published available ADDRESS Dear Mr. XY:
Index figure October 23, 20__ no later than each
THE BANK, a national banking association (hereinafter called "Bank"), hereby offers, subject to the hereinafter described conditions (the "Commitment"), to make the following-described mortgage loan (the "Loan"): Borrower: Co-Makers: Mr. XY. Mr. XY, individually, shall execute the Promissory Note and all other applicable Loan Documents (hereinafter defined) as Co-Makers. The principal amount of the Loan shall be the lesser of (i) One Million Two Hundred Thousand and 00/100 Dollars U.S. ($1,200,000.00) or (ii) seventy-nine and ninety one-hundredths percent (79.90%) of the appraised value of the Property (hereinafter defined), as determined by Bank in its sole discretion ("Loan Amount"). On the Closing Date (hereinafter defined) and until the first day of the first (1St) calendar month after the Closing Date, the rate of interest shall be equal to two percent (2.00%), plus the Index (hereinafter defined) figure available no later than the Closing Date, per annum. The "Index" is the thirty (30) day London Interbank Offered Rate ("LIBOR") as published in the Money Rates section of The Wall St reet Journal . On the first day of the first (1 St) calendar month after the Closing Date and on the first day of every calendar month thereafter, up to and including the twelfth (12th) calendar month after the Closing Date ( each a “change Date”) , the rate of interest shall be adjusted
Loan:
Initial Interest Rate:
Change Date is called the "Current Index". Interest shall be computed on the aggregate
principal balance outstanding from time to time, on the basis of a three hundred sixty (360) day year, but shall be charged for the actual number of days within the period for which interest is being charged. In the event the Index is discontinued and a substitute or substitutes is provided therefor, then such substitute which in the judgment of Bank most nearly provides the measurement now being provided by the Index shall be used in lieu of the Index. In the event the Index is discontinued and no substitute is provided therefor, any index, service or publication which in the judgment of Bank most nearly provides the measurement now being provided by the Index shall be used in place of the Index. Disbursement of Loan Proceeds: Notwithstanding anything contained herein to the contrary, Bank shall disburse the lesser of Nine Hundred Thousand and 00/100 Dollars U.S. ($900,000.00) or seventy-five percent (75%) of the Loan Amount on the Closing Date. The balance of the Loan Amount shall be disbursed in a single disbursement within five (5) business days of Bank's receipt of Borrower's written request therefor, provided that at such time (i) the improvements to be located on the Property are fully constructed, (ii) at least ninety percent (90%) of the gross leaseable area of the Property is occupied by tenants, approved by Bank, that are paying rent in
accordance with their respective leases, (iii) each tenant lease is for a term of at least three (3) years, (iv) Borrower has delivered to Bank a date down endorsement to Bank's ALTA Policy (hereinafter defined) in form and substance satisfactory to Lender, the cost of which shall be paid for by Borrower, and (v) Borrower and Co-Makers are not in default under any of the Loan Documents (collectively, "Second Disbursement Requirements"). Notwithstanding anything contained herein to the contrary, in the event Borrower fails to satisfy the Second Disbursement Requirements prior to the Initial Conversion Change Date (hereinafter defined), the Loan shall mature and the Loan Amount and all accrued interest and any other charges under the Loan Documents shall be due and payable in full on the first (1 st) day of the thirteenth (13th) calendar month after the Closing Date.
Initial Repayment Requirements: Interest only shall be payable monthly on the first day of each calendar month on the amount of principal balance outstanding from time to time beginning on the first day of the first calendar month following the Closing Date and continuing on the first day of each and every calendar month thereafter, up to an i nc lu di ng t h e t h ir te en th ( 13 th) calendar month after the Closing Date. Conversion: The Loan shall automatically convert to the interest rate and repayment schedule as hereinafter set forth, provided that prior to the first day of the thirteenth (13 th) calendar month after the Closing Date ("Initial Conversion Change Date") the Second Disbursement Requirements have been satisfied. On the Initial Conversion Change Date and on the first day of the month sixty (60)
calendar months thereafter (the "Subsequent Conversion Change Date"), the rate of interest shall change to be equal to the Current Conversion Index (hereinafter defined) plus one and seventy-five onehundredths percent (1.75%) per annum. The "Current Conversion Index" is the most recent Conversion Index (hereinafter defined) figure available prior to the Initial Conversion Change Date and the Subsequent Conversion Change Date. The "Conversion Index" shall be the interest rate for Fixed Rate Advances with a term of five (5) years, as published by the Federal Home Loan Bank of Cincinnati. Notwithstanding anything contained herein to the contrary, in no event shall the Current Conversion Index be less than the Conversion Index existing on the Initial Conversation Change Date minus twenty-five one-hundredths percent (0.25%). Interest shall be computed on the aggregate principal balance outstanding from time to time, on a basis of a three hundred sixty (360) day year, but shall be charged for the actual number of days within the period for which interest is being charged. On the Initial Conversion Change Date Borrower shall pay all previously unpaid interest. Thereafter, on the first (1St) day of the first (1St) calendar month following the Initial Conversion Change Date and continuing on the first (1St) day of each and every calendar month thereafter, installments of principal and interest shall be paid in an amount satisfactory to repay the Loan over a twenty-five (25) year amortization period ("Amortization Period") beginning with the Initial Conversation Change Date. On the Subsequent Conversion Change Date monthly payments of principal and interest shall be adjusted by Bank so as to provide for repayment in full of the unpaid principal balance of the Loan over the then remaining portion of the Amortization Period.
Loan Term: If not sooner paid, all principal then outstanding together with interest due thereon shall be due and payable on the first day of the one hundred thirty-third (133rd) calendar month after the Closing Date ("Maturity Date"). Loan Fee: Borrower shall pay a Loan Commitment Fee of Six Thousand and 00/100 Dollars U.S. ($6,000.00) simultaneously with the execution of this Commitment. Borrower hereby acknowledges that the Loan Commitment Fee shall be for the applicable services rendered, supported by good, valuable and adequate consideration, and is not refundable for any reason. Prepayment: Borrower may prepay the Loan in whole or in part prior to the Initial Conversion Change Date without penalty. The payment of any partial prepayment shall not relieve Borrower from the obligation to make subsequent scheduled monthly interest payments. After the Initial Conversion Change Date, Borrower may prepay the Loan in whole or in part, provided Borrower pays Bank a prepayment premium in addition to the amount of principal so prepaid, determined as follows:
2 1 3 4 5 Loan Year 6 7 Thereafter
4.00% 3.00% 2.00% 1.00% Prepayment Percentage 1.00% 0.00% 5.00%
The prepayment premium shall be the product of (a) the prepaid principal amount and (b) the Prepayment Percentage set forth above
for the Loan Year in which such prepayment is made. The payment of any partial prepayment shall not relieve Borrower from the obligation to make subsequent scheduled monthly installment payments. As used herein, the term "Loan Year" shall mean each period of twelve (12) consecutive calendar months following the Initial Conversion Change Date.
The following shall not be deemed a voluntary prepayment and there shall be no prepayment premium due and payable as a result thereof: (a) the application of insurance proceeds which become available, or any damages recovered in connection with any eminent domain proceeding, by Bank in reduction of the indebtedness of the Loan; and (b) acceleration of the indebtedness as a result of imposition of a mortgage tax or other tax or action adversely affecting the value of the Mortgage (hereinafter defined).
Loan Documents and Security for the Loan: The Loan shall be evidenced by a Promissory Note (the "Note") in the amount of the Loan, and shall be secured by: (a) An Open-End Mortgage Deed, Security Agreement and Fixture Filing (the "Mortgage") which Mortgage shall be (1) a first lien upon the unencumbered fee simple title to that certain real property located at________together with all easements and rights of way appurtenant thereto (collectively, "Property"), which Property shall be more fully described in a legal description to be provided by Borrower to the satisfaction of Bank, and (2) a first lien and security interest in all personal property owned by Borrower and relating to or located on the Property ("Collateral");
(b) An Assignment of Leases and Rents ("Assignment") assigning to Bank all of Borrower's right, title and interest in and to all present and future leases and guarantees thereof, of all or any portion of the Property, and all rents, security deposits, issues and profits therefrom; (c) Uniform Commercial Code Financing Statement creating in favor of Bank a first perfected lien in and to all personal property now or hereafter located on the Property and owned by Borrower and the proceeds thereof; and (d) Such other documents, including, without limitation, an Environmental Indemnity Agreement, as may be requested by Bank at or prior to the Closing Date. All of the foregoing documents together with this Commitment, which shall survive the execution and delivery of the other Loan Documents and remain effective so long as any part of the Loan is unpaid, and the Note shall be known herein as the "Loan Documents", which Loan Documents shall be in form, substance and execution acceptable to Bank. Commitment Expiration: This Commitment is open for acceptance by Borrower and Co-Makers until 5:00 P.M. Eastern Time ("E.T.") on DATE. If it is not accepted and returned to Bank by said date, the Commitment shall immediately become null and void without further notice. Loan Closing Date: The Loan shall be closed by DATE, or this Commitment shall immediately become null and void without further notice. As used herein, "Closing Date" shall mean that day on which the Mortgage is filed for record with the Summit County, Ohio Recorder. Late Charge:
Five cents ($.05) on each dollar of any delinquent payment not paid within fourteen (14) days after its due date. Default Rate: In the event of any default, at the option of Bank, the rate of interest shall be adjusted to the default rate of interest which shall be equal to four (4) percentage points plus the rate of interest otherwise applicable on the Loan. Expenses: Borrower and/or Co-Makers shall pay all costs and expenses in connection with this Commitment and the Loan including (by way of illustration and not limitation): Mortgage recording fees, Bank's credit investigation fees, appraisal and appraisal review fees, title insurance costs, escrow fees, survey fees, Bank's outside and in-house attorneys' costs and fees, Bank's document preparation and review fees, environmental audit and site inspection fees, and any and all other costs of Bank in connection with this Commitment and the Loan. Title Insurance Policy: Bank shall be furnished an ALTA Loan Policy of Title Insurance, Form B, amended 10-17-70 or 6-18-87 (Additional Coverage Form) issued by a title company satisfactory to Bank in the amount of the Loan, insuring Bank that it has a first lien upon the Property, including insurance against mechanic's and materialmen's liens and encroachments by or upon the Property and with variable rate, comprehensive, and such other endorsements as may be required by Bank, with all socalled "Standard" exceptions deleted and containing no exceptions other than those specifically approved by Bank (the foregoing hereinafter referred to as the "ALTA Policy"). Non-Assignability of Commitment: This Commitment is made exclusively to
Borrower and Co-Makers and is not assignable nor transferable voluntarily or involuntarily by Borrower or any Co-Maker and any such assignment or transfer or attempted assignment or transfer shall be null and void and shall result in this Commitment being automatically and simultaneously terminated. Indemnification: Borrower and Co-Makers agree to indemnify and to defend and hold Bank harmless against any brokerage commissions or finder's fees claimed by any broker or other party in connection with the transactions contemplated hereby. Borrower and/or Co-Makers shall furnish the following documentation to Bank at least five (5) business days prior to the Closing Date, all in form, substance and execution all satisfactory to Bank and subject to review, verification, and acceptance by Bank: 1.An ALTA Survey of the Property setting forth all existing improvements, easements, rights of way, matters to be shown in schedule B of the ALTA Policy, and such other matters as Bank may request, showing no current or proposed encroachments and certified by a registered engineer or surveyor. 2. Evidence of the Property's compliance with all applicable laws (including zoning) and private covenants and restrictions. 3. Execution and delivery of the Note, Mortgage, Assignment, Environmental Indemnity Agreement, and other Loan Documents to Bank, at Closing. 4. Commitment for the issuance of the ALTA Policy and copies of all items listed in Schedule B thereof. 5. Evidence (including a Phase I environmental assessment) indicating that the Property is free from risk, in Bank's sole judgment, from all hazardous substances, toxic substances or
hazardous wastes as defined by any federal, state, or local law, statute, ordinance or regulation and is free of all other contamination which, even if not so regulated, is known to pose a hazard to the health of any person on or about the Property and that the Property is not in a "Wetlands" or "Flood Plan" area, and contains no underground storage tanks. Bank reserves the right, at Borrower's expense, to retain an independent consultant to review any such evidence submitted by Borrower or to conduct its own investigation of the Property. 6. Evidence of suitable policies of: (A) general liability insurance, and (B) other appropriate insurance relating to the Property or the operation thereof as Bank may reasonably require from time to time, with Bank named as first mortgagee on the policies. The policies shall at all times be in form, substance and sufficiency of amount and type of coverage and be issued by insurance carriers acceptable to Bank. 7. Flood insurance in an amount as Bank may reasonably require if the Property is located in a Flood Hazard Area. 8. The opinion of Borrower's and CoMakers'legal counsel that with respect to Borrower, Co-Makers, the Property, and the Collateral: (a) there is no threatened or pending litigation that might affect the Loan, Borrower, Co-Makers, the Property or the Collateral; (b) the transactions contemplated by this Commitment do not violate any provision of any law, restriction or other document affecting Borrower, Co-Makers, the Property or the Collateral; (c) the Loan Documents have been duly executed and delivered and constitute legal, valid and binding obligations of Borrower and are enforceable in accordance with their terms; (d) Borrower is a validly organized and existing limited liability company under the laws of the State of Ohio and qualified to do business in
the State of Ohio; that Borrower has the legal capacity to own, develop and operate the Property and the Collateral and to perform its obligations under the Loan Documents; and, that the Loan has been duly authorized by Borrower, and (e) such other matters concerning the Loan, the Loan Documents, the Property, the Collateral, Borrower or CoMakers as Bank or its counsel may require.
9. Certified copies of Borrower's Articles of Organization, Operating Agreement, Certificate of Full Force and Effect from the Secretary of State of Ohio, and Resolutions of Borrower authorizing the Loan. 10.Executed copy of all leases. 11. Subordination, Non-Disturbance and Attornment Agreement and Estoppel Certificate from each tenant of the Property. 12. A current rent roll for the Property certified by Borrower. 13. An appraisal of the Property. 14. Completed, signed and dated personal financial statement for each Co-Maker. 15. Verification of liquidity. Additional Loan Conditions: 1. Upon the request of Bank, Borrower and each Co-Maker shall provide annual Federal Income Tax Returns, financial statements and annual certified rent roll and annual operating statements for the Property to Bank. 2. Upon the request of Bank, as soon as available, and in any event within thirty (30) days of Borrower’s and each Co-Maker’s fiscal quarter end, Borrower and such Co-Maker shall deliver to Bank their internally prepared financial statements for such fiscal quarter
along with an operating statement for the Property, if any. 3. Provide no default exits in the covenants, terms and conditions of any Loan Documents, Bank will permit Borrower to pay the Property’s insurance premiums and real estate taxes outside of escrow during the term of the Loan. Borrower shall furnish to Bank evidence that the insurance premiums and real estate taxes are paid on the date such amount become delinquent. 4. The Loan Commitment Fee shall be deemed fully earned by Bank upon the date of acceptance of this Commitment, and in no event shall said unpaid Loan costs and expenses shall be paid by Borrower or Co-Makers immediately upon the expiration or termination of this Commitment for any reason.
5. Until the Loan is paid in full, Borrower or Co-Makers shall not, without the prior written consent of Bank, create, effect, consent to, attempt, contract for, agree to make, suffer or permit any conveyance, sale, assignment, transfer, lien, pledge, mortgage, security interest, encumbrance or alienation of the Property or any interest in or portion of the Property, which is effected directly, indirectly, voluntarily, involuntarily, or by operation of law or otherwise.
Bank's obligation under this Commitment shall be subject to the satisfactory compliance by Borrower and Co-Makers with all of the conditions contained herein. The issuance of this Commitment shall not prejudice Bank's rights of review and approval, including without limitation, with respect to leases, documents and materials heretofore delivered to Bank by or on behalf of Borrower or Co-Makers unless it is accepted in writing as provided herein, and delivered, along with the Loan Commitment Fee, to THE BANK, before 5:00 P.M. E.T., DATE. TIME IS OF THE ESSENCE IN THIS COMMITMENT. Very truly yours,
The Bank Loan Officer
ACCEPTANCE OF COMMITMENT The undersigned hereby acknowledge receipt of the foregoing Commitment this________ day of _____________ 20__, and hereby accept all of the terms, conditions and time limitations set forth in the Commitment by the execution of same. BORROWER: By:______________________ Print Name:______________ Title:___________________ CO-MAKERS: _________________________ Mr. Jones, individually