunder prior to any acceleration by Lender of the Indebtedness evidenced hereby. Whether or not expressed, this election shall not impair the Lender’s further right to interest on the unpaid amount at the Default Rate (defined below) from the date such payment was due through the date of actual payment. 49 Default Interest: Borrower hereby agrees that in the event any payment due hereunder is not paid when due or the entire Indebtedness evidenced by this Note is not paid when due, then the rate of interest on this Note, at Lender’s option, without notice or demand, which is hereby expressly waived, shall be increased to be equal to the sum of three (3) percentage points plus the interest rate otherwise applicable on the Loan or the highest rate which the parties may agree under applicable law, whichever is less, and such tate shall continue to apply whether or not judgment shall be entered on this Note, until such time as Borrower’s payment default is cured. Borrower shall be obligated thereafter to pay interest on the then unpaid principal balance of this Note at the Default Rate, to be computed from the due date through and including the date of actual receipt of the overdue payment, whether a monthly payment or the entire Indebtedness. Nothing herein shall be construed as an agreement or privilege to accelerate or extend the date of the payment of any installment of, or the entire Indebtedness, nor as a waiver of any other right or remedy accruing to Lender by reason of any such default. 4.10 Sale of the Property: If Borrower elects to sell a Parcel or Parcels, the amount of INDEEXNG E 2820106006 164 ~ NYSCEF. DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 prepayment due to Lender shall be determined by Lender, in Lender’s reasonable discretion, based on the ratable value of the Parcels ascribed in appraisals to be conducted at the time of the proposed sale. V. EVENTS OF DEFAULT The happening of any of the following events or occurrence of the following conditions, shall be events of default hereunder (individually, an “Event of Default” and collectively “Eventsof efault”): @) Nonpayment: Nonpayment of principal of, interest on, or any fee or premium provided for under this Note within ten (10) days after such amount is due, whether by acceleration of otherwise. (b) Failure to Perform Other Covenants: If Borrower shall continue to fail to perform or be in default under any of the other terms, covenants or conditions of this Note for ten (10) days after notice from Lender in the case of any default which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other default, provided that if such default is susceptible to cure and cannot reasonably be cured within such thirty (30) day period and Borrower shall have commenced to cure such default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for so long as it shall require Borrower in the exercise of due diligence to cure such default, but in any event not more than sixty (60) days. a (©) Default under Related Documents: An Event of Default, uncured at the end of any applicable notice and cure period, under any Loan Document, loan agreement, security agreement or other document evidencing or securing this Note. A default under this Note shall, at the option of Lender, also constitute a default under any or all of the other Loan Documents. In additional to, and not in limitation of, the foregoing, a default under any or all of the Loan Documents shall, at the option of Lender, constitute a default under this Note. @) Termination; Death: Incompetency: If Borrower or any entity Guarantor is dissolved, terminates its operations or for any reason ceases to exist, or the death or judicial declaration of incompetency of any Guarantor of this Note, if an individual. ©) Bankruptcy Proceedings: (i) If Borrower, any Guarantor hereof, or any general partner of Borrower or such Guarantor (each a “Loan Party”) shall (A) file a petition or request for liquidation, reorganization, adjustment of debts, arrangement, adjudication as a bankrupt or similar relief under the bankruptcy, insolvency or similar laws of the United States of America or any state or territory thereof or any foreign jurisdiction now or hereafter in effect, (B) consent to the filing of a petition in any bankruptcy, liquidation, reorganization or insolvency proceedings, (C) consent to the appointment of a receiver, trustee, agent or officer performing similar functions with respect to any substantial part of its assets, (D) make a general assignment for the benefit of its creditors, or (E) institute or execute a consent to any other type of insolvency proceedings (under the federal Bankruptcy Code or otherwise) or any formal or informal proceeding for the dissolution or 6 INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 liquidation of, or settlement of claims against or winding up of affairs of, Borrower; or (ii) the appointment of a receiver, custodian, trustee or officer performing similar functions for Borrower or any other Loan Party or for any of their respective assets; or the filing against Borrower or any Guarantor hereof, or any general partner of Borrower or such Guarantor of a request or petition for liquidation, reorganization, arrangement or adjudication as a bankrupt or other relief under the bankruptcy, insolvency or similar laws of the United States of America, or any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect or the institution against Borrower or any other Loan Party of any other type of insolvency proceeding (under the Bankruptcy Code or otherwise) or any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up the affairs of Borrower or any other Loan Party, and the failure to have such appointment vacated or such petition or proceeding dismissed within sixty (60) days after such appointment, filing or institution. Insolvency: If Borrower, any Guarantor hereof, or any general partner of Borrower or such Guarantor shall (i) become “insolvent” as defined in any applicable state or federal statute; (ii) engage in any business or transaction for which the assets retained by it shall constitute an unreasonably small capital, taking into consideration the obligations to Lender under this Note and any other document evidencing indebtedness of such person; (iii) incur debts beyond its ability to pay them as they mature; or (iv) fail to own property having a value at both fair valuation and at fair salable value in the ordinary course of its business greater than the amount required to pay its debts as they become due. ions: If any certificate, statement, representation, warranty or financial statement furnished by or on behalf of Borrower pursuant to or in connection with this Note —_ ____(including, neludin without limitation, representations and warranties contained herein) or as a inducement to Lender or any affiliate of lender (“Lender Affiliate”) to enter into any lending agreement with Borrower shall prove to have been false in any material respect at the time as of which the facts therein set forth were certified, or to have omitted any material contingent or unliquidated liability or claim against Borrower, or if on the date of the execution of this Note there shall have been any materially adverse change in any of the facts disclosed by any such statement or certificate, which change shall not have been disclosed by Borrower to Lender at or prior to the time of such executing. @) Intentionally Omitted. (i) Judgments: If any judgment or judgments (other than any judgment for which it is fully insured) against Borrower remains unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period of thirty (30) days. Guarantor Default: Any guaranty of this Note shall cease, for any reason, to be in effect without the prior consent of Lender, or any Guarantor or Borrower shall so assert in writing; or any Guarantor shall die or become incapacitated, incarcerated and Lender and Borrower, and, if necessary, an authorized representative of the Guarantor or the Guarantor’s estate, shall have failed to agree to a replacement guaranty, cash collateral or other arrangement satisfactory to Lender as an adequate substitution for the guaranty of such Guarantor; or any Guarantor shall fail (prior to the expiration of any applicable cure period) to perform or observe any covenant contained in the guaranty to which such Guarantor is a party; or any representation, warranty or financial statement made or furnished by a Guarantor in connection with this Note or the applicable guaranty shall prove 7 INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 to have been false in any material respect, or to have omitted any material contingent or unliquidated liability. &) Challenge to Collateral Documents: If Borrower, or any Guarantor, or any other person providing collateral support for Borrower’s obligations hereunder (the “Obligor”) directly or indirectly, shall challenge, or indicate their intention to challenge, the validity and binding effect of any provision of this Note or any document evidencing or securing Borrower’s indebtedness under this Note (each a “Collateral Document” and collectively, the “Collateral Documents”) or this Note or the Collateral Documents shall for any reason (except to the extent permitted by their express terms) cease to be effective or cease to have the priority lien position required by the terms thereof. Q Change of Ownership: If there is a change in the ownership of Borrower or any Guarantor, other than as expressly permitted under the Loan Documents. (m) Termination of Business: If Borrower or any Obligor terminates its business or ceases to operate as a going concern. @) Non- with C If Borrower or any Guarantor fails to comply with any of the provisions set forth in the commitment letter from Lender dated May 1, 2018, and as the same may be amended from time to time, it being understood that the terms of said commitment letter are hereby incorporated in this Note and, to the extent that any of the terms of the commitment letter are in conflict with the terms of this Note, the terms of this Note shall prevail. (0) Failure to Repay Interim Loan. If Borrower fails to repay the earlier of, an interim Joan with Lender ne in the amount of One Million Fifty Thousand and NO0/100 Dollars U.S, ~ ($1,050,000.00) (“Interim Loan”), either (i) pursuant to an SBA 504 Loan (# 28042370-09) (“SBA Loan), or (ii) within six (6) months of even date herewith, (unless extended, in writing by Lender, in Lendez’s sole discretion). Upon the occurrence of any Event of Default (other than an Event of Default under paragraphs (d) or (e) above), Lender shall have the absolute right, at its option and in its sole discretion, to declare immediately due and payable all unpaid amounts of principal and interest on this Note, and all other sums payable at the time of, or as the result of, such declaration under this Note or any other document securing the Note and, if applicable, Borrower shall no longer be permitted to obtain Loans hereunder. Upon the happening of one or more Events of Default under paragraph (d) or (e) hereof, Lender’s obligations hereunder shall be cancelled immediately, automatically and without notice, and all amounts outstanding under this Note, and all other sums payable at the time of, or as the result of, such declaration under this Note or any other document securing the Note, shall become immediately due and payable without presentation, demand or notice of any kind to Borrower. Lender may, in its sole discretion, exercise alternately or cumulatively any of the remedies available under this Note or any other document sectiring the Note, or at law or equity. The failure to exercise one or more of such remedies upon the happening of an Event of Default shall not constitute a waiver of the right to exercise the same at any subsequent time in respect of the same Event of Default or any other Event of Default. Neither the acceptance by Lender of any payment hereunder which is less than payment in full of all amounts due and payable at the time of such payment, or any negotiation or discussion with Borrower, shall constitute a waiver of the right to exercise one or more of such remedies at that time or at any subsequent time 8 INDEEXNG E 2820106006 164 NYS CEF BOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 or nullify any prior exercise of any remedy, except as and to the extent otherwise provided by law. VI. LOAN COVENANTS 6.1 Financial Statements: Borrower and Guarantor will furnish to Lender Financial Statements as follows: (a) BORROWER: Borrower will also furnish to Lender annually, within ninety (90) days of Fiscal Year End: Annual Financial Statements, which should be at least compilation quality, and Annual State and Federal Tax Returns, inclusive of all sched jules, all shall be ina form and substance satisfactory to Lender. (b) GUARANTOR: Each entity Guarantor will also furnish to Lender annually, within ninety (90) days of Fiscal Year End: Annual Financial Statements, which should be at Icast compilation quality and Annual Federal Tax Return, inclusive of all schedules; and each individual Guarantor will also furnish to Lender annually, within ninety (90) days of Calendar Year End: Personal Financial Statements, and Federal Tax Returns, inclusive of all schedules, all shall be in a form and substance satisfactory to Lender. Borrower and each Guarantor shall provide, to Lender, full disclosure of financial information as reasonably requested. “Financial Statements” shall consist of: (i) balance sheets; (ii) income statements; (iii) current rent rolls; (iv) cash flow statements; (v) statements of contingent liabilities; (vi) federal tax _ _tetur with all schedules ns for Borrower and each Guarantor;-(vii) such other financial information as Lender may deem reasonably necessary. Signed Federal Income tax returns with all schedules of the Borrower and each Guarantor are to be submitted annually by April 1". All financial statements furnished to Lender will be prepared in accordance with GAAP, consistently applied, be in form and content satisfactory to Lender, certified to be correct by the party offering such statement, and include a representation that Lender may rely on such statements. 6.2 Debt Service Coverage Ratio: Borrower shall maintain a Debt Service Coverage Ratio (the “DSCR”) of 1.30x. The DSRC shall be measured annually based on year end results for actual net operating income and actual debt service for the Property, beginning with 12/31/18. DSCR shall be defined as net income plus non-cash charges including depreciation and amottization, and interest expense divided by interest expense and required principal payments due for the period being measured. The loan covenant shall be tested upon receipt and review of financial statements required under this Article VI. Failure to meet this covenant will result in a twenty-five (25) basis point increase in the Interest Rate until the date of the next annual measurement. 6.3 Operating Account: Borrower will establish prior to closing the Loan and will maintain throughout the Loan Term an exclusive operating account for the Property with Lender. INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 VII. MISCELLANEOUS PROVISIONS 71 Notice: Except for any notice required under applicable law to be given in another manner, the giving and effectiveness of any notice, elections or demands, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered or if sent by telecopy, effective upon receipt, or (b) if delivered by overnight courier service, effective on the day following delivery to such courier service, or (c) if mailed by United States registered or certified mail, postage prepaid, return receipt requested, effective two (2) days after deposit in the United States mails; and properly addressed in each case as follows: If. to Borrower: S & A Hospitality Inc. 10 Falconbridge Drive Pittsford, New York 14534 Ifto Lender: The Bank of Castile 133 North Center Street Perry, New York 14530 or at such other address or to such other addressee as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. “7.2 Joint and Several : Ifthere is more than one Borrower, each of them shall be jointly and severally liable for all amounts and obligations which become due under this Note and the term “Borrower” shall include each as well as all of them. 7.3 Entire Agreement; Binding Effect; Severability: This Note, together with any related loan and security agreements, guaranties, and documents ancillary thereto contains the entire agreement between Lender and Borrower with respect to the Note, and supersedes every course of dealing, other conduct, oral agreement and representation previously made by Lender. Borrower agrees that in any legal proceeding, a copy of this Note kept in Lender’s course of business may be admitted into evidence as an original. This Note is a binding obligation enforceable against Borrower and its heirs, executors, administrators and permitted successors and assigns and shall insure to the benefit of Lender and its successors and assigns. Ifa court deems any provision of this Note invalid, the remainder of the Note shall remain in effect. 74 Waiver of Marshal ling of Assets: Borrower hereby waives for itself and, to the fullest extent not prohibited by applicable law, for any subsequent lienor, any right Borrower may now or hereafter have under the doctrine of marshalling of assets or otherwise which would require Lender to proceed against certain property covered by any of the Loan Documents before proceeding against any other property covered by any of the Loan Documents. Lender shall have the right to proceed, in its sole discretion, against the property secured by any of the Loan Documents in such order and 10 INDEEXNG E 2820106006 164 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 04/11/2024 in such portions as Lender may determine, without regard to the adequacy of value or other liens on any such property, and any such action shall not in any way be considered as a waiver of any of the rights, benefits, liens or security interests created by any of the Loan Documents. 7.5 Setoff: Without limiting its rights of setoff under New York law generally, upon and at any time and from time to time after the occurrence and during the continuance of an Event of Default, Lender shall have the right to place an administrative hold on, and setoff against each obligation of Borrower hereunder and each obligation of Lender in any capacity to Borrower, whether now existing or hereafter arising or accruing, whether or not then due and whether pursuant to any deposit account or certificate of deposit or otherwise. Such setoff shall become effective at the time Lender determines even though evidence thereof is not entered in the records of Lender until later. 7.6 Waiver: Borrower hereby waives demand, presentment for payment, protest, notice of protest, notice of nonpayment and any and all lack of diligence or delays in collection or enforcement of this Note or the other Loan Documents, and expressly consents to any extension of time of payment