Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 3 contracts
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Gladstone Commercial Corp), Open End Mortgage, Assignment of Leases and Rents and Security Agreement (Gladstone Commercial Corp), Security Agreement (Gladstone Commercial Corp)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) In the event of any condemnation or casualty of any Property in part or in the entirety, the proceeds of such condemnation or casualty, to the extent not retained or otherwise applied by the holder of any mortgage securing Senior Debt on such Property, or by the holder of the occurrence of Construction Loan, applied as required pursuant to any casualty (other than a de minimus casualty) affecting, or Major Lease approved by the institution of any proceedings for eminent domain or for the condemnation of, Lender at the Property or any portion thereof. All insurance proceeds applied by such mortgagee or in accordance with such Major Lease either to restore the improvements on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the such Property or for to reduce such Senior Debt or the Construction Loan, as applicable, applied as required pursuant to any damage condominium declaration and/or related by-laws affecting any Property that has previously been approved by Lender to restore the improvements on such Property or injury applied in accordance with the Loan Documents, shall be immediately deposited by Borrower in a cash collateral account to it for any loss or diminution in value be maintained by Borrower at a depository designated by Lender and under the sole dominion and control of Lender (the Property"Cash Collateral Account") pursuant to a cash collateral agreement to be entered into between Borrower, are hereby assigned to Lender and such Depository (the "Cash Collateral Agreement"); (such proceeds of condemnation so deposited being herein called "Condemnation Proceeds"; such proceeds of casualty so deposited being herein called "Casualty Proceeds"; and Condemnation Proceeds and/or Casualty Proceeds being herein called "Proceeds") and shall be paid to Lender. Lender may participate in any suits constitute additional collateral for the Loan Obligations.
(b) Provided that no Default or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is shall have occurred and be continuing, the Borrower shall be entitled to withdraw any Condemnation Proceeds from the Cash Collateral Account for the purpose of acquiring additional real estate assets with the consent of the Lender, which consent shall not be unreasonably withheld, provided that, subject to the Loan Documents, the Loan Agreements and the Other Vornado Loans (i) Borrower shall have delivered to Lender an appraisal for such real estate (x) for an amount at least equal to the amount of the Condemnation Proceeds sought to be withdrawn by the Borrower to purchase such real estate and (y) issued by an appraisal company and in form and substance reasonably satisfactory to the Lender; (ii) the Borrower shall have delivered to Lender environmental, engineering and such other studies, reports, documents, title reports, violation searches and other information relating to such real estate as would be generally required by the Lender in accordance with good institutional lending practices, all of which studies, reports, documents and other information shall be in form and substance reasonably satisfactory to the Lender; (iii) the Lender shall not participate be granted a priority lien mortgage on said real estate to further secure the Guaranty (the "Additional Mortgage"); (iv) the Borrower shall have delivered to Lender a paid-up mortgage title insurance policy in favor of Lender, insuring the Additional Mortgage as a second priority mortgage on such real estate, subject to no encumbrances or other title exceptions except those title exceptions which Lender reasonably determines are acceptable based on good institutional lending practices; and (v) the Borrower shall have paid all reasonable costs and expenses of the Lender (including reasonable attorneys' fees and expenses) incurred by the Lender in connection with the review of any of the foregoing conditions.
(c) The Borrower shall also have the right to withdraw the Condemnation Proceeds remaining in the adjustment ofCash Collateral Account to pay for the cost of constructing improvements on any Property covered by any Mortgage, and the Borrower shall have the right to directly receive proceeds with respect to, withdraw any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided Casualty Proceeds in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds Cash Collateral Account to be used to reimburse Borrower pay for the cost repair and restoration of restoring and repairing the Property improvements whose damage or destruction generated such Casualty Proceeds, provided that, in all cases, subject to the equivalent of its condition immediately prior to Loan Documents, the casualty or, in the case of condemnation, to a condition Loan Agreements and any condominium declaration and/or related by-laws affecting such Property that has previously been approved by Lender (and the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are metOther Vornado Loans: (1i) no Default or Event of Default has occurred and is shall be continuing; (2ii) the Lender shall have approved the plans and specifications for the construction of such improvements as well as the general contract and other major contracts to be entered into by the Borrower in connection with such construction, which approval will not unreasonably be withheld; (iii) the case Lender shall have received such certification and assurances as Lender shall reasonably request to assure it that the cost of casualty, less than forty percent (40%) constructing the improvements as shown on the plans approved by Lender does not exceed the amount of the Improvements have been damaged, or in Proceeds sought to be withdrawn by the case of a taking, less than twenty-five percent Borrower to pay for such improvements; and (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (Aiv) the Restoration will be completed before Lender may impose such further conditions and restrictions upon the earlier disbursement of (i) one year before such Proceeds as the Maturity Date of the Note Lender deems necessary or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during desirable, consistent with prudent institutional construction lending practices, to assure the completion of the Restoration; proposed improvements subject to no liens or encumbrances (6except Permitted Liens) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions aforesaid approved plans and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforapplicable laws.
Appears in 3 contracts
Samples: Credit Agreement (Alexanders Inc), Credit Agreement (Alexanders Inc), Credit Line Agreement (Alexanders Inc)
Condemnation and Casualty. Borrower shall A. Franchisee shall, at the earliest possible time, give Lender prompt written Franchisor notice of any proposed taking by eminent domain. If the occurrence of any casualty (other than a de minimus casualty) affectingHotel is condemned, or such a substantial portion of the institution Hotel is condemned to render impractical the continued operation of any proceedings for eminent domain the Hotel in accordance with the System, this Agreement shall terminate upon notice by Franchisor or for Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationaward; provided, however, that so long as no Event of Default is continuingFranchisor’s portion shall be limited to compensating Franchisor for Franchisor’s lost royalty income, Lender which amount shall not participate exceed the amount of the applicable liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee shall promptly make whatever repairs and restoration may be necessary to make the adjustment ofHotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and Borrower the resumption of normal operation of the Hotel shall not be unreasonably delayed.
B. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to directly receive proceeds with respect toterminate this Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any loss of its members if it is a limited liability company or any of its affiliated companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”), has a greater than fifteen percent interest in or operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in excess such event, Franchisee shall be obligated to promptly pay to Franchisor an amount equal to the applicable liquidated damages set forth at Paragraph XVIII.E., and the time element for calculating the amount of applicable liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half (1/2) the number of months then remaining between (i) ten percent (10%) of the then outstanding principal balance of date upon which the Note Other Lodging Product is first operated by or for the Franchisee Entity and (ii) $500,000.00the Term Expiration Date. Except as provided in Franchisee’s obligation set forth herein shall survive termination of this Agreement pursuant to this Paragraph XIX.B. In the foregoing sentence, Lender may, at Lender’s option, event the Hotel does not close for more than ninety (y90) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, days due to a condition approved by Lender (the “Restoration”), and require Borrower casualty or Franchisee does not elect to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, terminate this Agreement in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration provisions of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effectthis Paragraph XIX.B., the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Hotel shall be applied first to the final payment due under the Note promptly renovated and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect reopened within a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking reasonable time in accordance with the foregoing provisions System and Borrower shall pay pursuant to Lender all costs plans and expenses of Lender incurred specifications approved by Franchisor in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this accordance with Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforVII.
Appears in 2 contracts
Samples: Franchise Agreement (Apple REIT Eight, Inc.), Franchise Agreement (Apple REIT Eight, Inc.)
Condemnation and Casualty. Borrower shall A. Franchisee shall, at the earliest possible time, give Lender prompt written Franchisor notice of any proposed taking by eminent domain. If the occurrence of any casualty (other than a de minimus casualty) affectingHotel is condemned, or such a substantial portion of the institution Hotel is condemned to render impractical the continued operation of any proceedings for eminent domain the Hotel in accordance with the System, this Agreement shall terminate upon notice by Franchisor or for Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationaward; provided, however, that so long as no Event of Default is continuingFranchisor’s portion shall be limited to compensating Franchisor for Franchisor’s lost royalty income, Lender which amount shall not participate exceed the amount of liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee shall promptly make whatever repairs and restoration may be necessary to make the adjustment ofHotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and Borrower the resumption of normal operation of the Hotel shall not be unreasonably delayed.
B. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to directly receive proceeds with respect toterminate this Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any loss of its members if it is a limited liability company or any of its affiliated companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”), has a greater than fifteen percent interest in or operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in excess such event, Franchisee shall be obligated to promptly pay to Franchisor an amount equal to the liquidated damages set forth at Paragraph XVIII.E., and the time element for calculating the amount of liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half (1/2) the number of months then remaining between (i) ten percent (10%) of the then outstanding principal balance of date upon which the Note Other Hotel is first operated by or for the Franchise Entity and (ii) $500,000.00the Term Expiration Date. Except as provided in Franchisee’s obligation set forth herein shall survive termination of this Agreement pursuant to this Paragraph XIX.B. In the foregoing sentence, Lender may, at Lender’s option, event the Hotel does not close for more than ninety (y90) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, days due to a condition approved by Lender (the “Restoration”), and require Borrower casualty or Franchisee does not elect to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, terminate this Agreement in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration provisions of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effectthis Paragraph XIX.B., the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Hotel shall be applied first to the final payment due under the Note promptly renovated and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect reopened within a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking reasonable time in accordance with the foregoing provisions System and Borrower shall pay pursuant to Lender all costs plans and expenses of Lender incurred specifications approved by Franchisor in administering said rebuilding, restoration or repair, provided accordance with Section VII and the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject Addendum attached hereto (to the preceding provisions extent Franchisor determines that such Addendum applies to reinstatement of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive Hotel after the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereofcasualty), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 2 contracts
Samples: Franchise Agreement, Franchise Agreement (Apple REIT Seven, Inc.)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) The Lessee hereby irrevocably assigns to the Lessor any award or compensation or insurance payment or other proceeds to which the Lessee may become entitled by reason of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, its interest in the Property or any portion thereof. All insurance part thereof (other than proceeds on from business interruption insurance) if prior to the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all Expiration Date (i) the Property or any part thereof is damaged or destroyed by fire or other casualty (each, a "Casualty") or (ii) the use, occupancy or title of the Property or any part thereof is taken or requisitioned or sold in, or on account of any actual or threatened condemnation or eminent domain proceedings, or other action by any Person having the power of eminent domain or condemnation (each, a "Condemnation").
(b) The Lessee shall promptly notify the Lessor in writing of any such Casualty or Condemnation and shall appear in any proceeding or action to defend, negotiate, prosecute or adjust any claim for any damage award or injury to it for compensation or insurance payment on account of any loss Casualty or diminution in value of the Property, are hereby assigned to Condemnation and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of take all appropriate action in connection therewith, and Borrower shall from time to time deliver to Lender with any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower Casualty or Condemnation. The Lessor shall have the right to directly receive proceeds with respect toappear and participate and to employ counsel in any such proceeding or action, any loss which is not in excess of and the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note fees and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any expenses of such proceeds counsel shall be paid by the Lessor. If the Lessee shall elect not to be used appear or shall fail to reimburse Borrower for prosecute diligently, the cost of restoring Lessor may assume the prosecution thereof and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender Lessee shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if pay all of the following conditions are met: (1) no Default or Event of Default has occurred reasonable costs and is continuing; (2) in the case of casualty, less than forty percent (40%) expenses of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration Lessor (including, without limitationbut not limited to, by means fees and expenses of a deposit Lessor's Special Counsel) and the fees and expenses of Special Counsel. No settlement of any shortfall such proceeding or action shall be made by Borrower with Lender prior to the commencement Lessee or the Lessor without the written consent of the Restoration other party hereto, which consent shall not unreasonably be withheld, conditioned or promptly upon Lender’s determination that delayed.
(c) Any and all amounts representing proceeds paid in connection with any such a shortfall exists); (4) Lender determinesCondemnation or Casualty, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking be (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any eventcollectively, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence"Proceeds"), shall be applied first paid over to the final payment due under Proceeds Trustee to be held in trust by such Proceeds Trustee and distributed pursuant to this Section 7.01(c) and Sections 7.03 and 7.04, as appropriate (all such Proceeds, less the costs and expenses incurred by the Lessor and the Lessee in collecting such amounts, but including any reimbursement by the Lessee for costs and expenses in connection therewith to which the Lessor, the Certificate Holders and the Note Holders are entitled pursuant to the Operative Documents or Securitization Documents, are the "Net Proceeds"). Any and thereafter all Proceeds received by the Lessee in connection with any such proceeding or action shall be paid over to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriateLessor, shall be sufficient for segregated from other funds of the purpose, restore, repair, replace Lessor and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject forthwith paid over to the preceding provisions of Proceeds Trustee. The Lessee agrees that this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney Lease shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.control the
Appears in 2 contracts
Samples: Lease (Williams Communications Group Inc), Lease Agreement (Williams Communications Group Inc)
Condemnation and Casualty. Borrower shall give Lender prompt written notice A. Lessee hereby irrevocably assigns to Lessor any award, compensation or insurance payment to which Lessee may become entitled by reason of Lessee's interest in the Premises (i) if the use, occupancy or title of the occurrence Premises or any part thereof is taken, requisitioned or sold in, by or on account of any casualty (actual or threatened eminent domain proceeding or other than a de minimus casualty) affectingaction by any person having the power of eminent domain, or (ii) if the institution Premises or any part thereof are damaged or destroyed by fire, flood of other casualty. Lessee shall, promptly upon obtaining knowledge of such damage or destruction, or of any proceedings for eminent domain such proceeding or action for the condemnation of, taking of the Property Premises or any portion part thereof, notify Lessor of the pendency thereof. Lessor may appear at any proceeding or action to negotiate, prosecute and adjust any claim for any award, compensation or insurance payment on account of any such damage, destruction, taking, requisition or sale, and Lessor shall collect any such award, compensation or insurance payment. All insurance proceeds on the Propertyamounts paid in connection with any such damage, destruction, taking, requisition or sale shall be applied pursuant to this paragraph, and all causes such amounts (minus the expense of collecting such amounts) are herein call the Net Proceeds. Lessor shall pay all reasonable costs and expenses in connection with each such proceeding, action, claimsnegotiation, compensationprosecution and adjustment, awards for which costs and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and expenses Lessor shall be paid reimbursed out of any award, compensation or insurance payment received. Lessee shall be entitled to Lender. Lender may participate in any suits such proceedings, action, negotiation, prosecution or proceedings relating adjustment. The foregoing notwithstanding, nothing in this Lease shall impair Lessee's right to any such proceedsaward or payment on account of Lessee's trade fixtures, causes equipment and other tangible personal property, moving expenses and loss of actionbusiness, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s nameif available, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower extent Lessee shall have the right to directly receive proceeds with respect tomake a claim therefore against the person having the power of eminent domain, but in no event shall any loss which is not in excess such claim be based upon the value of Lessee's leasehold interest.
B. In the event an occurrence of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments character referred to in the Note clause (A.) above shall affect all or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid a substantial portion of the Obligations Premises and shall remain in full force render the Premises unsuitable for restoration for continued use and effect and Borrower shall not be excused occupancy for the purpose set forth in the payment thereof. Except as provided Lease, Lessee shall have the option to terminate this Lease, in the Note, partial payments received by Lender, as described in the preceding sentence, which event Lessor shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds retain all awards or condemnation award, as appropriate, shall be sufficient compensation granted for the purposeoccurrence of such event, restore, repair, replace and rebuild the Property except for those awards or compensations which are payable to Lessee and/or any subtenant as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforset forth above.
Appears in 2 contracts
Samples: Sub Lease (Epi Technologies Inc/De), Lease (Epi Technologies Inc/De)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Subject to the provisions of this Section 15 and Section 16 (in the event Lessee delivers, or is obligated to deliver, a Termination Notice), and prior to the occurrence and continuation of a Lease Default, Lessee shall be entitled to receive any casualty award, compensation or insurance proceeds to which Lessee or Lessor may become entitled by reason of their respective interests in a Property (other than i) if all or a de minimus casualtyportion of such Property is damaged or destroyed in whole or in part by a Casualty or (ii) affectingif the use, access, occupancy, easement rights or the institution of any proceedings for eminent domain or for the condemnation of, the title to such Property or any portion thereof. All insurance proceeds on part thereof is the Property, and all causes subject of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationa Condemnation; provided, however, if a Lease Default shall have occurred and be continuing such award, compensation or insurance proceeds shall be paid directly to Lessor or, if received by Lessee, shall be held in trust for Lessor, and shall be paid over by Lessee to Lessor, and provided further that so in the event of any Casualty or Condemnation, the estimated cost of restoration of which is in excess of $1,000,000, any such award, compensation or insurance proceeds shall be paid directly to Lessor, or if received by Lessee, shall be held in trust for Lessor and shall be paid over by Lessee to Lessor.
(b) So long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Lease Event of Default has occurred and is continuing, Lessee may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any LEASE claim for any award, compensation or insurance payment on account of any such Casualty or Condemnation and shall pay all expenses thereof; (2) in provided that if the case estimated cost of casualty, less than forty percent (40%) restoration of the Improvements have been damagedProperty or the payment on account of such Casualty or Condemnation is in excess of $1,000,000, then Lessor shall, at Lessee's sole cost and expense, be entitled to participate in any such proceeding or action. At Lessee's reasonable request, and at Lessee's sole cost and expense, Lessor and the Administrative Agent shall participate in any such proceeding, action, negotiation, prosecution or adjustment. Lessor and Lessee agree that this Lease shall control the case rights of Lessor and Lessee in and to any award, compensation or insurance payment.
(c) If Lessor or Lessee shall receive notice of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means Casualty or a possible Condemnation of a deposit of Property or any shortfall by Borrower with Lender prior to the commencement of the Restoration interest therein, Lessor or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determinesLessee, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or shall give notice thereof to the tenant under other and to the Principal Lease affirms in writing that it has waived any right to terminate Administrative Agent promptly after the Principal Lease as a result receipt of such casualty notice.
(d) In the event of a Casualty or taking receipt of notice by Lessee or Lessor of a Condemnation, Lessee shall, not later than thirty (as 30) days after such occurrence, deliver to Lessor and the case may be). Except as provided in the Note any application of any awards Administrative Agent an Officer's Certificate stating that either (i) (x) such Casualty is not a Significant Casualty or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of (y) such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums Condemnation is neither a Total Condemnation nor a Significant Condemnation and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations that this Lease shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first with respect to the final payment due under the Note applicable Property and, at Lessee's sole cost and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restorationexpense, Borrower Lessee shall promptly and diligentlydiligently restore the applicable Property in accordance with the terms of Section 15.1(e) or (ii) this Lease shall terminate with respect to the applicable Property in accordance with Section 16.1.
(e) If pursuant to this Section 15.1, this Lease shall continue in full force and effect following a Casualty or Condemnation with respect to the affected Property, Lessee shall, at Borrower’s its sole cost and expense expense, promptly and regardless diligently repair any damage to the applicable Property caused by such Casualty or Condemnation in conformity with the requirements of whether Sections 10.1 and 11.1 using the insurance proceeds or condemnation award, as appropriate, shall be sufficient as-built plans and specifications for the purposeapplicable Property (as modified to give effect to any subsequent Modifications, restore, repair, replace and rebuild any Condemnation affecting the Property and all applicable Legal Requirements) so as nearly to restore the applicable Property to at least the same condition, operation, function, useful life and value as possible to its value, condition and character existed immediately prior to such casualty Casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuildingCondemnation. In such event, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject title to the preceding provisions applicable Property shall remain with Lessor. Upon completion of such restoration, Lessee shall furnish to Lessor and the Administrative Agent an architect's certificate of completion and an Officer's Certificate confirming that such restoration has been completed pursuant to this Lease.
(f) In no event shall a Casualty or Condemnation affect Lessee's obligations to pay Rent pursuant to Section 1.7, Lender is hereby irrevocably constituted 3.1 or to perform its obligations and appointed pay any amounts due on the attorney-in-fact of Borrower Maturity Date or pursuant to Sections 20 or 21.
(which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent g) Notwithstanding anything to the date hereofcontrary set forth in Section 15.1(a) or Section 15.1(e), if during the Term a Casualty occurs with full power respect to a Property or Lessee receives notice of substitutiona Condemnation with respect to a Property, subject to and following such Casualty or Condemnation, such Property cannot reasonably be restored on or before the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.Purchase
Appears in 2 contracts
Samples: Lease Agreement (Quality Food Centers Inc), Lease Agreement (Fred Meyer Inc)
Condemnation and Casualty. Borrower If at any time during the Term the Premises, Common Areas or Project is in whole or in part (i) materially damaged or destroyed by a fire or other casualty, or (ii) taken for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof (a “Taking”), then this Lease shall, at the written election of Landlord delivered to Tenant within sixty (60) days following such casualty or taking, terminate as of the date of such damage, destruction or Taking. If at any time during the Term the Premises or Common Areas are in whole or in part (i) materially damaged or destroyed by a fire or other casualty, or (ii) subject to a Taking, then this Lease shall, at the written election of Tenant delivered to Landlord within sixty (60) days following such casualty or taking, terminate as of the date of such damage, destruction or Taking. Unless either Landlord or Tenant so elects to terminate this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (with any deductible to be treated as a current Operating Expense), promptly restore the Premises and Common Areas (excluding the improvements installed by Tenant or by Landlord and paid for by Tenant), subject to delays arising from the collection of insurance proceeds, from Force Majeure events or as needed to obtain any license, clearance or other authorization of any kind required to enter into and restore the Premises issued by any Governmental Authority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of Hazardous Materials (as defined in Section 26) in, on or about the Premises or Common Areas (collectively referred to herein as “Hazardous Materials Clearances”). If neither Tenant nor Landlord elect to terminate this Lease pursuant to the immediately preceding paragraph, Rent shall give Lender prompt be abated from the date all required Hazardous Material Clearances are obtained until the Premises or Common Areas are repaired and restored, in the proportion which the area of the Premises, if any, which is not usable by Tenant bears to the total area of the Premises, unless Landlord provides Tenant with other space during the period of repair that is suitable for the temporary conduct of Tenant’s business. Such abatement shall be the sole remedy of Tenant, and except as provided in this Section 15. Tenant waives any right to terminate the Lease by reason of damage or casualty loss, provided that, if Landlord shall fail to restore the Premises or Common Areas within 12 months after the receipt of any Hazardous Materials Clearances determined by Landlord to be required (or if Landlord determines that no Hazardous Materials Clearances are required, within 12 months of the end of the 60-day period referred to in the first and second sentences of the immediately preceding paragraph), Tenant shall have a further right to terminate this Lease by written notice to Landlord delivered within 60 days after the expiration of the occurrence such 12-month period, provided further, that if Landlord completes such restoration within 30 days after receipt of Tenant’s termination notice, such termination notice shall be void and this Lease shall continue in full force and effect. The provisions of this Lease, including this Section 15, constitute an express agreement between Landlord and Tenant with respect to any casualty (other than a de minimus casualty) affectingand all damage to, or the institution of any proceedings for eminent domain or for the condemnation destruction of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property Premises, or for any other portion of the Project, and any statute or regulation which is now or may hereafter be in effect shall have no application to this Lease or any damage or injury destruction to it for all or any loss or diminution in value part of the PropertyPremises or any other portion of the Project, are hereby assigned the parties hereto expressly agreeing that this Section 15 sets forth their entire understanding and agreement with respect to and such matters. Upon any fire or other casualty or Taking, Landlord shall be paid entitled to Lender. Lender may participate in any suits receive the entire proceeds of the insurance maintained by Landlord and the entire price or proceedings relating to award from any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorizedTaking without, in its own name or in Borrower’s nameeither case, any payment to adjust any loss covered by insurance or any condemnation claim or cause of actionTenant, and Tenant hereby assigns to settle Landlord Tenant’s interest, if any, in such proceeds or compromise any claim or cause of action in connection therewithaward, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, except that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower Tenant shall have the right to directly receive proceeds with respect toright, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnationextent that same shall not diminish Landlord’s award, to make a condition approved by Lender separate claim against the condemning authority (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (zbut not Landlord) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments compensation as may be requested separately awarded or recoverable by Lender Tenant for moving expenses and damage to confirm the foregoing assignment Tenant’s trade fixtures, if a separate award for such items is made to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforTenant.
Appears in 2 contracts
Samples: Lease Agreement (Eleven Biotherapeutics, Inc.), Lease Agreement (Eleven Biotherapeutics, Inc.)
Condemnation and Casualty. Borrower (a) If, before the Closing, Seller receives notice that the Hotel/Casino and the Land is to be wholly condemned, or to be condemned in such substantial part as would materially and adversely affect the ability to operate the remainder of the Hotel/Casino, or if the Hotel/Casino is wholly destroyed by fire or other casualty, or if so much of the Hotel/Casino is damaged by fire or other casualty that: (i) the cost of repairing such damage is at least Five Million Dollars ($5,000,000), as determined by the claims adjuster appointed by the casualty insurer(s) insuring the Hotel/Casino for Seller (the “Adjustment”); or (ii) more than one-third (1/3) of the gaming positions on the Vessel or one-third (1/3) of the guest rooms in the Hotel/Casino are out of operation on the Closing Date (collectively and separately the “Threshold”), then, in such event, Buyer and Seller shall give Lender prompt written each have the right to terminate this Agreement by delivering notice of termination in writing to the occurrence other party within ten (10) days after the receipt of any casualty notice of such condemnation or Adjustment, as the case may be, (other than a de minimus casualty) affectingwhich notice will, to the extent then known, contain the amount of compensation offered for such condemnation or the institution adjusted amount of any proceedings for eminent domain or for damage caused by the condemnation ofcasualty, as the case may be) and, upon giving such notice of termination, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and Deposit shall be paid by Escrow Agent to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of actionBuyer, and Seller and Buyer shall each be released and discharged from any further obligation to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationeach other hereunder; provided, however, that so long as no Event of Default is continuingif neither Buyer nor Seller elects to terminate this Agreement, Lender the purchase contemplated herein shall not participate in be consummated within the adjustment later of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of : (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determinesBusiness Days after the expiration of such ten (10) day period, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date Closing Date, and Buyer shall be entitled to, reduction of the loss or casualty and (B) Purchase Price in the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion amount of the Restoration; Adjustment (6the “Casualty Credit”) upon Lender’s requestor to the condemnation award, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), as full compensation for the damage (but shall itself insure business interruption and have no claim against Seller or Seller’s business interruption insurance) and Seller shall have no responsibility for the restoration and repair of the Property or any resultant loss, directly, by subrogation, or otherwise. If the tenant under Adjustment has not been completed and the Principal Lease affirms in writing that it has waived any right time for the Buyer and Seller to terminate the Principal Lease as a result of this Agreement with respect to such casualty and loss has not expired, prior to the Closing Date, the Closing Date shall be extended until two (2) days after the later of: (i) the date upon which the Adjustment is completed, if the adjustment exceeds the Threshold; and (ii) the date of expiration of the time for Buyer and Seller to terminate this Agreement.
(b) If, before the Closing, the Hotel/Casino is damaged by fire or taking (other casualty to the extent that the cost of repairing or restoring the same, and the number of gaming positions on the Vessel that are out of operation on the Closing Date, are below the Threshold, or if Seller receives notice that the Hotel/Casino and/or Land is to be partially condemned, but without materially and adversely affecting the ability to operate the remaining portion of the Hotel/Casino, then, and in any such event, the Closing shall proceed as scheduled and Buyer shall receive the Casualty Credit or the condemnation award, as the case may be). Except , as provided in full compensation for the Note any application of any awards or proceeds damage to the Obligations Hotel/Casino (but shall not extend itself insure business interruption and have no claim against Seller or postpone the due date of any monthly installments referred to in the Note Seller’s business interruption insurance), and Seller shall have no responsibility for restoration or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion repair of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the NoteProperty or any resultant loss, partial payments received directly, by Lendersubrogation, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforotherwise.
Appears in 2 contracts
Samples: Agreement of Sale (Nevada Gold & Casinos Inc), Agreement of Sale (Columbia Properties Vicksburg LLC)
Condemnation and Casualty. Borrower shall give Lender prompt written (A) If, before the Closing (as defined in the Purchase and Sale Agreement), Seller receives notice of that the occurrence of any casualty (other than a de minimus casualty) affectingProperty is to be wholly condemned, or to be condemned in such substantial part as would materially and adversely effect the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds Buyer's ability to operate its business on the Property, and all causes of actionor if the Property is wholly destroyed by fire or other casualty, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part if so much of the Property is damaged by fire or for any damage or injury other casualty to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, extent that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property such damage shall amount to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than at least twenty-five percent (25%) of the Improvements have been taken; (3) Lender determinesPurchase Price as determined by the casualty insurer insuring the Property, then, in its discretionany such event, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determinesBuyer, in its discretionthe event it has already exercised the Option, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not shall have the right to terminate this Agreement by delivering notice of such termination in writing to Seller within (30) days after receipt of notice of such condemnation or casualty, and Seller and Buyer shall each be released and discharged from any obligation to each other hereunder; provided, however, that if Buyer elects not to terminate this Agreement after it has exercised the Principal Lease due Option, the purchase contemplated herein shall be consummated without reduction to the Purchase Price, but Buyer shall be entitled to all proceeds of fire or other casualty insurance or condemnation, and Seller shall have no responsibility for the restoration and repair of the Property.
(B) If, prior to the Closing (assuming Buyer has exercised its Option), the Property is damaged by fire or other casualty to the extent that the cost of repairing or restoring the same shall be less than an amount equal to twenty-five percent (25%) of the Purchase Price or if Seller receives notice that the Property is to be partially condemned but without materially and adversely effecting Buyer's ability to operate its business on the remaining portion of the Property, then, in any such event, the Closing shall proceed as scheduled and Seller shall assign to Buyer the proceeds of any casualty insurance or taking (any condemnation award, as the case may be), and Seller shall have no responsibility for restoration or repair of the tenant under Property. In the Principal Lease affirms in writing that it has waived any event all or a part of the Property is appropriated during the Option Period and Buyer elects not to proceed with the Closing, Buyer will have a compensable interest and a right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided share in the Note any application of any awards or proceeds condemnation award to the Obligations shall not extend or postpone extent that the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andexcess, in any eventif any, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in total award is above the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforPurchase Price.
Appears in 1 contract
Samples: Lease (Agritope Inc)
Condemnation and Casualty. Borrower Mortgagor shall give Lender Mortgagee prompt written notice of the occurrence of any material casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to LenderMortgagee, subject to the First Mortgage. Lender Mortgagee may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender Mortgagee is hereby authorized, in its own name or in BorrowerMortgagor’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower Mortgagor shall from time to time deliver to Lender Mortgagee any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender Mortgagee shall not have the right to participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, of any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.002,000.00. Except as provided in the foregoing sentence, Lender Mortgagee may, at LenderMortgagee’s optionoption and subject to the First Mortgage, (y) if requested by Mortgagor and consented to by Mortgagee, hold the balance of any of such proceeds to be used to reimburse Borrower Mortgagor for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition reasonably approved by LenderMortgagee (the "Restoration"), or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent LenderMortgagee, pursuant to Mortgagor’s request and in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender Mortgagee shall do so in accordance with LenderMortgagee’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender Mortgagee shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have has been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have has been taken; (3) Lender Mortgagee determines, in its reasonable discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower Mortgagor with Lender Mortgagee prior to the commencement of the Restoration or promptly upon LenderMortgagee’s determination that such a shortfall exists); (4) Lender Mortgagee determines, in its reasonable discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender Mortgagee determines, in its reasonable discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; and (6) upon Lender’s Mortgagee's request, Borrower Mortgagor provides Lender Mortgagee evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower Mortgagor pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is . Unless Mortgagee otherwise agrees in full force and effectwriting, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower Mortgagor agrees to execute such further evidence of assignment of any awards or proceeds as Lender Mortgagee may require. Any reduction in the Obligations resulting from LenderMortgagee’s application of any sums received by it hereunder shall take effect only when Lender Mortgagee actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower Mortgagor shall not be excused in the payment thereof. Except as provided in the Note, partial Partial payments received by LenderMortgagee, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower Mortgagor elects to effect a Restoration, Borrower Mortgagor shall promptly and diligently, at BorrowerMortgagor’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower Mortgagor shall pay to Lender Mortgagee all costs and expenses of Lender Mortgagee incurred in administering said rebuilding, restoration or repair, provided the Lender Mortgagee makes such proceeds or award available for such purpose. Borrower Mortgagor agrees to execute and deliver from time to time such further instruments as may be requested by Lender Mortgagee to confirm the foregoing assignment to Lender Mortgagee of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender Mortgagee is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower Mortgagor (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower Mortgagor and shall not be affected by any disability or incapacity suffered by Borrower Mortgagor subsequent to the date hereof), with full power of substitution, subject to the terms of this sectionsection and the Subordination Agreement, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Samples: Mortgage Agreement (Talon Real Estate Holding Corp.)
Condemnation and Casualty. Borrower shall A. Franchisee shall, at the earliest possible time, give Lender prompt written Franchisor notice of any proposed taking by eminent domain. If the occurrence of any casualty (other than a de minimus casualty) affectingHotel is condemned, or such a substantial portion of the institution Hotel is condemned to render impractical the continued operation of any proceedings for eminent domain the Hotel in accordance with the System, this Agreement shall terminate upon notice by Franchisor or for Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationaward; provided, however, that so long as no Event of Default is continuingFranchisor’s portion shall be limited to compensating Franchisor for Franchisor’s lost royalty income, Lender which amount shall not participate exceed the amount of the applicable liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee shall promptly make whatever repairs and restoration may be necessary to make the adjustment ofHotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and Borrower the resumption of normal operation of the Hotel shall not be unreasonably delayed.
B. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to directly receive proceeds with respect toterminate this Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any loss of its members if it is a limited liability company or any of its affiliated companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”) has a greater than fifteen percent interest in or operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in excess such event, Franchisee shall be obligated to promptly pay to Franchisor an amount equal to the applicable liquidated damages set forth at Paragraph XVIII.E., and the time element for calculating the amount of applicable liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half (1/2) the number of months then remaining between (i) ten percent (10%) of the then outstanding principal balance of date upon which the Note Other Lodging Product is first operated by or for the Franchisee Entity and (ii) $500,000.00the Term Expiration Date. Except as provided in Franchisee’s obligation set forth herein shall survive termination of this Agreement pursuant to this Paragraph XIX.B. In the foregoing sentence, Lender may, at Lender’s option, event the Hotel does not close for more than ninety (y90) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, days due to a condition approved by Lender (the “Restoration”), and require Borrower casualty or Franchisee does not elect to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, terminate this Agreement in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration provisions of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effectthis Paragraph XIX.B., the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Hotel shall be applied first to the final payment due under the Note promptly renovated and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect reopened within a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking reasonable time in accordance with the foregoing provisions System and Borrower shall pay pursuant to Lender all costs plans and expenses of Lender incurred specifications approved by Franchisor in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this accordance with Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforVII.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Anticipated Balloon Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower Bxxxxxxx agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from LenderLxxxxx’s application of any sums received by it hereunder shall take effect only when Lender Lxxxxx actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by LenderLxxxxx, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower Bxxxxxxx agrees to execute and deliver from time to time such further instruments as may be requested by Lender Lxxxxx to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Samples: Deed of Trust, Assignment of Leases and Rents and Security Agreement (Gladstone Commercial Corp)
Condemnation and Casualty. Borrower shall give Lender prompt written notice 16.1 Lessee irrevocably assigns to Lessor any award, compensation or insurance payment to which Lessee may become entitled by reason of Lessee's interest in the occurrence Leased Premises (a) if the use or occupancy of any casualty (other than a de minimus casualty) affectingor title to the Leased Premises, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of or interest in the Property Leased Premises, is taken, requisitioned or sold because of any actual or threatened eminent domain proceeding or other action by any person having the power of eminent domain (collectively, a "CONDEMNATION") or (b) if the Leased Premises are damaged or destroyed, in whole or in part, by fire, flood or other casualty (collectively, a "CASUALTY"). Lessor may appear in any proceeding, action, negotiation, prosecution or adjustment and negotiate, prosecute and adjust any claim for any damage award, compensation or injury to it for insurance payment on account of any loss Condemnation or diminution Casualty, and Lessor shall collect any award, compensation or insurance payment. All amounts paid in value of the Property, are hereby assigned to and connection with any Condemnation or Casualty shall be paid applied pursuant to Lenderthis Section 16, and all of those amounts (minus the reasonable and necessary expense of collecting such amounts) are referred to as the "NET PROCEEDS." Lessor may advance any reasonable and necessary costs and expenses in connection with any proceeding, action, negotiation, prosecution and adjustment. Lender may The reasonable and necessary costs and expenses so advanced by Lessor shall be reimbursed out of any award, compensation or insurance payment received. Lessee shall not be entitled to participate in any suits such proceeding, action, negotiation, prosecution or proceedings relating adjustment, provided that Lessee preserves its right to pursue a separate claim or claims as set forth in the following sentence. Nothing in this Lease shall impair Lessee's right to negotiate, prosecute, obtain and/or collect any separate award or payment relative to any such proceedsof Lessee's lost profits, causes damage to Lessee's business, trade fixtures, equipment and personal property or Lessee's moving and relocation expenses, but in no event shall any claim of actionLessee be based upon the value of Lessee's leasehold interest.
16.2 After an occurrence of a Condemnation or Casualty, claimsunless this Lease is terminated pursuant to the provisions of this Section 16.2 or Section 16.3 below, compensation, awards or recoveries and Lender is hereby authorized, this Lease shall continue in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of actionfull effect, and to settle or compromise any claim or cause of action in connection therewith, and Borrower the Base Rent shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in be equitably abated based upon the adjustment percentage of, and Borrower for the period of time that, the Leased Premises are rendered untenantable. In that event, Lessor shall, subject to the termination provisions provided below, rebuild, replace or repair any damage to the Leased Premises caused by such event so as to restore the Leased Premises (in the case of Condemnation, as nearly as practicable) to that which existed prior to such Casualty or Condemnation as the case may be. The work shall be commenced and completed in a prompt manner, subject to any delays due to matters beyond Lessor's reasonable control. Any Net Proceeds remaining after completion of the work to be performed by Lessor pursuant to this Section 16.2 shall be the sole property of Lessor. Following the occurrence of a Casualty or Condemnation, Lessor shall have the right to directly receive proceeds with respect toterminate this Lease upon 60 days notice to Lessee. In the event of termination, any loss which is not in excess Lessor and Lessee shall be released from all further obligations under this Lease, and the Base Rent and other sums due under this Lease shall be prorated to the effective date of the lesser of termination.
16.3 If (i) ten percent (10%) of the then outstanding principal balance of the Note a Condemnation occurs and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any is of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, nature that the rental income from Building cannot be rebuilt so that upon completion Lessee may again use the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note Leased Premises without substantial interference or (ii) one year after at any time during the date Term, a Casualty occurs that will require repairs to the Building reasonably estimated by Lessor to cost more than 25% of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion value of the Restoration; (6) upon Lender’s requestBuilding, Borrower provides Lender evidence then, in either of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effectthese events, the tenant under the Principal Lease does not Lessee shall have the right to terminate this Lease by giving notice to Lessor within 60 days after the Principal occurrence of the Condemnation or Casualty. In the event of termination, Lessor and Lessee shall be released from all further obligations under this Lease, and the Base Rent and other sums due under this Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds shall be prorated to the Obligations shall not extend or postpone the due effective date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefortermination.
Appears in 1 contract
Samples: Lease (Monarch Machine Tool Co)
Condemnation and Casualty. Borrower shall A. Franchisee shall, at the earliest possible time, give Lender prompt written Franchisor notice of any proposed taking by eminent domain. If the occurrence of any casualty (other than a de minimus casualty) affectingHotel is condemned, or such a substantial portion of the institution Hotel is condemned to render impractical the continued operation of any proceedings for eminent domain the Hotel in accordance with the System, this Agreement shall terminate upon notice by Franchisor or for Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationaward; provided, however, that so long as no Event of Default is continuingFranchisor’s portion shall be limited to compensating Franchisor for Franchisor’s lost royalty income, Lender which amount shall not participate exceed the amount of the applicable liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee shall promptly make whatever repairs and restoration may be necessary to make the adjustment ofHotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and Borrower the resumption of normal operation of the Hotel shall not be unreasonably delayed.
B. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to directly receive proceeds with respect toterminate this Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any loss of its members if it is a limited liability company or any of its affiliated companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”), has a greater than fifteen percent interest in or operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in excess such event, Franchisee shall be obligated to promptly pay to Franchisor an amount equal to the applicable liquidated damages set forth at Paragraph XVIII.E., and the time element for calculating the amount of applicable liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half ( 1/2) the number of months then remaining between (i) ten percent (10%) of the then outstanding principal balance of date upon which the Note Other Lodging Product is first operated by or for the Franchisee Entity and (ii) $500,000.00the Term Expiration Date. Except as provided in Franchisee’s obligation set forth herein shall survive termination of this Agreement pursuant to this Paragraph XIX.B. In the foregoing sentence, Lender may, at Lender’s option, event the Hotel does not close for more than ninety (y90) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, days due to a condition approved by Lender (the “Restoration”), and require Borrower casualty or Franchisee does not elect to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, terminate this Agreement in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration provisions of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effectthis Paragraph XIX.B., the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Hotel shall be applied first to the final payment due under the Note promptly renovated and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect reopened within a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking reasonable time in accordance with the foregoing provisions System and Borrower shall pay pursuant to Lender all costs plans and expenses of Lender incurred specifications approved by Franchisor in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this accordance with Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforVII.
Appears in 1 contract
Condemnation and Casualty. Borrower (a) Lessee hereby irrevocably assigns to Lessor any award, compensation or insurance payment to which Lessee may become entitled by reason of Lessee’s interest in the Premises (i) if the use, occupancy or title of the Premises or any part thereof is taken, requisitioned or sold in, by or on account of any actual or threatened eminent domain proceeding or other action by any person having the power of eminent domain or (ii) if the Premises or any part thereof are damaged or destroyed by fire, flood or other casualty. Lessor shall give Lender prompt written appear in any such proceeding or action, to negotiate, prosecute and adjust any claim for any award, compensation or insurance payment on account of any such damage, destruction, taking, requisition or sale; and Lessor shall collect any such award, compensation or insurance payment. All amounts paid in connection with any such damage, destruction, taking, requisition or sale shall be applied pursuant to this paragraph 11, and all such amounts (minus the reasonable expense of collecting such amounts, including any reimbursement for costs and expenses in connection therewith to which the Master Lessor is entitled pursuant to the Master Lease and any amount thereof to which the ground lessor under the Ground Lease shall be entitled), are herein called the Net Proceeds. Lessor shall pay all reasonable costs and expenses in connection with each such proceeding, action, negotiation, prosecution and adjustment for which costs and expenses Lessor shall be reimbursed out of any award, compensation or insurance payment received. Lessee shall be entitled to participate in any such proceeding, action, negotiation, prosecution and adjustment. Lessor will not consent to any award, compensation or insurance payment where any portion of such award, compensation or insurance payment is made in respect of. Lessee’s interest in the Premises, without the consent of Lessee, which consent shall not be unreasonably withheld.
(b) If an occurrence of the character referred to in clauses (i) or (ii) of paragraph 11(a) shall affect all or a substantial portion of the Land and Improvements and shall render the Improvements unsuitable for restoration for continued use and occupancy in Lessee’s business, the Lessee shall, not later than 90 days after such occurrence, deliver to Lessor and any overlessor designated by Lessor (i) notice of its intention to terminate this Lease on the next Payment Date (the Termination Date) which occurs not less than 180 days after the delivery of such notice, (ii) a certificate of Lessee describing the event giving rise to such termination and stating that its board of directors has determined that such event has rendered the Improvements unsuitable for restoration for continued use and occupancy in Lessee’s business, and (iii) documentation to the effect that termination of this Lease will not be in violation of any agreement with third parties then in effect or of appropriate waivers of any such violations. If the Termination Date occurs during the Initial Term or Primary Term, such notice to Lessor shall be accompanied by an irrevocable offer by Lessee to purchase on the Termination Date the interests of Lessor and Master Lessor in the remaining portion of the Premises and the Net Proceeds, if any, payable in connection with such occurrence (or the right to receive the same when made, if payment thereof has not yet been made), at a price determined in accordance with Schedule C. If either (1) Lessor shall reject such offer by notice given to Lessee not later than the 20th day prior to the Termination Date or shall be deemed to have rejected such offer as provided in the next succeeding sentence or (2) the Termination Date occurs during an Extended Term, this Lease shall terminate on the Termination Date, except with respect to obligations and liabilities of Lessee hereunder, actual or contingent, which have arisen on or. prior to the Termination Date, upon payment by Lessee of all Deferred Rent to and including the Termination Date, and all Rent Payments, additional rent and other sums then due and payable hereunder to and including the Termination Date, and the Net Proceeds shall belong to Lessor provided, that, if such termination is the result of an event of the character described in clause (i) of paragraph 11(a), the Net Proceeds shall be divided between Lessor and Lessee in proportion to the value of their respective interests in the Premises at the time of the occurrence of such event. If either the Master Lessor shall reject the offer required to be made by Lessor in accordance with paragraph 11(b) of the Master Lease or such offer by Lessor shall be deemed revoked or rescinded as provided in paragraph 11(b) of the Master Lease, then, for all purposes hereunder and irrespective of whether Lessor shall have theretofore accepted Lessee’s offer, Lessor shall conclusively be deemed to have rejected Lessee’s offer in accordance with this paragraph. Unless Lessor shall have rejected such offer or shall have been deemed to have rejected such offer, in either case in accordance with this paragraph, Lessor shall be conclusively presumed to have accepted such offer, and, on the Termination Date, there shall be conveyed to Lessee or its designee the interests of Lessor and the Master Lessor in the remaining portion of the Premises, if any, and there shall be assigned to Lessee or its designee all of the interests of Lessor and the Master Lessor in the Net Proceeds together with any casualty amounts which Lessor or Master Lessor may have earned on such Net Proceeds from the date of receipt of such Net Proceeds to the Termination Date, pursuant to and upon compliance with paragraph 15.
(other than c) If, after an occurrence of the character referred to in clauses (i) or (ii) of paragraph 11(a), Lessee does not give notice of its intention to terminate this Lease as provided in paragraph 11(b), then this Lease shall continue in full effect, and if such occurrence is during the Initial or Primary Term of the Lease, Lessee shall rebuild, replace or repair any damage to the Premises caused by such event in conformity with the requirements of paragraph 10 so as to restore the Premises (as nearly as practicable, giving due consideration to the reduction in size of the Premises attributable to condemnation) to the condition and market value thereof immediately prior to such occurrence. Prior to any such rebuilding, Lessor and Lessee shall agree on the maximum cost of such rebuilding (the Restoration Cost). The Restoration Cost shall be paid first out of Lessee’s own funds to the extent that the Restoration Cost exceeds the Net Proceeds payable in connection with such occurrence, after which expenditure Lessee shall be en-titled to receive the Net Proceeds, but only against certificates of Lessee delivered to Lessor from time to time as such work of rebuilding, replacement and repair progresses, each such certificate describing the work for which Lessee is requesting payment and the cost incurred by Lessee in connection therewith and stating that Lessee has not theretofore received payment for such work. Lessee may post a de minimus casualtybond, satisfactory to Lessor, in an amount equal to that by which the Restoration Cost exceeds the Net Proceeds. If Lessee posts such bond, the Restoration Cost shall be paid first out of the Net Proceeds and to the extent that the Restoration Cost exceeds the Net Proceeds, the balance of the Restoration Cost shall be paid out of Lessee’s own funds. Any Net Proceeds remaining after final payment has been made for such work shall be retained by Lessor in the case of an occurrence of the character referred to in clause (i) affectingof paragraph 11(a) (provided, or however, that if the institution Restoration Cost is paid first out of any proceedings for eminent domain or Lessee’s own funds and the Net Proceeds exceed the balance of the Restoration Cost, there shall be paid to Lessee first out of the remaining Net Proceeds, to the extent available, an amount equal to that of Lessee’s own funds paid for the condemnation of, the Property or any portion thereof. All insurance proceeds on the PropertyRestoration Cost, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part the balance of the Property or for any damage or injury to it for any loss or diminution in value of the Propertyremaining Net Proceeds, are hereby assigned to if any, shall be retained by Lessor) and shall be paid to LenderLessee in the event of an occurrence of the character referred to in clause (ii) of paragraph 11(a). Lender may participate To the extent that any Net Proceeds in excess of $25,000 remain after restoration and are retained by Lessor, (i) Schedule C shall be modified by recomputing the. percentages set forth in Column 2 thereof to reflect at each period therein the present value of the remaining Rent Payments (reduced as described below) during the Primary Term of this Lease using a discount rate of 5.236% per semiannual rental period and by further modifying such percentage so as to reduce any suits amounts for which payment is determined pursuant to Schedule C, for the periods following such modification, by the amount of Deferred Rent (recomputed as determined below) unpaid with respect to each period following the period in which such modifications are made; (ii) each Rent Payment payable on and after the first Payment Date occurring six months or proceedings relating more after the final payment to any Lessee for such proceedswork shall be reduced by an amount determined by multiplying each subsequent Rent Payment by a fraction, causes the numerator of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of actionwhich shall be the amount so retained, and to settle or compromise any claim or cause the denominator of action which shall be an amount determined by subtracting from the Basic Amount (as defined in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationSchedule C) all amounts theretofore retained by Lessor; provided, however, that so long as no Event the reduction of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess each Rent Payment from year sixteen through year twenty-five of the lesser of (i) ten percent (10%) Primary Term shall be calculated by multiplying the. final Rent Payment payable in year fifteen of the then outstanding principal balance Primary Term by the fraction referred to in this clause (ii); (iii) Fixed Rent thereafter accruing (m) during the Primary Term of this Lease shall equal the aggregate of Rent Payments payable during the remainder of the Note Primary Term (as reduced as described above) minus the amount of Deferred Rent as of the date of. reduction, all divided by the number of semi-annual rental periods (including fractions thereof) thereafter remaining during the Primary Term of this Lease and (n) during each Extended Term of this Lease, if any, shall equal the Rent Payment (as reduced as described above) payable for each rental period during such Extended Term; and (iv) notwithstanding anything to the contrary contained in this paragraph; (a) the Fixed Rent and Rent Payments per square foot of the Improvements after the reductions provided for in clauses (ii) $500,000.00. Except as provided in and (iii) of this paragraph 11(c) shall not be less than the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring respective Fixed Rent and repairing the Property to the equivalent of its condition immediately Rent Payments per square foot prior to such reduction for each rental period; and, if this clause (iv) results in an adjustment to Fixed Rent, then (b) the casualty or, Rent Payments. thereafter payable during the Primary Term (after the adjustments provided for in clauses (ii) and (iii) and this clause (iv)) shall each be increased by an equal amount so that the case aggregate Rent Payments thereafter payable shall equal the sum of condemnation, to a condition approved by Lender Fixed Rent thereafter accruing (after the “Restoration”adjustments provided for in clauses (ii) and (iii) and this clause (iv) of this. paragraph 11(c), and require Borrower to restore ) during the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment remainder of the Obligations, whether or not then due. To Primary Term of this Lease plus the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, amount of Deferred Rent as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all date of the following conditions are met: (1) no Default or Event reduction. For purposes of Default has occurred determining the Fixed Rent and is continuing; (2) in Rent Payments per square foot of the case of casualtyImprovements, less than forty percent (40%) the initial square footage of the Improvements have been damaged, or in shall be the case number of a taking, less than twentysquare feet thereof reflected on the most recent as-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, built survey obtained by means of a deposit of any shortfall by Borrower with Lender Lessor prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that Primary Term. In the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application event of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andtemporary requisition, in any event, the unpaid portion of the Obligations this Lease shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Lessee shall be applied first entitled to receive the Net Proceeds allocable to such temporary requisition; except that. such portion of the Net Proceeds allocable to the final payment due under period after the Note and thereafter expiration or termination of the term of this Lease shall be paid to installments due under the Note in the inverse order of their due dateLessor. If Borrower elects the cost of any repairs required to effect a Restorationbe made by Lessee pursuant to this paragraph 11(c) shall exceed the amount of the Net Proceeds, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, deficiency shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested paid by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforLessee.
Appears in 1 contract
Condemnation and Casualty. Borrower (a) Grantor shall give Lender prompt written notice of any Condemnation (as defined in the occurrence of any casualty Loan Agreement) and/or Casualty (other than a de minimus casualtyas defined in the Loan Agreement) affecting, or occurring to the institution of any proceedings for eminent domain or for the condemnation of, the Mortgaged Property or any portion thereof. All insurance proceeds on the Property, Grantor’s rights and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating obligations with regard to any such proceedsCondemnation and/or Casualty (including, causes but not limited to, with regard the disposition of actionany proceeds resulting therefrom) shall be governed by (i) Section 13 and Section 14 of the Loan Agreement, claims, compensation, awards or recoveries which are both hereby incorporated herein and made a material part hereof by this reference as if such provisions were set forth herein in their entirety and (ii) this Section 15 of this Deed of Trust (to the extent not inconsistent with Section 13 and Section 14 of the Loan Agreement).
(b) If prior to the receipt of the proceeds by Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause the Mortgaged Property shall have been sold on foreclosure of action, and to settle or compromise any claim or cause this Deed of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuingTrust, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive the proceeds with respect to, any loss which is not in excess of to the lesser of extent of:
(i) ten percent (10%) of any deficiency found to be due to Lender in connection with the then outstanding principal balance of the Note and foreclosure sale, with legal interest thereon, and
(ii) $500,000.00. Except as provided counsel fees, costs and disbursements incurred by Lender in connection with collection of the foregoing sentence, Lender may, at Lender’s option, proceeds and the proceedings to establish the deficiency.
(yc) hold If the balance amount of any the initial award of such proceeds to be used to reimburse Borrower damages for the cost of restoring condemnation is insufficient to pay in full the indebtedness secured hereby with interest and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restorationother appropriate charges, Lender shall do so have the right to prosecute to final determination or settlement an appeal or other appropriate proceedings in accordance with Lender’s thenthe name of Lender or Grantor, for which Lender is hereby appointed irrevocably as attorney-current policies relating in-fact for Grantor, which appointment, being for security, is irrevocable. In that event, the expenses of the proceedings, including counsel fees, shall be paid first out of the proceeds and only the excess, if any, paid to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option be credited against the amounts due under this Deed of Trust.
(d) Nothing herein shall limit the rights otherwise available to apply insurance proceeds Lender, at law or in equity, including the right to intervene as a party to any condemnation proceeding.
(e) No application of condemnation proceeds to the payment of the Obligations if all Debt shall postpone any of the following conditions are met: (1) no Default current installments of principal or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment interest becoming due under the Note and thereafter to installments due under until the Note Debt is paid in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.full
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Condemnation and Casualty. Borrower shall give Lender prompt written notice of i. If, prior to the occurrence of any casualty (other than a de minimus casualty) affectingClosing Date, or the institution of any proceedings for eminent domain or for the condemnation of, the Property all or any portion thereof. All insurance proceeds on of any or all of the PropertyReal Property are permanently taken or rendered unusable for its current purpose by eminent domain, and is the subject of a pending taking which has not been consummated, or if Seller or any Affiliate thereof shall receive a written notice from any Governmental Authority having eminent domain power over all causes or any portion of actionthe Real Property of its intention to take, claimsby eminent domain proceeding, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property any or for any damage or injury to it for any loss or diminution in value all of the PropertyReal Property (a “Condemnation”), are hereby assigned or is destroyed or damaged by fire or other casualty (a “Casualty”), then Seller shall provide written notice thereof to and the Purchasers promptly after Seller first obtains Knowledge thereof, which written notice shall be paid accompanied by a written estimate prepared by an independent architect reasonably selected by Seller and reasonably acceptable to Lenderthe Purchasers of the cost to restore the Real Property to the condition immediately prior to such Casualty or Condemnation and the time it will take to complete such restoration. Lender may participate in any suits If such Condemnation or proceedings relating Casualty is a Covered Event (as such term is hereinafter defined), the Purchasers shall have the option to any such proceedsterminate this Agreement upon notice to Seller given not later than fifteen (15) Business Days after receipt of Seller’s notice, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationTIME BEING OF THE ESSENCE; provided, however, that so long Seller may override any such election to terminate this Agreement by the Purchasers as a result of a Casualty, if, no Event later than fifteen (15) Business Days after any such election to terminate is delivered by the Purchasers to Seller, Seller (i) notifies the Purchasers that Seller intends to cause Seller or Acquired Companies, as applicable, to repair such damage on or prior to the Outside Closing Date, and (ii) provides, together with such notice, a statement from an independent architect reasonably selected by Seller and reasonably acceptable to the Purchasers that substantial completion of Default is continuing, Lender the restoration or repair arising from such condemnation or casualty can with reasonable diligence be achieved by the Outside Closing Date (an “Override Election”); provided that Seller shall not participate be entitled to deliver an Override Election with respect to (x) any Condemnation or (y) any Casualty if the aggregate cost to fully restore the damage from such Casualty to the condition of the Real Property immediately prior to such Casualty (the “Prior Condition”), as determined by an independent architect reasonably selected by Seller and reasonably acceptable to the Purchasers, is estimated to exceed five hundred million dollars ($500,000,000).
ii. No notice given pursuant to the first sentence of this Section 13(a) shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any term or condition contained herein or the adjustment ofparties’ rights to indemnification hereunder.
iii. The Purchasers’ failure to give notice to terminate this Agreement pursuant to this Section 13(a) shall not, in and Borrower of itself, have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any term or condition contained herein or the Purchasers’ Losses or right to indemnification hereunder and shall not constitute or be deemed to constitute a release or waiver of any kind or character.
iv. If this Agreement is terminated by the Purchasers pursuant to this Section 13(a), neither Seller nor any Purchaser shall have any further rights or obligations to the other hereunder except as set forth herein; provided that each of the OpCo Confidentiality Agreement and the PropCo Confidentiality Agreement shall survive any termination of this Agreement in accordance with its respective terms. Until the Purchasers terminate this Agreement pursuant to this Section 13(a) in connection with a Condemnation or Casualty that is a Covered Event, Seller shall not have the right to directly receive proceeds with respect to, settle any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, claims related to a condition approved by Lender (Condemnation or Casualty without the “Restoration”)Purchasers’ written consent, and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender which consent shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: be unreasonably withheld (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or except in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determinesCondemnation or Casualty that is a Covered Event, in its which case the Purchasers may withhold their consent in their sole and absolute discretion). Seller shall cooperate with the Purchasers to sign all required proofs of loss, that there will be sufficient funds to complete the Restoration (including, without limitation, by means assignments of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs claims and other expensessimilar items with regard to a Condemnation or Casualty.
v. Subject to Section 13(a)(vi), deposits if this Agreement is not terminated pursuant to the Impound Accountthis Section 13(a), deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that either (A) at Purchasers’ option, Seller shall and shall be obligated to cause the Restoration will be completed before Real Estate Sellers or the earlier Acquired Companies, as applicable, without incurring any Liens (other than Permitted Liens), to promptly commence to restore and repair the damage or destruction resulting from the Casualty in question to the Prior Condition, and to diligently pursue such restoration and repair, in a good and workerlike manner and in compliance with applicable Law and Contracts using new materials, the quality of (i) one year before the Maturity Date which is not less than that of the Note affected Real Property immediately prior to such Casualty and using duly licensed, reputable and financially solvent third-party architects, engineers and contractors, and pursuant to plans and specifications, in each case, reasonably acceptable to the Purchasers, and the Purchasers shall have the right from time to time (but not more than once per month) during the restoration of such Casualty to inspect the improvements to confirm Seller’s compliance with this Section 13(a)(v), or (ii) one year after the date of the loss or casualty and (B) unless Purchasers elect for Seller to restore and repair the rent loss insurance damage or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under destruction resulting from the Loan during the completion Casualty pursuant to clause (A), neither Seller nor any of the Restoration; Real Estate Sellers or the Acquired Companies shall repair any damage or destruction or incur any cost or obligation with respect to such repair (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance other than protective repairs required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of preserve and secure the aforesaid insurance or condemnation claim of its request to undertake a Restoration; Real Property and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may beprotect Persons from injury). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums Unless Seller makes an Override Election and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation awardaward are applied toward the cost of restoration and repair, Seller shall and/or shall cause any of the Real Estate Sellers or the Acquired Companies, as appropriateapplicable, to retain until the Closing Date all of the insurance proceeds paid with respect to such Casualty or condemnation award (less amounts applied by Seller or any of the Real Estate Sellers or Acquired Companies, as applicable, toward such repair or restoration or protective repairs in accordance with the immediately preceding sentence and reasonable collection costs associated therewith), including any rent abatement insurance accruing after the Closing for such Casualty or Condemnation, and assign any claims in respect of any such insurance proceeds or condemnation award and the related insurance policies shall be sufficient assigned to the Purchasers (or their designee). In each instance, whether or not the restoration and repair under clause (B) is completed by the Closing Date, the parties shall proceed to the Closing pursuant to the terms hereof without abatement of the OpCo Transaction Consideration (except for a credit against the purposeOpCo Transaction Consideration in the amount of the applicable deductible under the Insurance Policies of any of the Real Estate Sellers or Acquired Companies, restoreas applicable).
vi. If this Agreement is not terminated pursuant to this Section 13(a), repairand Seller shall have delivered an Override Election pursuant to Section 13(a)(i), replace Seller shall and rebuild shall be obligated to cause the Real Estate Sellers or the Acquired Companies, as applicable, on or before the Outside Closing Date, without incurring any Liens (other than Permitted Liens), to restore and repair the damage or destruction resulting from the Casualty in question to the Prior Condition, in a good and workerlike manner and in compliance with applicable Law and Contracts using new materials, the quality of which is not less than that of the affected Real Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking Casualty and using duly licensed, reputable and financially solvent third-party architects, engineers and contractors, and pursuant to plans and specifications, in accordance with each case, reasonably acceptable to the foregoing provisions and Borrower Purchasers. The Purchasers shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided have the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver right from time to time (but not more than once per month) during the restoration of such further instruments as may be requested by Lender Casualty to inspect the improvements to confirm Seller’s compliance with this Section 13(a)(vi). Upon Seller’s compliance with this Section 13(a)(vi), the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject parties shall proceed to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject Closing pursuant to the terms hereof without abatement of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforOpCo Transaction Consideration.
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Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) In the event of any condemnation or casualty of any Property in part or in the entirety, the proceeds of such condemnation or casualty, to the extent not retained or otherwise applied by the holder of any mortgage securing Senior Debt on such Property or by the holder of the occurrence of Construction Loan, applied as required pursuant to any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, Major Lease approved by Vornado at the Property or applied by such mortgagee or in accordance with such Major Lease either to restore the improvements on such Property or to reduce such Senior Debt or the Construction Loan, as applicable, applied as required pursuant to any portion thereof. All condominium declaration and/or related by-laws affecting any Property that has previously been approved by Vornado to restore the improvements on such Property or applied in accordance with the Other Vornado Loan Documents, shall be immediately deposited by Borrower in a cash collateral account to be maintained by Alexander's at a depository designated by Vornado and under the sole dominion and control of Vornado (the "Cash Collateral Account") pursuant to a cash collateral agreement to be entered into between Alexander's, Vornado and such Depository (the "Cash Collateral Agreement"); (such proceeds of condemnation so deposited being herein called "Condemnation Proceeds"; such proceeds of casualty so deposited being herein called "Casualty Proceeds"; and Condemnation Proceeds and/or Casualty Proceeds being herein called "Proceeds") and shall constitute additional collateral for the Reimbursement Obligations.
(b) Provided that no Default or Event of Default shall have occurred and be continuing, Alexander's shall be entitled to withdraw any Condemnation Proceeds from the Cash Collateral Account for the purpose of acquiring additional real estate assets with the consent of Vornado, which consent shall not be unreasonably withheld, provided that, subject to the Senior Loan Documents, the Loan Agreements and the Other Vornado Loan Documents, (i) Borrower shall have delivered to Lender an appraisal for such real estate (x) for an amount at least equal to the amount of the Condemnation Proceeds sought to be withdrawn by Alexander's to purchase such real estate and (y) issued by an appraisal company and in form and substance reasonably satisfactory to Vornado; (ii) Alexander's shall have delivered to Vornado environmental, engineering and such other studies, reports, documents, title reports, violation searches and other information relating to such real estate as would be generally required by Vornado in accordance with good institutional lending practices, all of which studies, reports, documents and other information shall be in form and substance reasonably satisfactory to Vornado; (iii) Vornado shall be granted a priority lien mortgage on said real estate to further secure the Reimbursement Obligations (the "Additional Mortgage"); (iv) Alexander's shall have delivered to Vornado a paid-up mortgage title insurance proceeds policy in favor of Vornado, insuring the Additional Mortgage as a second priority mortgage, subject only to the lien of the Senior Loans, on such real estate, subject to no encumbrances or other title exceptions except those title exceptions which Vornado reasonably determines are acceptable based on good institutional lending practices; and (v) Alexander's shall have paid all reasonable costs and expenses of Vornado (including reasonable attorneys' fees and expenses) incurred by Vornado in connection with the review of any of the foregoing conditions.
(c) Alexander's shall also have the right to withdraw the Condemnation Proceeds remaining in the Cash Collateral Account to pay for the cost of constructing improvements on any Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower Alexander's shall have the right to directly receive proceeds with respect towithdraw any Casualty Proceeds in the Cash Collateral Account to pay for the repair and restoration of improvements whose damage or destruction generated such Casualty Proceeds, provided that, in all cases, subject to the Senior Loan Documents, the Loan Agreements, any loss which is not in excess of condominium declaration and/or related by-laws affecting such Property that has previously been approved by Vornado, and the lesser of Other Vornado Loan Documents: (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is shall be continuing; (2ii) Vornado shall have approved the plans and specifications for the construction of such improvements as well as the general contract and other major contracts to be entered into by Alexander's in connection with such construction, which approval will not unreasonably be withheld; (iii) Vornado shall have received such certification and assurances as Vornado shall reasonably request to assure it that the case cost of casualty, less than forty percent (40%) constructing the improvements as shown on the plans approved by Vornado does not exceed the amount of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been takenProceeds sought to be withdrawn by Alexander's to pay for such improvements; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (Biv) Vornado may impose such further conditions and restrictions upon the rent loss insurance disbursement of such Proceeds as Vornado deems necessary or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during desirable, consistent with prudent institutional construction lending practices, to assure the completion of the Restoration; proposed improvements subject to no liens or encumbrances (6except Permitted Liens) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions aforesaid approved plans and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforapplicable laws.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice of If, prior to the occurrence of any casualty (other than a de minimus casualty) affectingClosing Date, or the institution of any proceedings for eminent domain or for the condemnation of, the Property all or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, Property is taken by condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lendereminent domain, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been is the subject of a partial condemnationpending taking which has not been consummated, or is destroyed or damaged by fire or other casualty, Transferors shall notify Transferee of such fact promptly after Transferors obtain knowledge thereof. Lender If such condemnation or casualty is “Material” (as hereinafter defined), Transferee shall not exercise its have the option to apply insurance proceeds or condemnation proceeds terminate this Agreement as to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) Membership Interests in the case of casualtyProperty Owner that owns the affected Property, less upon notice to Transferors given not later than forty percent fifteen (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (515) days after settlement receipt of Transferors’ notice, or the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) Closing Date, whichever is earlier. Notwithstanding the Principal Lease is in full force and effectforegoing, the tenant under the Principal Lease does Transferee shall not have the right to terminate this Agreement with respect to any Membership Interests in a Property Owner that owns a Property encumbered by the Principal Assumed Loan unless the Assumed Lender approves the release of the applicable Property from the Assumed Loan Documents. Transferee may elect to extend the Closing Date up to thirty (30) days by written notice to Transferors in order to obtain approval for such partial release. If this Agreement is terminated as to Membership Interests in a Property Owner that owns a particular Property, the Closing as to the balance of the Properties shall continue as provided in this Agreement (the Acquisition Consideration to be reduced by the amount allocated to the terminated Property as set forth in Exhibit B attached hereto and the Master Lease due to be modified to reflect the elimination of such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived Property.) If this Agreement is not terminated with respect to any right to terminate the Principal Lease particular Property as a result of such casualty condemnation or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andcasualty, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower Transferors shall not be excused in obligated to repair any damage or destruction but (x) Transferors shall assign or cause to be assigned, without recourse, and turn over to Transferee, subject to all rights and requirements of the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due Assumption Lender under the Note and thereafter to installments due under the Note in the inverse order Assumed Loan Documents, all of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation awardproceeds, as appropriateapplicable, shall be sufficient net of any costs of repairs and net of reasonable collection costs (or, if such have not been awarded, all of their right, title and interest therein) payable with respect to such fire or other casualty or condemnation, including any rent loss insurance for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject condemnation applicable to the preceding provisions of this Section 1.7period after Closing, Lender is hereby irrevocably constituted if transferable, and appointed (y) the attorney-in-fact of Borrower (which power of attorney parties shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent proceed to the date hereof), with full power of substitution, subject Closing pursuant to the terms hereof without abatement of this section, the Acquisition Consideration except for a credit in the amount of the applicable insurance deductible and an amount equal to settle for, collect and receive any such awards, damages, rent loss insurance proceeds, payments or other compensation from the parties or authorities making the same, payable to appear in and prosecute any proceedings therefor and Transferors that can not be transferred to give receipts and acquittances thereforTransferee.
Appears in 1 contract
Samples: Contribution Agreement (Education Realty Trust, Inc.)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Tenant hereby assigns to Landlord any award, compensation, insurance proceeds or other payment to which Tenant may become entitled by reason of its interest in the Leased Property, other than any award, compensation or insurance payment made to Tenant for interruption of business, for moving expenses or for any inventory, fixtures, machinery, equipment or other personal property belonging to Tenant, (hereinafter referred to as "Tenant's Loss") (i) if the Leased Property, or any portion thereof, is damaged or destroyed by fire or other casualty or cause, or (ii) by reason of any condemnation, requisition or other taking or sale of the occurrence of any casualty (other than a de minimus casualty) affectinguse, occupancy or title to the institution of any proceedings for eminent domain or for the condemnation of, the Leased Property or any portion thereofthereof in, by or on account of any actual or threatened eminent domain proceeding or other action by any governmental authority or other person having the power of eminent domain. Subject to the consent of Landlord, which consent shall not be unreasonably withheld, Tenant is hereby authorized and empowered, at its cost and expense, in the name and behalf of Landlord, Tenant or otherwise, to appear in any such proceeding or other action, to negotiate, accept and prosecute any claim for any award, compensation, insurance proceeds or other payment on account of any such loss, damage, destruction, condemnation, requisition or other taking or sale, and to cause any such award, compensation, insurance proceeds or other payment to be paid to Landlord, except that Tenant shall be entitled to submit a claim for Tenant's Loss and retain any award applicable thereto. All insurance proceeds on amounts so paid or payable to Landlord or Tenant shall be retained or paid over to the party entitled thereto in accordance with the provisions of this Article 12. Tenant shall take all appropriate action in connection with each such claim, proceeding or other action, and shall pay all costs and expenses in connection therewith. Notwithstanding the foregoing, Landlord may participate in all such proceedings in all respects.
(b) If any one or more of the Parcels or any part thereof shall be damaged or destroyed by fire or other casualty, and Tenant may not or does not elect to terminate the Lease with respect to all or a portion of said Parcel(s) pursuant to paragraph (c) of this Article 12, then Tenant shall give prompt written notice thereof to Landlord, and shall, at Tenant's own cost and expense and in conformity with the requirements set forth in paragraph (a) of Article 11 hereof, proceed with reasonable diligence and promptness to carry out any necessary demolition and to restore, repair, replace, and/or rebuild the Parcel(s) in order to restore the Parcel(s), as nearly as practicable, to the condition and fair market value thereof immediately prior to such damage or destruction. Basic and Additional Rent shall not abate hereunder by reason of any such damage to or destruction of the Xxxxed Property, and Tenant shall continue to perform and fulfill all causes of actionTenant's obligations, claims, compensation, awards covenants and recoveries for any damage, condemnation or taking of all or any part of the Property or for any agreements hereunder notwithstanding such damage or injury to it for any loss or diminution destruction. If the Net Award (as defined in value paragraph (c) of this Article 12) does not exceed $250,000 and provided Tenant is not in default under this Lease, then the Property, are hereby assigned to and Net Award shall be paid to LenderTenant to be applied to the repair and rebuilding work required by this paragraph (b). Lender If the Net Award exceeds $50,000, the proceeds shall be disbursed in accordance with clauses (i)-(iii) of paragraph (d) of this Article 12.
(c) If, at any time during the Term of this Lease all or substantially all of any one or more of the Parcels shall be condemned or taken in the exercise of the power of eminent domain by any sovereign, municipality, or other public or private authority or shall be destroyed by fire or other casualty or, after any condemnation, taking or casualty of a Parcel(s), if the Parcel(s) is unsuitable for continued use in Tenant's business, or if any condemnation, taking or casualty of any portion of the Parcel(s) shall take place during the last two years of the Basic Term hereof or during the last two years of any Extended Term, then Tenant may participate in any suits give notice to Landlord of Tenant's intention to terminate this Lease with respect to such Parcel(s). Substantially all of a Parcel shall be deemed to have been taken if the remaining portion of the Parcel shall not be of sufficient size or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required character to permit the operation by Tenant of its business thereon and therein on an economically feasible basis, assuming that such participation; provided, however, that so long as no Event remaining portion had been repaired and restored to the fullest extent possible. If Landlord and Tenant do not agree on whether all or substantially all of Default is continuing, Lender shall not participate in the adjustment of, and Borrower a Parcel shall have the right been taken or destroyed then their dispute shall be settled by arbitration in accordance with Article 33 hereof. Tenant shall give notice to directly receive proceeds Landlord of Tenant's intention to terminate this Lease with respect to, any loss which is to a Parcel not in excess later than 180 days after the occurrence of the lesser of such condemnation or casualty. Tenant's notice to Landlord shall (i) ten percent (10%) contain a description of the then outstanding principal balance of the Note and relevant condemnation, taking or casualty, (ii) $500,000.00. Except specify the date on which this Lease shall terminate with respect to such Parcel, which shall be the Installment Payment Date first occurring at least 180 days after such notice is given (the "Termination Date"), (iii) if such notice of termination shall be based on a determination by Landlord and Tenant that a Parcel is no longer suitable for use in Tenant's business as provided aforesaid, contain a certification by Tenant that the Board of Directors of Tenant has made such determination, and that, on or before such Termination Date, Tenant will discontinue the use of the Parcel in Tenant's ordinary course of business, (iv) if such Termination Date shall occur during the Basic Term, contain the irrevocable offer of Tenant to purchase Landlord's interest in the foregoing sentenceParcel (and the Net Award hereinafter referred to), Lender may, on such Termination Date at Lender’s option, the Termination Value with respect to such Parcel (y) hold defined as the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property amount corresponding to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”applicable Termination Date on Schedule C annexed hereto), and require Borrower (v) contain a commitment by Tenant to restore the Property to the equivalent of its original condition or to deposit with a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or Depository not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less later than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss condemnation or casualty as security for payment of the purchase price for the Parcel the applicable Termination Value with respect to such Parcel less the amount of any insurance proceeds or condemnation award previously paid with respect to such casualty or taking and held by Landlord or Landlord's designee pursuant to paragraph (Ba) of this Article 12. If Landlord shall reject any such offer to purchase by notice given to Tenant not later than 10 days prior to such Termination Date, or if such Termination Date shall occur during an Extended Term, then this Lease shall terminate on such Termination Date with respect to such Parcel and the rent loss insurance or business interruption insurance referenced Net Award shall be paid and belong to Landlord. Unless Landlord shall reject such offer to purchase as provided in Section 1.4(fthe preceding sentence, Landlord shall be conclusively deemed to have accepted such offer, and on such Termination Date Landlord shall transfer, and Tenant shall purchase, Landlord's interest in the Parcel (and the Net Award) above will cover all payments due under in accordance with the Loan during the provisions of Article 16 hereof. Upon completion of the Restoration; (6) upon Lender’s requestsuch purchase, Borrower provides Lender evidence and payment of the availability during Termination Value by Tenant, the entire award, compensation or other payment, if any, on account of any such taking or casualty, less any expenses incurred by Landlord in -19- collecting such award, compensation, insurance proceeds or other payment and after not paid (or reimbursed to Landlord) by Tenant pursuant to the Restoration last sentence of paragraph (a) of Article 12, shall be paid and belong to Tenant (such award, compensation, insurance proceeds or other payment, less such expenses, being herein called the insurance "Net Award"). The additional amount, if any, deposited by Tenant pursuant to clause (v) of paragraph (c) of this Article 12 shall be paid to Tenant on the Termination Date if Tenant is not in default under this Lease.
(d) If Tenant shall not give, and shall not be required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written give, notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request intention to undertake terminate this Lease with respect to a Restoration; and Parcel in accordance with paragraph (8) the Principal c) of this Article 12, then this Lease is shall continue in full force and effect, and Tenant shall, at its own cost and expense and in conformity with all of the tenant under requirements of paragraph (a) of Article 11 hereof, repair and rebuild the Principal Lease does not have Parcel to the right extent necessary to terminate restore the Principal Lease due Parcel as nearly as practicable to the condition and fair market value thereof immediately prior to such casualty taking. Tenant shall commence such repair and rebuilding promptly after such taking, and shall thereafter proceed with due diligence to complete such repair and rebuilding. Provided Tenant is not in default under this Lease, if the Net Award shall not exceed $250,000 then such Net Award shall be paid to Tenant to be applied to the repair and rebuilding work required by this paragraph (d). If the Net Award shall exceed $250,000, or taking if Tenant is in default under this Lease, then:
(i) the full amount thereof shall be paid to a depositary (the "Depositary") to be selected as hereinafter provided. The Depositary shall be a bank or trust company selected by Landlord which is authorized to do business in the case may bestate in which the Parcel is located, and which has a net worth of $100,000,000 or more. The Depositary shall have no affirmative obligation to prosecute a determination of the amount of, or to effect the collection of, any insurance proceeds or condemnation award or awards, unless the Depositary shall have given an express written undertaking to do so. Moneys received by the Depositary pursuant to the provisions of this Lease shall not be mingled with the Depositary's own funds and shall be held by the Depositary in trust separately for the uses and purposes provided in this Lease. The Depositary shall place any moneys held by it into an interest bearing account; any interest paid or received by the Depositary on the moneys so held in trust shall be added to the moneys so held in trust by the Depositary. In disbursing monies pursuant to clause (ii) of this paragraph (d), or the tenant under Depositary may rely conclusively on the Principal Lease affirms information contained in any notice given to the Depositary by Tenant in accordance with the provisions of said clause (ii), unless Landlord shall notify the Depositary in writing within five (5) days after the giving of any such notice that it has waived Landlord intends to dispute such information, in which case the disputed amount shall not be disbursed but shall continue to be held by the Depositary until such dispute shall have been resolved.
(ii) From time to time, but not more often than once in any right 30-day period, Tenant may request reimbursement out of the Net Award for the actual costs and expenses incurred by Tenant in connection with such repair and rebuilding. Such requests shall be made by written notice to terminate the Principal Lease as Depositary, with a result copy to Landlord, setting forth in reasonable detail all of such casualty or taking (as costs and expenses incurred by Tenant. The Depositary shall promptly disburse to Tenant out of the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change Net Award the amount of such installmentscosts and expenses. Borrower agrees If Landlord shall in good faith desire to execute dispute the information contained in any notice given by Tenant pursuant to this clause (ii), Landlord shall so notify Tenant and the Depositary in writing within five (5) business days after the giving of such further evidence notice, specifying the amount intended to be disputed and the nature of assignment the dispute.
(iii) Upon the completion of such repair and rebuilding, any awards or proceeds remaining Net Award shall be paid to and belong to Landlord, and each payment of Basic Rent payable during the remaining Basic Term to occur following the payment of such remaining Net Award to Landlord shall be reduced by an amount so as Lender may require. Any reduction to preserve Landlord's Yield; provided that in no event will Basic Rent be reduced to an amount which is less than the debt service payable with respect to any mortgage of Landlord's interest in the Obligations resulting from Lender’s application of Leased Property.
(e) Notwithstanding any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums other provision to the Obligations andcontrary contained in this Article 12, in any eventthe event of a temporary condemnation, the unpaid portion of the Obligations this Lease shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Tenant shall be applied first entitled to the final payment due under Net Award allowable to such temporary condemnation; except that such portion of the Note and thereafter Net Award allocable to installments due under the Note in time period after the inverse order expiration or termination of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless the Term of whether the insurance proceeds or condemnation award, as appropriate, this Lease shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible paid to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.Landlord
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice If, prior to the Closing Date, all or any portion of the occurrence Property is taken by condemnation or eminent domain, or is the subject of any a pending taking which has not been consummated, or is destroyed or damaged by fire or other casualty, Seller shall notify Purchaser of such fact promptly after Seller obtains knowledge thereof. If such condemnation or casualty is "Material" (other as hereinafter defined), Purchaser shall have the option to terminate this Agreement upon notice to Seller given not later than a de minimus casualtyfifteen (15) affectingdays after receipt of Seller's notice, or the institution of any proceedings for eminent domain or for the condemnation ofClosing Date, whichever is earlier. If this Agreement is terminated, the Property Deposit shall be returned to Purchaser and thereafter neither Seller nor Purchaser shall have any further rights or any portion thereofobligations to the other hereunder except with respect to the Surviving Termination Obligations. All insurance proceeds on the PropertyIf this Agreement is not terminated, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for Seller shall not be obligated to repair any damage or injury destruction but (x) Seller shall assign and turn over to it for any loss or diminution in value Purchaser all of the Property, are hereby assigned to insurance proceeds (and shall be paid to Lender. Lender may participate in any suits credit Purchaser with the full amount of Seller's insurance deductible, if any, as set forth below) or proceedings relating to any such condemnation proceeds, causes as applicable, net of actionany costs of repairs and net of reasonable collection costs other than attorneys' fees (or, claimsif such have not been awarded, compensationall of its right, awards or recoveries title and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds interest therein) payable with respect to, to such fire or other casualty or condemnation including any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note rent abatement insurance for such casualty or condemnation and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance parties shall proceed to Closing pursuant to the terms hereof without abatement of the Purchase Price except for a credit in the amount of the applicable insurance deductible. Seller hereby covenants and agrees that after the end of the Feasibility Period if Purchaser has elected to proceed to Closing and has waived its right to terminate this Agreement pursuant to Section 5.5, Seller shall be required to obtain Purchaser's prior approval of the settlement of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating repairs to the Property resulting from a casualty or condemnation, such approval not to be unreasonably withheld, conditioned or delayed and that the debt service coverage ratio which shall be deemed granted if Purchaser fails to respond to a request for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; approval within five (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date business days after receipt of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Brandywine Realty Trust)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) If at any time during the term of this Lease Agreement title and possession of the occurrence Development Land and/or the Development 50 Improvements, or a substantial portion of any casualty (the Development Land and/or Development Improvements, are acquired under the power of eminent domain by a public authority, other than a de minimus casualty) affectingthe Landlord, or the institution Tenant and the Landlord shall place with the Depository their respective shares of any proceedings for eminent domain or for the condemnation of, award or condemnation awards which shall be distributed in the Property or any portion thereof. All insurance proceeds on the Propertyfollowing manner, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess following order of the lesser of priority:
(i) ten First, to the CDA for principal and interest due under the CDA Loan in such amounts as are then, or otherwise would be, payable thereunder as and to the extent all payments due thereunder have, or had, been paid to the date of taking;
(ii) second, to other Leasehold Mortgagees, if any, for principal and interest due under any notes secured thereby to the date of such taking as and to the extent that (x) the original principal balance of any such note did not exceed eighty percent (1080%) of the then outstanding principal balance fair market value of the Note and (ii) $500,000.00. Except as provided Tenants' unencumbered interests in the foregoing sentenceDemised Premises and Development Improvements upon execution of said note or any amendments thereto (or upon the increase of principal due thereunder), Lender may, at Lender’s option, and (y) hold any principal and interest due under said note was fully amortized in equal monthly installments over the balance life of the same;
(iii) Third, to the Landlord for any payments due to the Landlord from the Tenant under the provisions of this Lease Agreement to the date of such proceeds taking; and
(iv) The balance, if any, to be used the Tenant and the Landlord in the same ratio as the then "fair market value" of Tenant's interests in the Development Improvements and the Demised Premises so taken bears to reimburse Borrower the then "fair market value" of the Landlord's interest in such property, recognizing that the Tenant has borne the entire cost of the Development Improvements and the acquisition of the Conrail Parcel but also that the Landlord bore the entire cost of the acquisition of the HRA Parcel and that Tenant had the use of the Demised Premises free of rent and real estate taxes other than for the cost Rent due hereunder.
(b) For the purposes of restoring Subsection (a) and repairing Section 1502 the Property term "substantial portion" shall mean that immediately after the taking the remaining Development Land and/or the Development Improvements are not reasonably usable by the Tenant in Tenant's reasonable judgment for the same purposes that the Tenant was using (or intending to use) the equivalent of its condition same immediately prior to such taking and the casualty or, in Tenant elects to terminate this Lease agreement on notice given the case Landlord not more than ninety (90) days after the taking. A taking of condemnation, to any portion of any building constructed upon the Demised Premises or a condition approved by Lender (taking which reduces the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment seating capacity of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines Project to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent 27,000 shall be deemed a substantial portion for purposes of this Article.
(40%c) For purposes of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent Subsection (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (Aa) the Restoration will be completed before the earlier of term "fair market value" shall mean either (i) one year before the Maturity Date of fair market value ascribed to the Note Development Land and the Development Improvements by the acquiring agency, or (ii) one year after if the date condemnation award is appealed, the judicially determined fair market value of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided parties' interests in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums Development Land and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable Development Improvements so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefortaken.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Tenant hereby assigns to Landlord any award, compensation, insurance proceeds or other payment (including any self insurance amounts) to which Tenant may become entitled by reason of its interest in the Leased Property, other than any award, compensation or insurance payment made for any inventory, machinery, equipment or other personal property belonging to Tenant, including, without limitation, Tenant’s Equipment (hereinafter referred to as “Tenant’s Loss”) by reason of (i) damage to or destruction of the occurrence Leased Property by fire or other taking or sale of any casualty (other than a de minimus casualty) affectingthe use, occupancy or title to the institution of any proceedings for eminent domain or for the condemnation of, the Leased Property or any portion thereofthereof in by or on account of any actual or threatened eminent domain proceeding or other action by any governmental authority or other person having the power of eminent domain (a “condemnation”). All insurance proceeds Tenant is hereby authorized and empowered, at its cost and expense, in the name and on the Propertybehalf of Landlord, and all causes of Tenant or otherwise, to appear in any such proceeding or other action, claimsto negotiate, accept and prosecute any claim for any award, compensation, awards insurance proceeds or other payment on account of any such casualty or condemnation, and recoveries for to cause any damagesuch award, condemnation compensation, insurance proceeds or taking of all or any part of the Property or for any damage or injury other payment to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to LenderLandlord, except that Tenant shall be entitled to submit a separate claim for Tenant’s Loss and receive and retain any award applicable thereto. Lender may participate All amounts so paid or payable to Landlord or Tenant shall be retained or paid over to the party entitled thereto in any suits or proceedings relating to any such proceeds, causes accordance with the provisions of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of this Article 13. Tenant shall take all appropriate action in connection therewithwith each such claim, proceeding(s), and Borrower Tenant shall from time to time deliver to Lender any all instruments required reasonably requested by Landlord or Landlord’s mortgagee to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not pay all costs and expenses in excess connection therewith.
(b) If less than substantially all of the lesser of Leased Property shall be damaged or destroyed by casualty, or condemned, then Tenant shall give prompt written notice thereof to Landlord, and this Lease shall continue in full force and effect and Tenant shall proceed at Tenant’s own cost and expense and in conformity with the requirements set forth in paragraph (i) ten percent (10%a) of Article 12 hereof with reasonable diligence and promptness to carry out any necessary demolition and to restore, repair, re place, and/or rebuild the then outstanding principal balance of Leased Property in order to restore the Note Leased Property, as nearly as practicable, to substantially the same condition, design and (ii) $500,000.00. Except construction as provided in that which existed immediately prior to such casualty or condemnation or, if the foregoing sentenceLeased Property is restored to a different condition design or construction than that which existed immediately prior to such casualty or condemnation, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to Leased Property must be used to reimburse Borrower for the cost of restoring and repairing the Property restored as nearly as practicable to the equivalent of its condition and fair market value which existed immediately prior to the condemnation or casualty. Basic Rent shall not xxxxx hereunder by reason of any such casualty or, in or condemnation of the case of condemnation, to a condition approved by Lender (the “Restoration”)Leased Property, and require Borrower Tenant shall continue to restore perform and fulfill all of Tenant’s obligations, covenants and agreements hereunder notwithstanding such damage or destruction. Landlord and Tenant shall agree on the Property maximum cost of such restoration, repair, replacement, or rebuilding such agreement not to be unreasonably withheld or delayed, and such cost shall be paid first out of Tenant’s own funds to the equivalent extent such cost exceeds the Net Award, and then out of its original condition or to a condition approved by Lender, or (z) apply the balance Net Award. If Landlord and Tenant cannot agree on the maximum cost of such proceeds restoration, repair, replacement or rebuilding, the issue shall be submitted to arbitration pursuant to Article 38 hereof. If the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender Net Award shall not exercise its option to apply insurance proceeds or condemnation proceeds to exceed the payment of the Obligations if all of the following conditions are met: (1) Alteration Cost Threshold and provided that no Default or Material Event of Default has occurred and is continuing; , then the Net Award shall be paid to Tenant (2and to the extent the Net Award was previously assigned to Landlord, will be remitted by Landlord to Tenant) to be applied to the repair and rebuilding work required by this paragraph (b). If the Net Award exceeds the Alteration Cost Threshold, the proceeds shall be disbursed in accordance with clauses (i)-(iv) of paragraph (d) of this Article 13.
(c) If, at any time during the case Term of this Lease, Tenant shall reasonably determine that all or substantially all of the Leased Property has been destroyed by casualty, less than forty percent (40%) or all or substantially all of the Improvements have Leased Property has been damagedtaken by condemnation, or in the case of a taking, less than twenty-five percent (25%) after any substantial condemnation of the Improvements have been taken; Leased Property if the Leased Property is unsuitable for continued use in Tenant’s business, Tenant shall promptly notify Landlord of such event in writing within thirty (330) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means days of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration such condemnation or promptly upon Lender’s determination that casualty. In such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of event Tenant may either (i) one year before rebuild and/or restore the Maturity Date Leased Property, at Tenant’s own cost and expense and in accordance with the requirements set forth in paragraphs (a) and (b) of the Note Article 12 hereof and paragraph (d) of Article 13 hereof or (ii) give written notice to Landlord within ninety (90) days after such condemnation or casualty of Tenant’s intention to terminate this Lease in conformity with the requirements set forth herein. Substantially all of the Leased Property shall be deemed to have been taken by condemnation if the remaining portion shall not be of sufficient size or character to permit the operation by Tenant on an economically feasible basis of the business conducted thereon immediately prior to the condemnation, assuming that such remaining portion had been repaired and restored to the fullest extent possible. Substantially all of the Leased Property shall be deemed to have been destroyed by casualty, if, as to any one occurrence, fifty percent (50%) or more of the total net rentable square foot area within the Leased Property shall be damaged or destroyed and Tenant determines in its reasonable discretion that the Leased Property is no longer suitable for use in its business, Tenant’s notice to Landlord of Tenant’s intent to terminate this Lease shall (i) contain a brief description of the relevant condemnation or casualty, (ii) specify such termination date, which shall be the Installment Payment Date first occurring at least 210 days and not more than 360 days after such notice is given (the “Termination Date”), (iii) if such notice of termination shall be based on a reasonable determination by Tenant that after such casualty or condemnation the Leased Property is no longer suitable for use in Tenant’s business as aforesaid, contain a certification by Tenant that Tenant has made such determination in good faith, and that, on or before such Termination Date, Tenant will discontinue the use of the Leased Property in Tenant’s ordinary course of business, (iv) contain the irrevocable offer of Tenant to purchase Landlord’s interest in the Leased Property (and in the Net Award hereinafter referred to) on such Termination Date at the Termination Value (defined as the amount corresponding to the applicable Termination Date on Schedule C annexed hereto); and (v) contain a commitment by Tenant to deposit with a Depository not later than one year after the date of the loss condemnation or casualty (but no later that the Termination Date) as security for payment of the purchase price for the Leased Property the applicable Termination Value less the amount of any Net Award previously paid with respect to such casualty or condemnation and held by Landlord or Landlord’s designee pursuant to paragraph (Ba) of this Article 13. If Landlord shall reject such offer to purchase by notice (counter-signed by Landlord’s mortgagee) given to Tenant not later than thirty (30) Business Days prior to such Termination Date, then this Lease shall terminate on such Termination Date and the Net Award shall be paid and belong to Landlord, plus an amount equal to the deductible payable under the policy or policies of insurance, which shall be paid by Tenant to Landlord. Unless Landlord shall reject such offer to have accepted such offer, and on such Termination Date Landlord shall transfer, and Tenant shall purchase, Landlord’s interest in the Leased Property (and in the Net Award) in accordance with the provisions of Article 17 hereof, and upon payment of the purchase piece, Tenant’s obligation to pay Basic Rent shall terminate on the Termination Date. The additional amount, if any, deposited by Tenant pursuant to clause (v) of paragraph (c) of this Article 13 and not applied towards the purchase price of such Property shall be paid to Tenant on the Termination Date provided that there is no Material Event of Default existing under this Lease. If Tenant shall not give notice of its intention to terminate this Lease in accordance with paragraph (c) of this Article 13 or shall not be entitled to give notice of its intention to terminate this Lease, then this Lease shall continue in full force and effect.
(d) If the Net Award shall exceed the Alteration Cost Threshold, or if a Material Event of Default has occurred and is continuing, then:
(i) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion full amount of the Restoration; Net Award shall be paid to a depository (6the “Depository”) upon Lenderto be selected as hereinafter provided. The Depository shall be Landlord’s requestmortgage if it is a bank or trust company which has an undivided capital and surplus of $200 million or more, Borrower provides Lender evidence and otherwise shall be a bank or trust company selected by Landlord and approved by Tenant (so long as a Material Event of Default does not exist under this Lease) and by Landlord’s mortgagee, which approval shall not be unreasonably withheld or delayed, which has undivided capital and surplus of Two Hundred Million Dollars ($200,000,000) or more. The Depository shall have no affirmative obligation to prosecute a determination of the availability during amount of, or to effect the collection of, any insurance proceeds or condemnation award or awards, unless the Depository shall have been given an express written undertaking to do so by Landlord and after Tenant. Moneys received by the Restoration of the insurance required to be maintained by Borrower Depository pursuant to Section 1.4the provisions of this Lease shall not be mingled with the Depository’s own funds and shall be held by the Depository in trust, either separately or with other trust funds, for uses and purposes provided in this Lease. The Depository shall place any moneys held by it into an interest bearing account; and the interest paid or received by the Depository on the moneys so held in trust shall be added to the moneys so held in trust. The Depository shall not be liable or accountable for any action taken or suffered by the Depository or for any disbursement of moneys made by the Depository in good faith in reliance on advice of legal counsel. In disbursing monies pursuant to clause (7iii) Borrower provides Lender of this paragraph (d), the Depository may rely conclusively on the information contained in any notice given to the Depository by Tenant in accordance with written notice the provisions of said clause (iii), unless Landlord shall notify the Depository in writing within five business (5) days after settlement the giving of any such notice that Landlord intends to dispute such information, in which case the disputed amount shall not be disbursed but shall continue to be held by the Depository until such dispute shall have been resolved by agreement of the aforesaid insurance parties or condemnation claim by arbitration pursuant to Article 38 hereof;
(ii) Landlord and Tenant shall agree on the maximum cost of its request to undertake a Restoration; such rebuilding, restoration or repair, which agreement shall not be unreasonably withheld or delayed, and (8) such cost exceeds the Principal Lease is in full force and effectNet Award, the tenant under aggregate reasonably expected amount of which funds shall be deposited by Tenant with the Principal Lease does Depository upon written request therefor of Landlord or Landlord’s mortgagee. If Landlord and Tenant cannot have agree on the right maximum cost of such rebuilding, restoration or repair, such issue shall be submitted to terminate arbitration in accordance with Article 38 hereof;
(iii) Provided that no Material Event of Default has occurred and is continuing, from time to time, but not more often than once in any thirty (30) day period, Tenant may request reimbursement out of the Principal Lease due Net Award for the actual costs and expenses incurred by Tenant in connection with such repair and rebuilding. Such requests shall be made by written notice to the Depository, with a copy to Landlord, setting forth in reasonable detail all of such casualty or taking costs and expenses incurred by Tenant. If Landlord shall in good faith desire to dispute the information contained in any notice given by Tenant pursuant to this clause (as the case may beiii), or Landlord shall so notify Tenant and the tenant under the Principal Lease affirms Depository in writing that it has waived any right to terminate within five (5) Business Days after the Principal Lease as a result giving of such casualty or taking notice, specifying the amount intended to be disputed and the nature of the dispute. After such five (as 5) Business Day period has elapsed, if Landlord has not disputed the case may be). Except as provided information contained in Tenant’s Notice, the Note any application Depository shall promptly disburse to Tenant out of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change Net Award the amount of such installmentscosts and expenses. Borrower agrees If Landlord disputes the information contained in Tenant’s Notice, such dispute shall be resolved by agreement of the parties or by arbitration pursuant to execute Article 38 hereof, and any undisputed amount shall be released to Tenant; and
(iv) Upon the completion of such further evidence repair and rebuilding, any remaining Net Award shall be paid to and belong to Landlord. Landlord will utilize such remaining Net Award to prepay any mortgage indebtedness encumbering the Leased Property, and each payment of assignment Basic Rent payable during the remaining Term of this Lease to occur following the payment of such remaining Net Award to Landlord shall be reduced by an amount so as to preserve Landlord’s Yield with respect to its ownership of the Leased Property; provided that in no event will Basic Rent be reduced to an amount which is less than the debt service payable to Landlord’s mortgagee.
(e) Notwithstanding any awards or proceeds as Lender may require. Any reduction other provision to the contrary contained in this Article 13, in the Obligations resulting from Lender’s application event of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations anda temporary condemnation, in any event, the unpaid portion of the Obligations this Lease shall remain in full force and effect and Borrower Tenant shall not be excused entitled to the Net Award allocable to such temporary condemnation; except that such portion of the Net Award allocable to the time period after the expiration or termination of the Term of this Lease shall be paid to Landlord.
(f) This Article 13 shall be Tenant’s sole and exclusive remedy in the payment thereof. Except as provided event of damage or destruction to the Leased Property or in the Noteevent of a taking or condemnation thereof, partial payments received by Lenderand Tenant, as described in the preceding sentencea material inducement to Landlord entering into this Lease, shall be applied first to the final payment due irrevocably waives and releases Tenant’s rights under the Note California Civil Code Sections 1932(2) and thereafter to installments due under the Note in the inverse order 1933(4) and California Code of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Civil Procedure Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor1265.130.
Appears in 1 contract
Samples: Lease Agreement (Wells Real Estate Investment Trust Inc)
Condemnation and Casualty. (a) Borrower shall give Lender prompt written notice of the occurrence to Lender of any casualty (other than a de minimus casualty) affectingCasualty or Condemnation, whether commenced or the institution of any proceedings for eminent domain or for the condemnation ofthreatened, the Property affecting all or any portion thereofof any Mortgaged Property. All Insurance Proceeds and Condemnation Proceeds shall be payable to Lender, and Borrower hereby authorizes and directs any affected insurance proceeds on the Propertycompany, Governmental Authority or other Person to make payment of such Insurance Proceeds or Condemnation Proceeds directly to Lender, and all causes of action, claims, compensation, awards Insurance Proceeds and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and Condemnation Proceeds shall be paid to Lender. Lender may participate applied and disbursed in any suits or proceedings relating to any such proceeds, causes accordance with the provisions of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationthis Section 6; provided, however, that so long in the case of any Casualty or Condemnation relating to a Mortgaged Property as no Event to which the total Condemnation Proceeds or Insurance Proceeds are less than $250,000, such Proceeds shall be paid directly to Borrower, and Sections 6(b) and 6(c) below shall not apply, except that Borrower shall comply with the standards in Section 6(c) (ii) (A) through (G) below in respect of Default is continuingany Work undertaken.
(b) With respect to any Insurance Proceeds or Condemnation Proceeds relating to a Mortgaged Property that are received in respect of a Major Casualty/Condemnation, Lender shall have the option, in its sole discretion, to:
(i) upon notice to Borrower, apply all or part of such Insurance Proceeds or Condemnation Proceeds to the prepayment of the Related Loan in full or in part in accordance with Section 4.2 on the next Payment Date occurring after receipt of such Insurance Proceeds or Condemnation Proceeds (such Payment Date, the "Prepayment Date" with respect to such prepayment); or
(ii) upon notice to Borrower, permit Borrower to elect under paragraph (c) below to apply the Insurance Proceeds or Condemnation Proceeds to the restoration of the Mortgaged Property or to apply the Insurance Proceeds or the Condemnation Proceeds to the prepayment of the Related Loan in accordance with the provisions contained in Section 4.2.
(c) With respect to any Insurance Proceeds or Condemnation Proceeds relating to a Mortgaged Property (x) that are received in respect of a Casualty or Condemnation that is not participate a Major Casualty/Condemnation or (y) with respect to which Lender has permitted Borrower to exercise the option described in the adjustment ofSection 6 (b) (ii) above, and Borrower shall have the right to directly receive proceeds with respect option to, any loss which is not in excess of the lesser of :
(i) ten percent (10%) apply such Insurance Proceeds or Condemnation Proceeds to the prepayment of the then outstanding principal balance Related Loan in full or in part in accordance with Section 4.2 on the first Payment Date occurring after the expiration of forty-five (45) days from the Note and receipt of such Insurance Proceeds or Condemnation Proceeds (such Payment Date, the "Prepayment Date" with respect to such prepayment), in an amount not less than the amount of Insurance Proceeds or Condemnation Proceeds received by Borrower; or
(ii) $500,000.00. Except as provided in the foregoing sentenceupon notice to Lender no later than forty-five (45) days after receipt of such Insurance Proceeds or Condemnation Proceeds, Lender may, at Lender’s option, (y) hold the balance of any of elect irrevocably to apply such proceeds to be used to reimburse Borrower for the cost restoration of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty orrelated Mortgaged Property, in which event Borrower shall comply with the case following conditions in connection with the performance of condemnationall of such restoration (hereinafter, "Work"):
(A) no Work shall be undertaken until Borrower shall have procured and paid for, so far as the same may be required from time to time, all permits and consents of all Governmental Authorities having jurisdiction;
(B) any Work done pursuant to this Section 6 (c) (ii) shall be conducted under the supervision of a condition approved licensed architect and/or engineer selected by Lender (the “Restoration”), Borrower and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of and no such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, Work shall be done except in accordance with plans and specifications and cost estimates prepared and approved in writing by (x) Borrower's architect and/or engineer, and (y) if the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration cost of casualty damage on similar properties or restoration or rebuilding such Work exceeds the lesser of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; outstanding principal balance of the Related Loan for such Mortgaged Property and $1,000,000, also approved by Lender (3) provided that Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior shall not unreasonably withhold or delay such approval). Prior to the commencement of the Restoration or any Work and promptly upon Lender’s determination that thereafter, Borrower shall deliver to Lender copies of all plans and specifications, cost estimates relating to any such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion Work and any changes thereto regardless of the Restoration will cost to be sufficient incurred in connection therewith;
(C) any Work shall be commenced promptly and in any event within one hundred sixty-five days (165) after receipt of the Insurance Proceeds or the Condemnation Proceeds (except insofar as commencement within such time is rendered impossible due to meet force majeure) and, once commenced, shall be prosecuted diligently to completion in a good and workmanlike manner and in compliance with all operating costs applicable permits and authorizations and with all other expenses, deposits applicable Laws;
(D) the Work shall be performed with the objective of restoring the Mortgaged Property to at least its value and general utility prior to the Impound Accountrelevant Casualty or Condemnation (as determined by any MAI-licensed appraiser associated with a nationally recognized appraisal firm reasonably acceptable to Borrower, deposits to reserves as selected by Lender);
(E) any Work shall be completed free and loan repayment obligations relating clear of all Encumbrances, subject to the Property provisions of Section 10.2(a)(iii) hereof, and that in accordance with the debt service coverage ratio for plans and specifications therefor;
(F) during the Property after Restoration will be performance of any such Work, Borrower shall procure and maintain the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of Insurance Coverages required under Section l0.l (i) one year before hereof; and
(G) Borrower shall reimburse Lender for all reasonable fees and expenses incurred by Lender in connection with review of such Work, including but not limited to the Maturity Date reasonable fees and expenses of any architect selected by Lender to review the Note plans and specifications and to inspect the Work on behalf of Lender. If Borrower fails to elect to restore the Mortgaged Property within the time period specified above for the making of such election, and provided the Insurance Proceeds or Condemnation Proceeds are sufficient to prepay the Related Loan in full, Borrower shall be deemed to have elected to prepay the Related Loan pursuant to Section 6(c)(i).
(d) Lender shall disburse any Insurance Proceeds or Condemnation Proceeds to be used to restore the related Mortgaged Property pursuant to Section 6(c)(ii) above to or for the account of Borrower, upon request, in installments, to pay the costs and expenses associated with the restoration of such Mortgaged Property, as set forth below. Upon the payment of such costs and expenses, the balance of such Insurance Proceeds or Condemnation Proceeds, if any, shall be paid to Borrower.
(i) Each request for payment shall be made on 10 days' prior notice to Lender and shall be accompanied by a certificate to be made by the supervising architect or engineer or by an officer of Borrower, stating that the sum requested is justly required to reimburse Borrower for payments by Borrower to, or is justly due to, the contractor, subcontractors, materialmen, laborers, engineers, architects or other Persons rendering services or materials for the Work (giving a brief description of such services and materials); and
(ii) one year after the date each request shall be accompanied by waivers of liens reasonably satisfactory to Lender covering that part of the loss Work for which payment or casualty and (B) reimbursement is being requested, or by other evidence reasonably satisfactory to Lender that there has not been filed with respect to such Mortgaged Property any mechanics' or other lien or instrument for the rent loss insurance or business interruption insurance referenced retention of title in Section 1.4(f) above will cover all payments due under the Loan during the completion respect of any part of the Restoration; Work not discharged of record or bonded to the reasonable satisfaction of Lender.
(6e) upon Lender’s requestAll Insurance Proceeds and Condemnation Proceeds received or held by or deposited with Lender shall be held in interest-bearing accounts and all interest accruing thereon shall be deemed part of such Insurance Proceeds or Condemnation Proceeds.
(f) At any time when an Event of Default has occurred and is continuing, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not shall have the right to terminate settle, adjust or compromise any claim under any policy of insurance or in connection with a Condemnation subject to Borrower's consent. In all other cases, (i) Borrower may settle, adjust or compromise any such claim which is less than $100,000; and (ii) with respect to any claim in excess of $100,000, Lender and Borrower shall consult and cooperate with each other and each shall be entitled to participate in all meetings and negotiations with respect to the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result settlement of such casualty claim.
(g) Nothing in this Section 6 shall prevent Lender from applying at any time all or taking (as the case may be). Except as provided in the Note any application part of any awards Insurance Proceeds or proceeds Condemnation Proceeds then held by Lender to the Obligations shall not extend payment or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion prepayment of the Obligations shall remain in full force and effect and Borrower shall not be excused in following the payment thereof. Except as provided in acceleration of the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due obligations under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor13.1.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Except as otherwise herein provided, Tenant hereby irrevocably assigns to Landlord any award, compensation or insurance payment to which Tenant may become entitled by reason of Tenant's interest in the Premises (i) if the Premises are damaged or destroyed by fire or other casualty or (ii) if the use, occupancy or title of the occurrence Premises or any part thereof is taken, requisitioned or sold in, by or on account of any casualty (other than a de minimus casualty) affecting, actual or the institution of any proceedings for threatened eminent domain proceeding or other action by any Person having the power of eminent domain. Landlord may, at Tenant's sole expense, appear in any such proceeding or action, to negotiate, procure and adjust any claim for the condemnation ofany award, the Property compensation or insurance payment on account or any portion thereofsuch damage, destruction, taking, requisition or sale and Landlord shall collect, hold and apply any such award, compensation or insurance payment in conformity with the provisions of this Section 11. Tenant shall be entitled to participate in any such proceeding, action, negotiation, prosecution or adjustment. In addition, Tenant may, at its option, prosecute a separate claim against any taking authority, or, join with Landlord in its proceeding against any taking authority, for recovery of Tenant's relocation expenses and/or loss of trade fixtures, so long as any recovery by Tenant with respect thereto shall be separately stated and shall not diminish the award to Landlord. Landlord shall not be liable to Tenant for any recovery Landlord may obtain or recover from any taking authority. All insurance proceeds on the Propertyamounts paid in connection with any such damage, destruction, taking, requisition or sale shall be applied pursuant to this Section 11, and all causes such amounts (minus the expense of collecting such amounts) are herein called the net Proceeds. The term Net Proceeds shall not include any award, compensation or other payment receivable by Tenant pursuant to the provisions of the foregoing paragraph with respect to relocation expenses or trade fixtures. Tenant shall pay all reasonable expenses in connection with each such proceeding, action, claimsnegotiation, compensationprosecution and adjustment, awards and recoveries for including Landlord's costs therein, which expenses Tenant shall be subject to reimbursement out of any damageaward, condemnation compensation or taking of all or any part insurance payment received.
(b) If an occurrence of the Property or for any damage or injury character referred to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of clauses (i) ten percent or (10%ii) of the then outstanding principal balance Section 11(a) involves a loss which equals or exceeds $750,000 and Tenant concludes that such loss affects all or a material portion of the Note Land or Improvements and renders the Premises unsuitable for restoration and continued use and occupancy in Tenant's business, then Tenant shall, not later than 30 days after such occurrence, deliver to Landlord (i) notice of its intention to terminate this Lease on the next Payment Date which occurs not less than 90 days after the delivery of such notice (the "Termination Date") and (ii) $500,000.00a certificate of Tenant describing the event giving rise to such termination and stating that its board of directors has in good faith determined that such event has rendered the Improvements unsuitable for restoration for continued use and occupancy in Tenant's business and that Tenant has discontinued use thereof and will not resume use of such Premises for at least five years thereafter. Except as provided If the Termination Date occurs during the Initial Term or Primary Term, such notice to Landlord shall be accompanied by an irrevocable offer by Tenant (and Tenant hereby agrees to make the same) to purchase any remaining portion of Landlord's Estate with the Net Proceeds, if any, payable in connection with such occurrence (or the foregoing sentenceright to receive the same when made, Lender mayif payment thereof has not yet been made) on the Termination Date, at Lender’s optiona price determined in accordance with Schedule C. If the Termination Date occurs during an Extended Term, this Lease shall terminate on the Termination Date, except with respect to obligations and liabilities of Tenant hereunder, actual or contingent, which have arisen on or prior to the Termination Date, upon payment by Tenant of all Basic Rent, additional rent and other sums then due and payable hereunder to and including the Termination Date, and the Net Proceeds shall belong to Landlord. Landlord shall transfer and convey the entire Landlord's Estate to Tenant upon the terms and provisions set forth in Section 15 hereof against payment by Tenant of the purchase price therefor, together with all installments of Basic Rent, additional rent and other sums then due and payable hereunder to and including the Termination Date. If this Lease is so terminated as the result of an event of the character described in clauses (yi) hold or (ii) of Section 11(a), the award, compensation or other payment payable with respect thereto shall be allocated pro-rata to Landlord to compensate it for its interests as owner of the Landlord's Estate and to Tenant to compensate it for its interests as Tenant of the Premises. Notwithstanding anything to the contrary stated herein, if Landlord's award, compensation or other payment is insufficient to pay in full the balance then due and owning under the Note Agreement and the Deed of any Trust in respect of the Premises and principal, premium, if any, and accrued and unpaid interest on the Notes outstanding thereunder issued to finance the Premises, the Tenant will promptly pay the difference between such award, compensation or other payment and the amount necessary to satisfy such obligations of the Landlord under the Note Agreement and the Deed of Trust and in respect of such proceeds Notes.
(c) If, after an occurrence of the character referred to be used in clauses (i) or (ii) of Section 11(a) which involves a loss of less than $750,000, or, if the amount of such loss equals or exceeds $750,000 but Tenant does not give notice of its intention to reimburse Borrower for the cost of restoring terminate this Lease, then this Lease shall continue in full effect, and repairing the Property Tenant shall, at its expense, promptly restore, replace and rebuild ("Restore") any damage to the equivalent Premises caused by such event in conformity with the requirements of its Section 10 so as to restore the Premises (as nearly as practicable) to the condition and fair market value thereof immediately prior to such occurrence. For this purpose, Tenant shall be entitled to receive the casualty orNet Proceeds payable in connection with such occurrence if the amount of such Net Proceeds, in the case of condemnationtogether with such additional amounts, to a condition approved if any, theretofore expended by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent Tenant out of its original condition or own funds for such Restoration, are sufficient to pay the estimated cost of completing such Restoration, but only upon a condition approved by Lender, or (z) apply written application of the balance Tenant showing in reasonable detail the nature of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender the estimated cost (which shall do so in accordance with Lender’s then-current policies relating be verified by an accompanying certificate of an engineer or architect not an employee of Tenant) to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties complete Restoration and stating that have been the subject of a partial condemnation. Lender shall Tenant has not exercise its option to apply insurance proceeds or condemnation proceeds to the theretofore received payment of the Obligations if all of the following conditions are met: (1) for such work and that no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior continuing under this Lease to the commencement knowledge of the Restoration Tenant. Any Net Proceeds remaining after final payment has been made for such work shall be retained by or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will account of Landlord. However, if such Net Proceeds so retained by or for the account of Landlord shall be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determinesmore than $200,000, in its discretion, that (A) the Restoration will be completed before the earlier of then (i) one year before the Maturity Date of the Note or Basic Amount set forth in Schedule C shall be reduced by an amount equal to such Net Proceeds so retained by Landlord and (ii) one year after the date each installment of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during Basic Rent payable on and after the Restoration first Payment Date occurring three months or more after the final payment to Tenant for such work shall be reduced by a fraction of such installment, the numerator of which fraction shall be the amount so retained and the denominator of which shall be the Basic Amount prior to reduction thereof referred to in clause (i) above. In the event of any temporary requisition, this Lease shall remain in full effect and Tenant, if no Event of Default shall exist under this Lease and no notice shall have been given to Tenant of a default hereunder which has not been corrected, shall be entitled to receive the Net Proceeds allocable to such temporary requisitions; except that such portion of the insurance Net Proceeds allocable to the period after the expiration or termination of the term of this Lease shall be paid to Landlord. If the cost of any repairs required to be maintained made by Borrower Tenant pursuant to this Section 1.4; (711(c) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change exceed the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any eventNet Proceeds, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, deficiency shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due datepaid by Tenant. If Borrower elects to effect a Restoration, Borrower an Event of Default shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, exist under this Lease such Net Proceeds shall be sufficient for the purpose, restore, repair, replace payable to and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested held by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforLandlord.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) In the event of any condemnation or casualty of any Property in part or in the entirety, the proceeds of such condemnation or casualty to the extent not retained or otherwise applied by the holder of the occurrence of Construction Loan applied as required pursuant to any casualty (other than a de minimus casualty) affecting, or Major Lease approved by the institution of any proceedings for eminent domain or for the condemnation of, Lender at the Property or any portion thereof. All insurance proceeds applied by such mortgagee or in accordance with such Major Lease either to restore the improvements on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the such Property or for to reduce the Construction Loan applied as required pursuant to any damage condominium declaration and/or related by-laws affecting any Property that has previously been approved by Lender to restore the improvements on such Property or injury applied in accordance with the Loan Documents, shall be immediately deposited by Borrower in a cash collateral account to it for any loss or diminution in value be maintained by Borrower at a depository designated by Lender and under the sole dominion and control of Lender (the Property"Cash Collateral Account") pursuant to a cash collateral agreement to be entered into between Borrower, are hereby assigned to Lender and such Depository (the "Cash Collateral Agreement"); (such proceeds of condemnation so deposited being herein called "Condemnation Proceeds"; such proceeds of casualty so deposited being herein called "Casualty Proceeds"; and Condemnation Proceeds and/or Casualty Proceeds being herein called "Proceeds") and shall be paid to Lender. Lender may participate in any suits constitute additional collateral for the Loan Obligations.
(b) Provided that no Default or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is shall have occurred and be continuing, the Borrower shall be entitled to withdraw any Condemnation Proceeds from the Cash Collateral Account for the purpose of acquiring additional real estate assets with the consent of the Lender, which consent shall not be unreasonably withheld, provided that subject to the Loan Agreements and the Loan Documents (i) Borrower shall have delivered to Lender an appraisal for such real estate (x) for an amount at least equal to the amount of the Condemnation Proceeds sought to be withdrawn by the Borrower to purchase such real estate and (y) issued by an appraisal company and in form and substance reasonably satisfactory to the Lender; (ii) the Borrower shall have delivered to Lender environmental, engineering and such other studies, reports, documents, title reports, violation searches and other information relating to such real estate as would be generally required by the Lender in accordance with good institutional lending practices, all of which studies, reports, documents and other information shall be in form and substance reasonably satisfactory to the Lender; (iii) the Lender shall not participate be granted a priority lien mortgage on said real estate to further secure the Guaranty (the "Additional Mortgage"); (iv) the Borrower shall have delivered to Lender a paid-up mortgage title insurance policy in favor of Lender, insuring the Additional Mortgage as a second priority mortgage on such real estate, subject to no encumbrances or other title exceptions except those title exceptions which Lender reasonably determines are acceptable based on good institutional lending practices; and (v) the Borrower shall have paid all reasonable costs and expenses of the Lender (including reasonable attorneys' fees and expenses) incurred by the Lender in connection with the review of any of the foregoing conditions.
(c) The Borrower shall also have the right to withdraw the Condemnation Proceeds remaining in the adjustment ofCash Collateral Account to pay for the cost of constructing improvements on any Property covered by any Mortgage, and the Borrower shall have the right to directly receive proceeds with respect towithdraw any Casualty Proceeds in the Cash Collateral Account to pay for the repair and restoration of improvements whose damage or destruction generated such Casualty Proceeds, provided that, in all cases subject to the Loan Agreements, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of condominium declaration and/or related by-laws affecting such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition that has previously been approved by Lender, or (z) apply and the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are metLoan Documents: (1i) no Default or Event of Default has occurred and is shall be continuing; (2ii) the Lender shall have approved the plans and specifications for the construction of such improvements as well as the general contract and other major contracts to be entered into by the Borrower in connection with such construction, which approval will not unreasonably be withheld; (iii) the case Lender shall have received such certification and assurances as Lender shall reasonably request to assure it that the cost of casualty, less than forty percent (40%) constructing the improvements as shown on the plans approved by Lender does not exceed the amount of the Improvements have been damaged, or in Proceeds sought to be withdrawn by the case of a taking, less than twenty-five percent Borrower to pay for such improvements; and (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (Aiv) the Restoration will be completed before Lender may impose such further conditions and restrictions upon the earlier disbursement of (i) one year before such Proceeds as the Maturity Date of the Note Lender deems necessary or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during desirable, consistent with prudent institutional construction lending practices, to assure the completion of the Restoration; proposed improvements subject to no liens or encumbrances (6except Permitted Liens) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions aforesaid approved plans and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforapplicable laws.
Appears in 1 contract
Samples: Credit Agreement (Alexanders Inc)
Condemnation and Casualty. Borrower shall give Lender prompt written notice a. In the event any proceeding should be commenced for the taking in condemnation or under the power of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part substantial portion of any of the Tracts comprising the Property or for any damage or injury which after such taking would not leave sufficient property within such Tract to it for any loss or diminution continue the existing use of such Tract in value of substantially the Propertysame manner and with the same expected economic results (a "Condemnation Proceeding"), are hereby assigned to and Seller shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment promptly give written notice of, and Borrower full information concerning, such Condemnation Proceeding to Purchaser and shall thereafter keep Purchaser fully informed concerning such Condemnation Proceeding. If a Condemnation Proceeding occurs prior to the Closing, Purchaser shall have the right to directly receive proceeds terminate this Agreement. Should Purchaser terminate this Agreement as a result of any such Condemnation Proceeding, the Xxxxxxx Money will be delivered to Purchaser and both parties shall be released from their obligations hereunder, except for those obligations which expressly survive the Closing or any earlier termination of this Agreement.
b. If Purchaser does not elect to terminate this Agreement as a result of a Condemnation Proceeding, and the Property is purchased by Purchaser while such Condemnation Proceeding is pending, then Purchaser shall be substituted for Seller as a defendant in such proceeding. In the event such Condemnation Proceeding is concluded while Seller is still the owner of the Property and Seller receives the condemnation award, then the Consideration with respect to, any loss to such affected Tract (based on that portion of the Consideration allocated to the affected Tract as indicated on Exhibit A) shall be reduced by the amount of the condemnation award which is attributable thereto. If Seller has not in excess received the condemnation award at the time of Closing, then the Consideration with respect to such affected Tract shall remain unchanged, and Seller shall assign to Purchaser all of the lesser right, title and interest of Seller in such condemnation award. Seller agrees that Purchaser shall have the right, at Purchaser's expense, to participate in any Condemnation Proceeding.
c. Pending Closing, the risk of damage or destruction of the Property by reason of any casualty, except as a result of Purchaser’s inspection activities, shall be and remain in Seller. In the event the Improvements are partially destroyed by fire or other casualty pending the Closing and the cost associated with repairing any such damage is equal to or greater than Five Hundred Thousand and No/100ths Dollars ($500,000.00) in the aggregate for all Tracts, Seller shall immediately notify Purchaser of such damage or destruction and Purchaser shall have the option to either (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any terminate this Agreement by giving Seller written notice of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice termination within five business (5) days after settlement Purchaser receives notice of such casualty from Seller, and the aforesaid Xxxxxxx Money will be delivered to Purchaser and the parties hereto shall be relieved of their obligations hereunder, except for those obligations that expressly survive the Closing or any earlier termination of this Agreement; or (ii) proceed with Closing whereupon Purchaser shall be entitled to (x) a written assignment from Seller of all insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease proceeds due Seller with respect to such casualty and (y) a credit against the Consideration equal to all deductibles or taking self-insured retentions under Seller’s insurance policies. In the event the Improvements are partially destroyed by fire or other casualty pending Closing and the cost associated with repairing any such damage is less than Five Hundred Thousand and No/100ths Dollars (as $500,000.00) in the case may be)aggregate for all Tracts, or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result Seller shall immediately notify Purchaser of such casualty damage or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations destruction and Purchaser shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andproceed with Closing, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, whereupon Purchaser shall be applied first entitled to the final payment due under the Note and thereafter to installments due under the Note in the inverse order a written assignment from Seller of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment if any, due Seller with respect to such casualty, together with a credit against the Consideration equal to all deductibles or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorneyself-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insured retentions under Seller’s insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforpolicies.
Appears in 1 contract
Samples: Purchase and Sale Agreement (American Retirement Corp)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) The Lessee hereby (subject to the provisions hereinafter set forth) irrevocably assigns to the Lessor any award or compensation or insurance payment or other proceeds to which the Lessee may become entitled by reason of the occurrence of its interest in any casualty Property or any portion thereof if (other than a de minimus casualtyi) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the such Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part facility, edifice or structure which furnishes or supplies any service upon which the use or occupancy of the such Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorizeddependent, in its own name whole or in Borrower’s namepart, to adjust any loss covered is damaged or destroyed by insurance fire, earthquake, tornado, hurricane or any condemnation claim or cause of actionother casualty (each, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (ia "Casualty") ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after any Governmental Authority provides notice to the date Lessor or the Lessee of its intention to condemn, confiscate, seize or condemn any Property or any portion thereof, or any facility, edifice or structure which furnishes or supplies any service upon which the use or occupancy of any Property is dependent, in whole or in part (each, a "Condemnation"). Any Property or portion thereof affected by a Casualty or a Condemnation is hereby referred to as the "Affected Property".
(b) The Lessee shall immediately thereafter notify the Lessor in writing of any such Casualty or Condemnation. In addition, the Lessee shall appear in any proceeding or action to defend, negotiate, prosecute or adjust any claim for any award or compensation or insurance payment on account of any Casualty or any such Condemnation and may take all appropriate action in connection with any Casualty or any such Condemnation, including the employment of counsel reasonably satisfactory to the Lessor. No settlement of any such proceeding or action will be made by the Lessee or the Lessor without the prior written consent of the loss other party hereto, which consent will not be unreasonably withheld or casualty delayed.
(c) Any and (B) the rent loss insurance all amounts representing proceeds paid in connection with any Condemnation or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s requestCasualty, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be, to which the Affected Property, the Lessee or the Lessor may be entitled (collectively, the "Proceeds"), will, subject to Section 7.03(d), be paid over to the Proceeds Trustee to be held in trust by such Proceeds Trustee and distributed pursuant to this Section 7.01(c) and Sections 7.03 and 7.04 or pursuant to the tenant under Participation Agreement, as appropriate (all such Proceeds, less the Principal costs and expenses incurred by the Lessor and the Lessee in collecting such amounts, but including any reimbursement by the Lessee for costs and expenses in connection therewith to which the Lessor, the Certificate Holders and the Note Holders are entitled pursuant to the Operative Documents, are the "Net Proceeds"). If the Lessee shall restore such Property, any Proceeds shall, subject to Section 7.03(d), be paid over to the Lessee and used in accordance with Section 7.03. Any and all reasonable charges, fees and expenses of the Proceeds Trustee will be paid from the Net Proceeds. "Proceeds Trustee" means the Lessor. LEASE Proprietary & Confidential The Lessee agrees that this Lease affirms controls the rights of the Lessor and the Lessee in writing that it has waived any right to terminate the Principal Lease such Proceeds paid or payable in connection with or as a result of such casualty a Condemnation or taking Casualty and any rights of the Lessee (as same may relate to rights between the case Lessee and the Lessor, as distinct from rights the Lessee may be). Except as provided in have against third parties other than the Lessor, the Agent, the Note Holders or Certificate Holders) under any application of any awards present or proceeds future Law to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is contrary are hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforwaived.
Appears in 1 contract
Samples: Lease (Rite Aid Corp)
Condemnation and Casualty. Borrower shall give Lender prompt written notice of (i) If, prior to the occurrence of any casualty (other than a de minimus casualty) affectingClosing Date, or the institution of any proceedings for eminent domain or for the condemnation of, the Property all or any portion thereof. All insurance proceeds on of any or all of the PropertyReal Property are permanently taken or rendered unusable for its current purpose by eminent domain, and is the subject of a pending taking which has not been consummated, or if Seller or any Affiliate thereof shall receive a written notice from any Governmental Authority having eminent domain power over all causes or any portion of actionthe Real Property of its intention to take, claimsby eminent domain proceeding, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property any or for any damage or injury to it for any loss or diminution in value all of the PropertyReal Property (a “Condemnation”), are hereby assigned or is destroyed or damaged by fire or other casualty (a “Casualty”), then Seller shall provide written notice thereof to and the Purchasers promptly after Seller first obtains Knowledge thereof, which written notice shall be paid accompanied by a written estimate prepared by an independent architect reasonably selected by Seller and reasonably acceptable to Lenderthe Purchasers of the cost to restore the Real Property to the condition immediately prior to such Casualty or Condemnation and the time it will take to complete such restoration. Lender may participate in any suits If such Condemnation or proceedings relating Casualty is a Covered Event (as such term is hereinafter defined), the Purchasers shall have the option to any such proceedsterminate this Agreement upon notice to Seller given not later than fifteen (15) Business Days after receipt of Seller’s notice, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationTIME BEING OF THE ESSENCE; provided, however, that so long Seller may override any such election to terminate this Agreement by the Purchasers as a result of a Casualty, if, no Event later than fifteen (15) Business Days after any such election to terminate is delivered by the Purchasers to Seller, Seller (i) notifies the Purchasers that Seller intends to cause Seller or Acquired Companies, as applicable, to repair such damage on or prior to the Outside Closing Date, and (ii) provides, together with such notice, a statement from an independent architect reasonably selected by Seller and reasonably acceptable to the Purchasers that substantial completion of Default is continuing, Lender the restoration or repair arising from such condemnation or casualty can with reasonable diligence be achieved by the Outside Closing Date (an “Override Election”); provided that Seller shall not participate be entitled to deliver an Override Election with respect to (x) any Condemnation or (y) any Casualty if the aggregate cost to fully restore the damage from such Casualty to the condition of the Real Property immediately prior to such Casualty (the “Prior Condition”), as determined by an independent architect reasonably selected by Seller and reasonably acceptable to the Purchasers, is estimated to exceed five hundred million dollars ($500,000,000).
(ii) No notice given pursuant to the first sentence of this Section 13(a) shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any term or condition contained herein or the adjustment ofparties’ rights to indemnification hereunder.
(iii) The Purchasers’ failure to give notice to terminate this Agreement pursuant to this Section 13(a) shall not, in and Borrower of itself, have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any term or condition contained herein or the Purchasers’ Losses or right to indemnification hereunder and shall not constitute or be deemed to constitute a release or waiver of any kind or character.
(iv) If this Agreement is terminated by the Purchasers pursuant to this Section 13(a), neither Seller nor any Purchaser shall have any further rights or obligations to the other hereunder except as set forth herein; provided that each of the OpCo Confidentiality Agreement and the PropCo Confidentiality Agreement shall survive any termination of this Agreement in accordance with its respective terms. Until the Purchasers terminate this Agreement pursuant to this Section 13(a) in connection with a Condemnation or Casualty that is a Covered Event, Seller shall not have the right to directly receive proceeds with respect to, settle any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, claims related to a condition approved by Lender (Condemnation or Casualty without the “Restoration”)Purchasers’ written consent, and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender which consent shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: be unreasonably withheld (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or except in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determinesCondemnation or Casualty that is a Covered Event, in its which case the Purchasers may withhold their consent in their sole and absolute discretion). Seller shall cooperate with the Purchasers to sign all required proofs of loss, that there will be sufficient funds to complete the Restoration (including, without limitation, by means assignments of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs claims and other expensessimilar items with regard to a Condemnation or Casualty.
(v) Subject to Section 13(a)(vi), deposits if this Agreement is not terminated pursuant to the Impound Accountthis Section 13(a), deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that either (A) at Purchasers’ option, Seller shall and shall be obligated to cause the Restoration will be completed before Real Estate Sellers or the earlier Acquired Companies, as applicable, without incurring any Liens (other than Permitted Liens), to promptly commence to restore and repair the damage or destruction resulting from the Casualty in question to the Prior Condition, and to diligently pursue such restoration and repair, in a good and workerlike manner and in compliance with applicable Law and Contracts using new materials, the quality of (i) one year before the Maturity Date which is not less than that of the Note affected Real Property immediately prior to such Casualty and using duly licensed, reputable and financially solvent third-party architects, engineers and contractors, and pursuant to plans and specifications, in each case, reasonably acceptable to the Purchasers, and the Purchasers shall have the right from time to time (but not more than once per month) during the restoration of such Casualty to inspect the improvements to confirm Seller’s compliance with this Section 13(a)(v), or (ii) one year after the date of the loss or casualty and (B) unless Purchasers elect for Seller to restore and repair the rent loss insurance damage or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under destruction resulting from the Loan during the completion Casualty pursuant to clause (A), neither Seller nor any of the Restoration; Real Estate Sellers or the Acquired Companies shall repair any damage or destruction or incur any cost or obligation with respect to such repair (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance other than protective repairs required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of preserve and secure the aforesaid insurance or condemnation claim of its request to undertake a Restoration; Real Property and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may beprotect Persons from injury). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums Unless Seller makes an Override Election and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation awardaward are applied toward the cost of restoration and repair, Seller shall and/or shall cause any of the Real Estate Sellers or the Acquired Companies, as appropriateapplicable, to retain until the Closing Date all of the insurance proceeds paid with respect to such Casualty or condemnation award (less amounts applied by Seller or any of the Real Estate Sellers or Acquired Companies, as applicable, toward such repair or restoration or protective repairs in accordance with the immediately preceding sentence and reasonable collection costs associated therewith), including any rent abatement insurance accruing after the Closing for such Casualty or Condemnation, and assign any claims in respect of any such insurance proceeds or condemnation award and the related insurance policies shall be sufficient assigned to the Purchasers (or their designee). In each instance, whether or not the restoration and repair under clause (B) is completed by the Closing Date, the parties shall proceed to the Closing pursuant to the terms hereof without abatement of the OpCo Transaction Consideration (except for a credit against the purposeOpCo Transaction Consideration in the amount of the applicable deductible under the Insurance Policies of any of the Real Estate Sellers or Acquired Companies, restoreas applicable).
(vi) If this Agreement is not terminated pursuant to this Section 13(a), repairand Seller shall have delivered an Override Election pursuant to Section 13(a)(i), replace Seller shall and rebuild shall be obligated to cause the Real Estate Sellers or the Acquired Companies, as applicable, on or before the Outside Closing Date, without incurring any Liens (other than Permitted Liens), to restore and repair the damage or destruction resulting from the Casualty in question to the Prior Condition, in a good and workerlike manner and in compliance with applicable Law and Contracts using new materials, the quality of which is not less than that of the affected Real Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking Casualty and using duly licensed, reputable and financially solvent third-party architects, engineers and contractors, and pursuant to plans and specifications, in accordance with each case, reasonably acceptable to the foregoing provisions and Borrower Purchasers. The Purchasers shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided have the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver right from time to time (but not more than once per month) during the restoration of such further instruments as may be requested by Lender Casualty to inspect the improvements to confirm Seller’s compliance with this Section 13(a)(vi). Upon Seller’s compliance with this Section 13(a)(vi), the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject parties shall proceed to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject Closing pursuant to the terms hereof without abatement of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforOpCo Transaction Consideration.
Appears in 1 contract
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Except as otherwise herein provided, Tenant hereby irrevocably assigns to Landlord any award, compensation or insurance payment to which Tenant may become entitled by reason of Tenant's interest in the Premises (i) if the Premises are damaged or destroyed by fire or other casualty or (ii) if the use, occupancy or title of the occurrence Premises or any part thereof is taken, requisitioned or sold in, by or on account of any casualty (actual or threatened eminent domain proceeding or other than a de minimus casualty) affectingaction by any Person having the power of eminent domain. Landlord may, at Tenant's sole expense, appear in any such proceeding or the institution action, to negotiate, prosecute and adjust any claim for any award, compensation or insurance payment on account of any proceedings such damage, destruction, taking, requisition or sale and Landlord shall collect, hold and apply any such award, compensation or insurance payment in conformity with the provisions of this Section 11. Tenant shall be entitled to participate in any such proceeding, action, negotiation, prosecution or adjustment. In addition, Tenant may, at its option, prosecute a separate claim against any taking authority, or, join with Landlord in its proceeding against any taking authority, for eminent domain recovery of Tenant's relocation expenses and/or loss of trade fixtures, so long as any recovery by Tenant with respect thereto shall be separately stated and shall not diminish the award to Landlord. Landlord shall not be liable to Tenant for any recovery Landlord may obtain or for the condemnation of, the Property or recover from any portion thereoftaking authority. All insurance proceeds on the Propertyamounts paid in connection with any such damage, destruction, taking, requisition or sale shall be applied pursuant to this Section 11, and all causes such amounts (minus the expense of collecting such amounts) are herein called the Net Proceeds. The term Net Proceeds shall not include any award, compensation or other payment receivable by Tenant pursuant to the provisions of the foregoing paragraph with respect to relocation expenses or trade fixtures. Tenant shall pay all reasonable expenses in connection with each such proceeding, action, claimsnegotiation, compensationprosecution and adjustment, awards and recoveries for including Landlord's costs therein, which expenses Tenant shall be subject to reimbursement out of any damageaward, condemnation compensation or taking of all or any part insurance payment received.
(b) If an occurrence of the Property or for any damage or injury character referred to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of clauses (i) ten percent or (10%ii) of the then outstanding principal balance Section 11(a) involves a loss which equals or exceeds $_____________ and Tenant concludes that such loss affects all or a material portion of the Note Land or Improvements and renders the Premises unsuitable for restoration and continued use and occupancy in Tenant's business, then Tenant shall, not later than 30 days after such occurrence, deliver to Landlord
(i) notice of its intention to terminate this Lease on the next Payment Date which occurs not less than 90 days after the delivery of such notice (the "Termination Date") and (ii) $500,000.00a certificate of Tenant describing the event giving rise to such termination and stating that its board of directors has in good faith determined that such event has rendered the Improvements unsuitable for restoration for continued use and occupancy in Tenant's business and that Tenant has discontinued use thereof and will not resume use of such Premises for at least five years thereafter. Except as provided If the Termination Date occurs during the Initial Term or Primary Term, such notice to Landlord shall be accompanied by an irrevocable offer by Tenant (and Tenant hereby agrees to make the same) to purchase any remaining portion of Landlord's Estate with the Net Proceeds, if any, payable in connection with such occurrence (or the foregoing sentenceright to receive the same when made, Lender mayif payment thereof has not yet been made) on the Termination Date, at Lender’s optiona price determined in accordance with Schedule C. If the Termination Date occurs during an Extended Term, this Lease shall terminate on the Termination Date, except with respect to obligations and liabilities of Tenant hereunder, actual or contingent, which have arisen on or prior to the Termination Date, upon payment by Tenant of all Basic Rent, additional rent and other sums then due and payable hereunder to and including the Termination Date, and the Net Proceeds shall belong to Landlord. Landlord shall transfer and convey the entire Landlord's Estate to Tenant upon the terms and provisions set forth in Section 15 hereof against payment by Tenant of the purchase price therefor, together with all installments of Basic Rent, additional rent and other sums then due and payable hereunder to and including the Termination Date. If this Lease is so terminated as the result of an event of the character described in clauses (yi) hold or (ii) of Section 11(a), the award, compensation or other payment payable with respect thereto shall be allocated pro-rata to Landlord to compensate it for its interests as owner of the Landlord's Estate and to Tenant to compensate it for its interests as Tenant of the Premises. Notwithstanding anything to the contrary stated herein, if Landlord's award, compensation or other payment is insufficient to pay in full the balance then due and owing under the Note Agreement and the Deed of any Trust in respect of the Premises and principal, premium, if any, and accrued and unpaid interest on the Notes outstanding thereunder issued to finance the Premises, the Tenant will promptly pay the difference between such award, compensation or other payment and the amount necessary to satisfy such obligations of the Landlord under the Note Agreement and the Deed of Trust and in respect of such proceeds Notes.
(c) If, after an occurrence of the character referred to be used in clauses (i) or (ii) of Section 11(a) which involves a loss of less than $750,000, or, if the amount of such loss equals or exceeds $750,000 but Tenant does not give notice of its intention to reimburse Borrower for the cost of restoring terminate this Lease, then this Lease shall continue in full effect, and repairing the Property Tenant shall, at its expense, promptly restore, replace and rebuild ("Restore") any damage to the equivalent Premises caused by such event in conformity with the requirements of its Section 10 so as to restore the Premises (as nearly as practicable) to the condition and fair market value thereof immediately prior to such occurrence. For this purpose, Tenant shall be entitled to receive the casualty orNet Proceeds payable in connection with such occurrence if the amount of such Net Proceeds, in the case of condemnationtogether with such additional amounts, to a condition approved if any, theretofore expended by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent Tenant out of its original condition or own funds for such Restoration, are sufficient to pay the estimated cost of completing such Restoration, but only upon a condition approved by Lender, or (z) apply written application of the balance Tenant showing in reasonable detail the nature of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender the estimated cost (which shall do so in accordance with Lender’s then-current policies relating be verified by an accompanying certificate of an engineer or architect not an employee of Tenant) to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties complete Restoration and stating that have been the subject of a partial condemnation. Lender shall Tenant has not exercise its option to apply insurance proceeds or condemnation proceeds to the theretofore received payment of the Obligations if all of the following conditions are met: (1) for such work and that no Default or Event of Default has occurred and is continuing; continuing under this Lease to the knowledge of Tenant. Any Net Proceeds remaining after final payment has been made for such work shall be retained by or for the account of Landlord. However, if such Net Proceeds so retained by or for the account of Landlord shall be more than $200,000, then (2i) the Basic Amount set forth in Schedule C shall be reduced by an amount equal to such Net Proceeds so retained by Landlord and (ii) each installment of Basic Rent payable on and after the case first Payment Date occurring three months or more after the final payment to Tenant for such work shall be reduced by a fraction of casualtysuch installment, less than forty percent (40%) the numerator of which fraction shall be the Improvements have been damaged, or in amount so retained and the case denominator of a taking, less than twenty-five percent (25%) of which shall be the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender Basic Amount prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, reduction thereof referred to in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of clause (i) one year before above. In the Maturity Date event of any temporary requisition, this Lease shall remain in full effect and Tenant, if no Event of Default shall exist under this Lease and no notice shall have been given to Tenant of a default hereunder which has not been corrected, shall be entitled to receive the Net Proceeds allocable to such temporary requisition; except that such portion of the Note or (ii) one year Net Proceeds allocable to the period after the date expiration or termination of the loss or casualty and (B) term of this Lease shall be paid to Landlord. If the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion cost of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance any repairs required to be maintained made by Borrower Tenant pursuant to this Section 1.4; (711(c) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change exceed the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any eventNet Proceeds, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, deficiency shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due datepaid by Tenant. If Borrower elects to effect a Restoration, Borrower an Event of Default shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, exist under this Lease such Net Proceeds shall be sufficient for the purpose, restore, repair, replace payable to and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested held by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforLandlord.
Appears in 1 contract
Condemnation and Casualty. Borrower If any condemnation or taking, or loss or damage by fire, or other casualty to any Property occurs prior to the Closing Date for such Property, Seller shall give Lender prompt written notice of the occurrence of to Buyer. If any casualty (other than a de minimus casualty) affectingcondemnation or taking, or loss or damage by fire or other casualty to any individual Property occurs prior to the institution of any proceedings for eminent domain or for Closing which does not exceed the condemnation ofMateriality Limit, the Property Closing shall occur just as if such condemnation, loss, or damage had not occurred, and Seller shall assign to Buyer (or deliver to Buyer if previously received by Seller) all of Seller's interest in any condemnation actions and proceeds, or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation proceeds paid or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits Seller by Seller's insurer with respect to such fire or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationother casualty; provided, however, that so long as no Event of Default is continuing, Lender Seller shall not participate in the adjustment of, and Borrower shall have the right be entitled to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any retain an amount of such insurance proceeds equal to be used to reimburse Borrower for the cost of restoring and Seller's reasonable third-party expenses, if any, actually incurred by Seller in repairing the Property to the equivalent of its condition immediately prior to the casualty ordamage caused by fire or other casualty. At Closing, in the case of condemnationa fire or other casualty, to Sellers shall give Buyer a condition approved by Lender (credit on the “Restoration”), and require Borrower to restore the Property Purchase Price equal to the equivalent lesser of the reasonably estimated cost of restoration (as mutually determined by Seller and Buyer acting in good faith) or the amount of any deductible, unless Sellers have fully repaired (lien-free) the damage caused by such fire or other casualty to Buyer’s reasonable satisfaction. Sellers shall maintain its original condition current "all risk" replacement value insurance coverage in place on the Properties at all times prior to the Closing. In the event, prior to the Closing for such Property, any condemnation or to a condition approved by Lendertaking, or loss or damage by fire or other casualty to any individual Property occurs which exceeds the Materiality Limit, at Buyer's option, either:
(za) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, this Agreement shall terminate in accordance with Article 14 hereof if Buyer shall so notify Sellers in writing within ten (10) days of Buyer receiving notice from Sellers of the terms hereof, determines casualty or condemnation; or
(b) if Buyer shall not have timely notified Sellers of its election to apply insurance or condemnation proceeds to Restoration, Lender shall do so terminate this Agreement in accordance with Lender’s then-current policies relating paragraph (a) above, the Closing shall occur just as if such condemnation, loss, or damage had not occurred, without reduction in the Purchase Price, and Sellers shall assign to theBuyer (or deliver to Buyer if previously received by Seller) all of Seller's interest in any condemnation actions and proceeds, as applicableor any and all proceeds paid or to be paid to Seller by Seller's insurer with respect to such fire or other casualty; provided, restoration however, that Seller shall be entitled to retain an amount of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply such insurance proceeds equal to Seller's reasonable third-party expenses, if any, actually incurred by Seller in repairing the damage caused by fire or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of other casualty. At Closing, less than forty percent (40%) of the Improvements have been damaged, or in the case of a fire or other casualty, Sellers shall give Buyer a credit on the Purchase Price equal to the lesser of the reasonably estimated cost of restoration (as mutually determined by Seller and Buyer acting in good faith) or the amount of any deductible, unless Sellers have fully repaired (lien-free) the damage caused by such fire or other casualty to Buyer’s reasonable satisfaction. Notwithstanding the foregoing, in the event that any condemnation or taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or damage by fire or other casualty to any individual Property occurs which exceeds the Materiality Limit and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s requestif and only if Buyer elects to terminate this Agreement, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have Seller reserves the right to terminate this Agreement as to the Principal Lease due affected Property only, by delivering written notice to Buyer of such election simultaneously with Seller’s notice to Buyer of such casualty, condemnation or loss. Following such notice of partial termination, this Agreement shall survive with respect to the remaining Properties, and the Closing shall proceed with respect to the remaining Properties (with the Purchase Price reduced by the Purchase Price allocated to such casualty or taking (Property as set forth on Schedule 2 attached hereto). Except for those obligations which expressly survive termination of this Agreement, neither Buyer nor Sellers shall have any further obligations hereunder with respect to any Property for which this Agreement has been terminated in accordance with the case may be), or foregoing. In the tenant under event of any partial termination Buyer shall be entitled to a return of the Principal Lease affirms in writing that it has waived any right to terminate applicable portion of the Principal Lease Xxxxxxx Money as a result of such casualty or taking (as partial termination. In the case may be). Except as provided event that, following any casualty, Seller’s insurer will not permit Seller to assign its rights to proceeds, then in lieu of such assignment Buyer shall be entitled to a credit in the Note any application full amount of any awards or proceeds the damage. Notwithstanding anything contained herein to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andcontrary, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds to be credited or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible delivered to its value, condition and character immediately prior Buyer pursuant to such casualty this Article will exclude business interruption or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, rental loss insurance proceeds, payment or other compensation. Subject if any, allocable to the preceding provisions of this Section 1.7period through the Closing Date for such Property, Lender is hereby irrevocably constituted which proceeds will be retained by Sellers. Any business interruption or rental loss insurance proceeds received by Seller and appointed allocable to the attorney-in-fact of Borrower (which power of attorney period after the Closing Date for such Property shall be irrevocable so long as any Obligations is outstandingdelivered to Buyer. Any proceeds with respect to the Pending Condemnation shall belong to Seller, shall be deemed coupled with an interestwhether received by Seller or Buyer, before or after Closing. This provision shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforClosing.
Appears in 1 contract
Samples: Real Estate Purchase and Sale Agreement (Steadfast Income REIT, Inc.)
Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Anticipated Balloon Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Condemnation and Casualty. Borrower (a) If: (i) the use, occupancy or title of or to the Premises or any part thereof is taken, requisitioned or sold in, by or on account of any actual or threatened eminent domain proceeding or other action by any person having the power of eminent domain (“Condemnation”); or (ii) the Premises or any part thereof is damaged or destroyed by fire, flood or other casualty (“Casualty”), Tenant shall give Lender prompt written notice thereof to Landlord (which notice shall set forth Tenant’s good faith estimates of the cost of repairing or restoring any damage or destruction caused thereby), or, if Tenant cannot reasonably estimate the anticipated cost of restoration, Tenant shall nonetheless give Landlord prompt notice of the occurrence of any casualty (other than a de minimus casualty) affectingsuch Casualty or Condemnation, or and will diligently proceed to obtain estimates to enable Tenant to quantify the institution anticipated cost of such restoration, whereupon Tenant shall promptly notify Landlord of such good faith estimate. All awards, compensations, and insurance payments on account of any proceedings for eminent domain Condemnation or for the condemnation ofCasualty (net of Tenant’s Loss, the Property or any portion thereofas defined herein) are hereinafter collectively called “Compensation”. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so So long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing, Tenant is hereby authorized and empowered, at its cost and expense, to appear in any such proceeding or other action, to negotiate and prosecute (in each case subject to Landlord’s approval as set forth hereinafter) any claim for any award, compensation, insurance proceeds or other payment on account of any such Casualty or Condemnation (it being understood that Landlord shall be entitled, at its own cost, to participate therein and no such proceeding shall be settled without Landlord’s consent, which such consent shall not be unreasonably withheld, conditioned or delayed), and to cause any such award, compensation, insurance proceeds or other payment to be paid to Landlord, except that Tenant shall be entitled to submit a separate claim for any of Tenant’s losses on account of any such Casualty or Condemnation (including without limitation, for interruption or loss of business, moving expenses, for Tenant improvements or for the value of Tenant’s leasehold interest (collectively, “Tenant’s Loss”)) and receive and retain any award applicable thereto. Any final adjustment, settlement or compromise of any such claim shall, however, be subject to the prior written approval of Landlord, which shall not be unreasonably withheld, conditioned or delayed. For so long as an Event of Default exists, Tenant shall not be entitled to adjust, collect or compromise any such claim or to participate with Landlord in any adjustment, collection and compromise of any Compensation payable in connection with a Casualty or Condemnation. Tenant agrees to sign, upon the reasonable request of Landlord, all such proofs of loss, receipts, vouchers and releases. All Compensation shall be applied pursuant to the applicable provisions of ARTICLE 3, and all such Compensation (less the reasonable expense of collecting such Compensation) is herein called the “Net Proceeds”; provided, however, that the portion of any Compensation in connection with a Condemnation that is allocable to the loss of value in, or diminution in value of, the Premises (the “Lost Value Award”) shall be promptly paid to Landlord in all events and not included in Net Proceeds. Tenant shall pay all insurance deductibles in connection with any Casualty. Except in the event of a Major Casualty or Major Condemnation, Tenant shall be unconditionally obligated, at Tenant’s sole cost, to repair, restore or replace, as necessary, the Premises after any Casualty or Condemnation irrespective of the availability or sufficiency Net Proceeds.
(b) Except in the event of a termination of this Lease pursuant to Section 3.1(c), Tenant shall have no right to terminate this Lease on the basis of any Casualty or Condemnation or otherwise. If the restoration or replacement of the Premises after a Casualty or Condemnation extends beyond the Expiration Date (except in the event that a Termination Notice (as defined hereinafter) is delivered by Tenant to Landlord prior to the expiration of the Term), this Lease shall continue in effect until such restoration or replacement is complete, except that Tenant shall not be obligated to pay Rent during such period of restoration or replacement after the expiration of the Term; provided, however, that the foregoing shall be without limitation upon Tenant’s obligation to pay the Remaining Rent (as hereinafter defined) in connection with Tenant’s termination of the Lease after a Major Casualty.
(c) In the event of a Major Condemnation (as defined hereinafter) that occurs at any time during the Lease Term or a Major Casualty (as defined hereinafter) that occurs during the last two (2) in the case of casualty, less than forty percent (40%) years of the Improvements Lease Term, Tenant shall have been damagedthe right, or in the case of a takingat its election, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds either to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before rebuild and restore the Maturity Date of Premises in accordance with the Note requirements set forth in Sections 2.5 and 3.4 herein and the Net Proceeds (but not any Lost Value Award) shall be made available to Tenant for such rebuilding and/or restoration pursuant to Section 3.2(e) hereof or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with give written notice (the “Termination Notice”) to Landlord within five business sixty (560) days after settlement such Major Casualty or Major Condemnation of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right Tenant’s election to terminate this Lease. In the Principal Lease due event the Tenant gives a Termination Notice pursuant to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, the Termination Notice shall include a specification of the proposed termination date (the “Lease Termination Date”) and this Lease shall terminate and all Net Proceeds shall be applied first paid to Landlord on the Lease Termination Date (provided, however, that if the Net Proceeds have not yet been paid in connection with the Major Casualty or Major Condemnation as of the Lease Termination Date, the Lease shall not terminate until such later date as all Net Proceeds (other than those specifically relating to Tenant’s Loss) and the Remaining Rent are paid to Landlord). In addition, upon, and as a condition to, any termination of the Lease pursuant to a Termination Notice given under this Section 3.1(c), any Net Proceeds (other than those specifically relating to Tenant’s Loss), if any, payable to Tenant in connection with a Major Casualty or a Major Condemnation shall be paid and belong to the final payment due under Landlord and the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower Tenant shall pay to Lender all costs and expenses the Landlord on the Lease Termination Date the following: (i) in the event of Lender incurred in administering said rebuildinga Major Casualty, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender amount of any awarddeductible or self insured retention with respect to any insurance policies in place at the time of the casualty; (ii) all Rent accrued as of the Lease Termination Date, damage(iii) all other amounts then due and payable by the Tenant under this Lease (it being understood that this Lease shall not terminate until payment of all such sums to Landlord); and (iv) in the event of a Major Casualty, insurance proceeds, payment or other compensation. Subject all Rent owing hereunder with respect to the preceding provisions period from and after the Termination Date until the original expiration date of the Lease Term, including, but not limited to, all amounts owing on account of Impositions and Accrued Impositions (collectively, the “Remaining Rent”). Notwithstanding anything contained herein to the contrary, in the event of any termination of this Lease in connection with a Major Casualty, Tenant shall remain obligated to fund and pay to Landlord deficiencies in Net Proceeds in connection with the restoration of the Premises pursuant to Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower 3.2(g) and shall not be affected by any disability or incapacity suffered by Borrower subsequent promptly remit such amount to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforLandlord.
Appears in 1 contract
Condemnation and Casualty. Borrower If any condemnation, loss, damage by fire, or other casualty to any Storage Facility occurs prior to the Closing Date, Seller shall give Lender prompt written notice of the occurrence of to Buyer. If any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all any Storage Facility, or any part of the Property or for any damage or injury to it for any loss or diminution damage by fire or other casualty to any Storage Facility occurs prior to the Closing, which does not exceed the Materiality Limit, the Closing shall occur just as if such condemnation, loss, or damage had not occurred, and Seller shall assign to Buyer all of Seller’s interest in value of the Propertyany condemnation actions and proceeds, are hereby assigned or deliver to Buyer any and shall be all proceeds paid to Lender. Lender may participate in any suits Seller by Seller’s insurer with respect to such fire or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationother casualty; provided, however, that so long as no Event of Default is continuing, Lender Seller shall not participate in the adjustment of, and Borrower shall have the right be entitled to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any retain an amount of such insurance proceeds equal to be used to reimburse Borrower for the cost of restoring and Seller’s reasonable expenses, if any, incurred by Seller in repairing the Property to the equivalent of its condition immediately prior to the casualty ordamage caused by fire or other casualty. At Closing, in the case of condemnationa fire or other casualty, Seller shall give Buyer a credit on the Purchase Price equal to the lesser of the estimated cost of restoration or the amount of any deductible, unless Seller has repaired the damage caused by such fire or other casualty. Seller shall maintain “all risk” replacement value insurance coverage in place on the Property at all times prior to the Closing. In the event, prior to the Closing, of any condemnation of all or a part of any Storage Facility, or loss or damage by fire or other casualty to a condition approved by Lender Storage Facility, which exceeds the Materiality Limit, at Buyer’s sole option, either:
(the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (za) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, this Agreement shall terminate in accordance with Article 14 hereof if Buyer shall so notify Seller in writing within ten (10) days of Buyer receiving notice from Seller of the terms hereof, determines casualty or condemnation; or
(b) if Buyer shall not have timely notified Seller of its election to apply insurance or condemnation proceeds to Restoration, Lender shall do so terminate this Agreement in accordance with Lenderparagraph (a) above, the Closing shall occur just as if such condemnation, loss, or damage had not occurred, without reduction in the Purchase Price, and Seller shall assign to Buyer all of Seller’s then-current policies relating interest in any condemnation actions and proceeds or deliver to theBuyer any and all proceeds paid to Seller by Seller’s insurer with respect to such fire or other casualty; provided, as applicablehowever, restoration that Seller shall be entitled to retain an amount of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply such insurance proceeds equal to Seller’s reasonable expenses, if any, incurred by Seller in repairing the damage caused by such fire or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of other casualty. At Closing, less than forty percent (40%) of the Improvements have been damaged, or in the case of a takingfire or other casualty, less than twenty-five percent (25%) Seller shall give Buyer a credit on the Purchase Price equal to the lesser of the Improvements have been taken; (3) Lender determinesestimated cost of restoration or the amount of the deductible, in its discretionunless Seller has repaired the damage caused by such fire or other casualty. Notwithstanding anything contained herein to the contrary, that there the insurance proceeds to be credited or delivered to Buyer pursuant to this Article will be sufficient funds exclude business interruption or rental loss insurance proceeds, if any, allocable to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender period prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determinesClosing Date, in its discretion, that the rental income from the Property after completion of the Restoration which proceeds will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance retained by Seller. Any condemnation proceeds or business interruption or rental loss insurance referenced in Section 1.4(f) above will cover all payments due under proceeds received by Seller and allocable to the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during period on and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Closing Date shall be applied first delivered to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due dateBuyer. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, This provision shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforClosing.
Appears in 1 contract
Samples: Real Estate Purchase and Sale Agreement (Acadia Realty Trust)
Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not have the right to participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, of any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) if requested by Borrower and consented to by Lender, hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its original condition immediately prior to the casualty or, in the case of condemnation, or to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, pursuant to Borrower’s request and in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have has been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have improvements has been taken; (3) Lender determines, in its reasonable discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its reasonable discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its reasonable discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Anticipated Repayment Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; and (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides . Unless Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is otherwise agrees in full force and effectwriting, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof; provided that if Lender applies any awards or proceeds to the entire then-outstanding Obligations, any excess awards or proceeds after the satisfaction in full of the Obligations shall be paid to Borrower. Except as provided in the Note, partial Partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all reasonable costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Samples: Mortgage, Assignment of Leases and Rents and Security Agreement (Gsi Commerce Inc)
Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Default or Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, of any loss which is not in excess of less than the lesser of (ia) ten percent (10%) of the then outstanding principal balance of the Note and (iib) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (yi) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its original condition immediately prior or to the casualty or, in the case of condemnation, to a such other condition as may be approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a such other condition as may be approved by Lender, or (zii) apply the balance of such proceeds to the payment of the ObligationsDebt, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations Debt if all of the following conditions are met: (1A) no Default or Event of Default has occurred and is continuing; (2B) in the case of casualty, less than forty percent (40%) of the Improvements have has been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have has been taken; (3C) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4D) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves Reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for after Restoration will be the same as on the Closing Date and the ratio of the amount of the Loan to the value of the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the LoanClosing Date; (5E) Lender determines, in its discretion, that (A1) the Restoration will be completed before the earlier of (ia) one year before the Scheduled Maturity Date of the Note or (iib) one year after the date of the loss or casualty casualty, and (B2) the rent loss insurance or business interruption insurance referenced in Section 1.4(f4.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6F) the Ground Lease shall remain in full force and effect during the completion of the Restoration; (G) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.44.4; and (7H) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is . Unless Lender otherwise agrees in full force and effectwriting, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any insurance or condemnation awards or proceeds to the Obligations Debt shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any insurance or condemnation awards or proceeds as Lender may require. Any reduction in the Obligations Debt resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations Debt and, in any event, the unpaid portion of the Obligations Debt shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial Partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final principal payment due under the Note and thereafter to other principal installments due under the Note in the inverse order of their due date. If Borrower elects to effect or is otherwise required to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the that Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations Debt is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this sectionSection 4.7, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor. Notwithstanding the foregoing provisions of this Section 4.7, if (I) Lender is a REMIC at the time when any portion of the Property is the subject of a taking, condemnation, eminent domain or similar proceeding, and (II) immediately after giving effect to the related release (and taking into account any proposed Restoration), the loan-to-value ratio (based solely on the value of real property, and excluding any personal property and/or going concern value, if any) shall be greater than one hundred twenty-five percent (125%), then an amount equal to the entire net proceeds (as defined in Revenue Procedure 2010-30) of the taking, condemnation, eminent domain or similar proceeding must be applied to the principal amount of the Debt (rather than to any other portion of the Debt) if and to the extent necessary for the Loan to remain a “qualified mortgage” in accordance with the requirements applicable to a REMIC under Revenue Procedure 2010-30.
Appears in 1 contract
Condemnation and Casualty. Borrower (a) Lessor and Lessee shall give Lender prompt written notice cooperate with each other and both shall have the right to participate in negotiations or proceedings to determine the amount of the occurrence award in any condemnation proceeding with respect to the Premises, or to determine the amount of the insured loss or recovery in negotiations or proceedings with insurance carriers.
(b) In the event that less than all of the Premises are taken, requisitioned or sold in, or on account of any casualty (other than a de minimus casualty) affectingactual or threatened condemnation proceeding, Lessee shall be obligated, unless this Lease is terminated or Lessee purchases the institution Premises in accordance with paragraph 13(c), to promptly commence and diligently complete the repair and restoration of any proceedings for eminent domain or for the condemnation ofPremises so that upon completion, the Property or any portion thereof. All insurance proceeds on Premises will constitute a complete architectural unit, with an appearance, character and commercial value as nearly as practicable equal to the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned Premises immediately prior to and the taking. There shall be paid no abatement of Basic Rent during the first three Lease Years as a result of any taking during the first three Lease Years. Beginning with the fourth Lease Year of the Primary Term and during the remainder of the Primary Term and any Extended Term, there shall be an abatement of Basic Rent payable hereunder after such taking in an amount equal to Lender. Lender may participate the product of the Basic Rent applicable immediately prior to such taking, multiplied by a fraction, the numerator of which is the reduction in any suits or proceedings relating to any such proceeds, causes Fair Market Value of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of actionthe Premises resulting from the taking, and the denominator of which is the Fair Market Value of the Premises immediately prior to settle or compromise any claim or cause of action such taking. In the event the parties cannot agree on such Fair Market Values within sixty (60) days after such taking, such Fair Market 18 Values shall be determined by appraisal in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationthe manner set forth in Paragraph 15(d) hereof; provided, however, that so long quarterly installments of Basic Rent shall never be reduced by such abatement by an amount more than the reduction, if any, in quarterly principal and interest payable to Mortgagee under the Mortgage Note ("Debt Service") as such Debt Service may be reduced by the Mortgagee following application of all or a portion of the condemnation award in reduction of the indebtedness secured by the Mortgage. In no Event event shall there be an abatement of Default any Additional Rent, or an abatement of Lessee's obligation to carry and pay for insurance on the Premises as required herein. Subject to the provisions of the Mortgage, Lessee shall be reimbursed for its actual costs of repair and restoration to the extent of the net proceeds of the award received on account of such taking. If the condemnation award is continuinginadequate (after the payment of all out-of-pocket costs, Lender including attorney fees, incurred in connection with such award) to reimburse Lessee for such repair and restoration costs, Lessee shall not participate in pay any additional amounts required from its own funds, such additional amounts to be paid to the adjustment of, relevant contractors and Borrower shall have materialmen prior to disbursement of any part of the right to directly receive net proceeds with respect to, any loss which is not of the award. If such repair and restoration involves estimated costs in excess of 5% of the lesser then market value of the Improvements (based upon Lessee's good faith estimate of such market value) or structural changes to the Improvements, Lessee shall conduct such repair or restoration in compliance with the provisions of Paragraph 11 of this Lease. If the portion of the estimated cost of repair and restoration under this Paragraph 13(b) not covered by a condemnation award exceeds 10% of the then market value of the Improvements (based upon Lessee's good faith estimate of such market value), and Lessor so requests, Lessee shall obtain and furnish to Lessor a performance and payment bond with a corporate surety in an amount not less than such portion of costs not covered by such award. Subject to the rights of Mortgagee, and to the extent available after payment of out-of-pocket costs as provided above and after Lessee's costs of repair or restoration have been reimbursed, Lessor shall apply so much of any unexpended condemnation award in reduction of the Mortgage balance as is necessary to reduce the re-amortized debt service on the Mortgage by the same amount as Basic Rent abates under the foregoing formula. Any portion of an award not required for such purposes shall belong to Lessor.
(c) In the event all of the Premises, or so much thereof, in Lessee's good faith judgment, as to cause the portion of the Premises not taken to be unsuitable for Lessee's purposes, even after restoration and repair, are permanently taken, requisitioned or sold in, or on account of, any actual or threatened condemnation proceeding, then Lessee shall, not later than 30 days after such taking, deliver to Lessor (i) ten percent notice of its intention to terminate this Lease on the next Payment Date (10%the "Termination Date") which occurs after the later of (A) not less than 4 months after the delivery of such notice and (B) 10 days after final payment of the then outstanding principal balance of the Note condemnation award and (ii) $500,000.00. Except as provided a certificate of Lessee stating that in the foregoing sentencegood faith judgment of Lessee's Board of Directors, Lender maysuch taking has rendered the Premises unsuitable for restoration for continued use and occupancy in Lessee's business. If the Termination Date occurs during the Primary Term, such notice shall be accompanied by an irrevocable offer to purchase any remaining portion of the Premises and the net proceeds of the condemnation award on the Termination Date, at Lender’s optiona price equal to the then unpaid principal balance of, and accrued interest on the Mortgage and all other indebtedness secured by the Mortgage (yor, if the purchase occurs during any unexpired redemption period from foreclosure of the Mortgage, the amount required for redemption) hold plus Lessor's Equity (as defined in Paragraph 13(f)) as of the balance purchase date. If either:
(1) Lessor shall reject such offer by notice given to Lessee not later than the 5th day prior to the Termination Date or (2) the Termination Date occurs during an Extended Term, this Lease shall terminate on the Termination Date except with respect to obligations and liabilities of Lessee hereunder, actual or contingent, which have arisen on or prior to the Termination Date, upon payment by Lessee of all Basic Rent, Additional Rent and other sums then due and payable hereunder to and including the Termination date, and the net proceeds of the condemnation award shall belong to Lessor. Lessor may reject Lessee's offer to purchase only if the principal, accrued interest, prepayment premium and other indebtedness, if any, due under the Mortgage Note has been paid in full and, if the Mortgage has been foreclosed, the period of redemption has run, or the Mortgagee has consented in writing to Lessor's rejection of Lessee's offer to purchase and Lessor has purchased the fee interest in the Land from the Ground Lessor pursuant to Paragraph 28 of the Ground Lease. Unless Lessor shall have rejected such offer in accordance with this Paragraph 13(c), Lessor shall be conclusively presumed to have accepted such offer, and, on the Termination Date, shall convey Lessor's entire right, title and interest in the Premises to Lessee or its designee and shall assign to Lessee or its designee all Lessor's interest in the net proceeds of the condemnation award; and Lessee shall pay to Lessor the purchase price as above described; provided, that if the Mortgage has not been satisfied, the purchase price shall be paid to the Mortgagee to the extent necessary to satisfy the indebtedness secured thereby, and if the closing occurs during the period of redemption pursuant to foreclosure of the Mortgage, the purchase price shall be paid to the purchaser at foreclosure to the extent necessary to effect a redemption.
(d) Upon the occurrence of any partial or total loss, damage or destruction to the Premises, Lessee shall give written notice thereof to Lessor and promptly commence and shall diligently complete, or cause to be commenced and diligently completed, the repair and restoration of the Premises so that, to the extent possible, upon the completion of such repair or restoration the Improvements will constitute an entire architectural unit which will have a commercial value as nearly as practicable equal to the value of the Premises prior to the damage or loss. In all cases where the estimated costs of repair or restoration shall exceed 5% of the then market value of the Improvements (based upon Lessee's good faith estimate of such market value), Lessee shall submit plans and specifications to Lessor at least 10 days prior to beginning such repairs or restorations. If the loss, damage or destruction results from a casualty covered by a policy or policies of insurance, the insurance proceeds recovered shall, at the election of Lessee (subject to the provisions of the Mortgage), either (i) be used disbursed from time to time directly to contractors employed to repair or restore the Premises, or (ii) shall be paid to Lessee to reimburse Borrower it for its expenses incurred in repairing and restoring the Premises upon submission by Lessee of evidence of completion of and payment for such repair and restoration. In the event such proceeds are inadequate to reimburse Lessee for the cost of restoring and repairing the Property such repair or restoration, Lessee shall pay any additional amounts required from its own funds, such amounts to be paid to the equivalent relevant contractors and materialmen prior to disbursement of any of the insurance proceeds. If the portion of the estimated cost of such repair or restoration not covered by such proceeds shall exceed 10% of the then market value of the Improvements (based upon Lessee's good faith estimate of such market value), and Lessor so requests, Lessee shall obtain and furnish to Lessor a performance and payment bond with a corporate surety in an amount not less than such uninsured portion. Subject to the rights of the Mortgagee, any sums remaining after such repair or restoration shall be the property of Lessor.
(e) If a casualty of the nature referred to in Paragraph 13(d) shall affect all or a substantial portion of the Premises and shall, in Lessee's good faith judgment, render the Premises unsuitable for restoration and repair for continued use and occupancy for Lessee's purposes, then Lessee shall, not later than 30 days after such casualty, deliver to Lessor (i) notice of its condition immediately intention to terminate this Lease on the Casualty Termination Date (which "Casualty Termination Date" is defined as the next Payment Date which occurs after the later of (A) not less than four months after the delivery of such notice and (B) ten days after the date of final payment of the insurance proceeds), and (ii) a certificate of Lessee stating that in the good faith judgment of Lessee's Board of Directors, such casualty has rendered the Premises unsuitable for restoration and repair for continued use and occupancy in Lessee's business. If the Casualty Termination Date occurs during the Primary Term, such notice shall be accompanied by an irrevocable offer to purchase any remaining portion of the Premises and the net insurance proceeds, if any, on the Casualty Termination Date at a price equal to the then unpaid principal balance of, and accrued interest on, the Mortgage and all other indebtedness secured by the Mortgage (or, if the purchase occurs during any unexpired redemption period from foreclosure of the Mortgage, the amount required for redemption) plus Lessor's Equity (as defined in Paragraph 13(f)) as of the purchase date. If either (1) Lessor shall reject such offer by notice given to Lessee not later than the 5th day prior to the casualty orCasualty Termination Date or (2) the Casualty Termination Date occurs during an Extended Term, this Lease shall terminate on the Casualty Termination Date except with respect to obligations and liabilities of Lessee hereunder, actual or contingent, which have arisen on or prior to the Casualty Termination Date, upon payment by Lessee of all Basic Rent, Additional Rent and other sums then due and payable hereunder to and including the Casualty Termination Date, and the net insurance proceeds shall belong to Lessor. Lessor may reject Lessee's offer to purchase only if the principal, accrued interest, prepayment premium and other indebtedness, if any, due under the Mortgage Note have been paid in full and, if the Mortgage has been foreclosed, the period of redemption has run, or if the Mortgagee has consented in writing to Lessor's rejection of Lessee's offer to purchase and Lessor has purchased the fee interest in the case of condemnation, Land from the Ground Lessor pursuant to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment Paragraph 28 of the Obligations, whether or not then dueGround Lease. To the extent Lender, Unless Lessor shall have rejected such offer in accordance with this paragraph, Lessor shall be conclusively presumed to have accepted such offer, and, on the terms hereofCasualty Termination Date, determines shall convey Lessor's entire right, title and interest in the Premises to apply Lessee or its designee and shall assign to Lessee or its designee all Lessor's interest in the net insurance or condemnation proceeds proceeds; and Lessee shall pay to RestorationLessor the purchase price as above described; provided, Lender that if the Mortgage has not been satisfied, the purchase price shall do so in accordance with Lender’s then-current policies relating be paid to thethe Mortgagee to the extent necessary to satisfy the indebtedness secured thereby, and if the closing occurs during the period of redemption pursuant to foreclosure of the Mortgage, the purchase price shall be paid to the purchaser at foreclosure to the extent necessary to effect a redemption.
(f) Lessor's Equity", as applicableused in this Lease, restoration means the greater of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of sum of: (i) one year before Debt Service paid by Lessor to the Maturity Date Mortgagee during the first three Lease Years of the Note or Primary Term plus rent paid to the lessor under the Ground Lease during the first three Lease Years of the Primary Term, less Basic Rent paid by Lessee during said first three Lease Years; (ii) one year after the management fees and commissions owed through the purchase date whether paid or payable prior or subsequent to the Primary Term Commencement Date by Lessor to Hunter, Keith, Marshall & Eaton Incorporated, and in addition thereto, all other reaxxxxxxx feex, xxpenses and lease acquisition costs incurred by Lessor in connection with this 24 transaction through the Primary Term Commencement Date which are not defined as Project Costs in the Development Agreement; and (iii) interest at the rate of 8% per annum, compounded quarterly, on the total amount described in clauses (i) and (ii) from the date paid by Lessor until the Termination Date; reduced, however, by 1/26th of such sum for each elapsed year from the end of the loss or casualty third Lease Year to the Termination Date, and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion if there has been a foreclosure of the Restoration; (6) upon Lender’s requestMortgage and the period of redemption therefrom has expired without redemption, Borrower provides Lender evidence the amount which would have been required to redeem from the foreclosure sale at the end of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances thereforredemption period.
Appears in 1 contract
Samples: Operating Lease (Land O Lakes Inc)
Condemnation and Casualty. Borrower shall give Lender prompt written notice of the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with LenderLxxxxx’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Anticipated Balloon Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower Bxxxxxxx agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from LenderLxxxxx’s application of any sums received by it hereunder shall take effect only when Lender Lxxxxx actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by LenderLxxxxx, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking in accordance with the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower Bxxxxxxx agrees to execute and deliver from time to time such further instruments as may be requested by Lender Lxxxxx to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
Appears in 1 contract
Samples: Deed of Trust, Assignment of Leases and Rents and Security Agreement (Gladstone Commercial Corp)
Condemnation and Casualty. Borrower shall give Lender prompt written notice (a) Mortgagor irrevocably assigns to Mortgagee all awards, compensation or payments to which Mortgagor may become entitled by reason of its interest in the occurrence of any Property (i) if the Improvements or Chattels are damaged or destroyed by fire or other casualty or (other than a de minimus casualtyii) affecting, or the institution of any proceedings for eminent domain or for the condemnation of, if title to the Property or Chattels or any portion thereofpart thereof is taken in any eminent domain proceeding or other proceeding instituted by any person having the power of eminent domain. All insurance proceeds on awards, compensation and payments (which, less expenses of collecting the Propertysame, and all causes are herein called “Net Proceeds”) shall be applied pursuant to this Section 2.8. Mortgagor shall promptly give Mortgagee notice of action, claims, compensation, awards and recoveries for any damage, condemnation fire or other casualty or any proposed taking of all or any part portion of the Property or Chattels. Mortgagor shall cooperate with Mortgagee in the negotiation of any proceeding and the amount of any awards, compensation or payments and shall take any action relating thereto requested by Mortgagee. Mortgagor will permit Mortgagee, at Mortgagee's option (if no Event of Default has occurred, after consultation with Mortgagor), to conduct the adjustment of each such award, compensation or payment without the participation of Mortgagor. Mortgagor appoints Mortgagee as Mortgagor's attorney-in-fact, coupled with an interest, to obtain, adjust and settle each such for any damage award, compensation or injury payment and to it for any loss endorse in favor of Mortgagee all drafts and other instruments with respect thereto. This appointment, coupled with an interest, is irrevocable until this Mortgage is terminated by written instrument executed by an authorized office of Mortgagee.
(b) If the Property or diminution in value Chattels are destroyed or damaged by fire or other casualty, the Net Proceeds payable by reason of the Property, are hereby assigned to and casualty shall be paid to LenderMortgagee. Lender In its sole discretion, Mortgagee may participate in any suits or proceedings relating elect to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participation; provided, however, that so long as no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower shall have the right to directly receive proceeds with respect to, any loss which is not in excess of the lesser of (i) ten percent (10%) of apply the then outstanding principal balance of Net Proceeds to prepay the Note and (ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option, (y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”), and require Borrower to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration of casualty damage on similar properties or restoration or rebuilding of properties that have been the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualtyNote, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after hold the date of Net Proceeds in escrow, require Mortgagor to promptly repair the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds damage to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations andProperty and/or Chattels, in any eventa workmanlike manner, so as to restore the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, shall be applied first to the final payment due under the Note and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Mortgaged Property as nearly as possible to its valuecondition, condition use and character market value immediately prior to such casualty or partial taking in accordance with casualty, and release the foregoing provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.Net
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Samples: Open End Mortgage Deed, Security Agreement and Assignment (NorthStar Healthcare Income, Inc.)
Condemnation and Casualty. Borrower shall A. Franchisee shall, at the earliest possible time, give Lender prompt written Franchisor notice of any proposed taking by eminent domain. If the occurrence of any casualty (other than a de minimus casualty) affectingHotel is condemned, or such a substantial portion of the institution Hotel is condemned to render impractical the continued operation of any proceedings for eminent domain the Hotel in accordance with the System, this Agreement shall terminate upon notice by Franchisor or for Franchisee to the other party, and Franchisor and Franchisee shall share equitably in the condemnation of, the Property or any portion thereof. All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and recoveries for any damage, condemnation or taking of all or any part of the Property or for any damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any condemnation claim or cause of action, and to settle or compromise any claim or cause of action in connection therewith, and Borrower shall from time to time deliver to Lender any instruments required to permit such participationaward; provided, however, that so long as no Event of Default is continuingFranchisor’s portion shall be limited to compensating Franchisor for Franchisor’s lost royalty income, Lender which amount shall not participate exceed the amount of liquidated damages due under Section XVIII. If a non-substantial condemnation shall occur, then in such event, Franchisee shall promptly make whatever repairs and restoration may be necessary to make the adjustment ofHotel conform substantially to its former condition, character and appearance, according to plans and specifications approved by Franchisor, and Borrower the resumption of normal operation of the Hotel shall not be unreasonably delayed.
B. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Franchisee shall have the right to directly receive proceeds with respect toterminate this Agreement if it elects not to repair or rebuild the Hotel upon notice to Franchisor given within ninety (90) days of such closing of the Hotel; provided, however, if subsequent to such notice and prior to the date on which the term of this Agreement would otherwise have ended pursuant to Section II if such notice of termination had not been given (the “Term Expiration Date”), Franchisee, any loss of its members if it is a limited liability company or any of its affiliated companies or any company controlled by a controlling stockholder of Franchisee if Franchisee is a corporation, or any of its general partners or any entity in which Franchisee or any of its general partners (the “Franchisee Entity”), has a greater than fifteen percent interest in or operates a hotel: vacation, timesharing, interval or fractional ownership facility: condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated pursuant to a license or franchise from one of the Marriott Companies, then in excess such event, Franchisee shall be obligated to promptly pay to Franchisor an amount equal to the liquidated damages set forth at Paragraph XVIII.E. and the time element for calculating the amount of liquidated damages shall be the lesser of (a) thirty-six (36) months or (b) one-half (1/2) the number of months then remaining between (i) ten percent (10%) of the then outstanding principal balance of date upon which the Note Other Lodging Product is first operated by or for the Franchisee Entity and (ii) $500,000.00the Term Expiration Date. Except as provided in Franchisee’s obligation set forth herein shall survive termination of this Agreement pursuant to this Paragraph XIX.B.. In the foregoing sentence, Lender may, at Lender’s option, event the Hotel does not close for more than ninety (y90) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of restoring and repairing the Property to the equivalent of its condition immediately prior to the casualty or, in the case of condemnation, days due to a condition approved by Lender (the “Restoration”), and require Borrower casualty or Franchisee does not elect to restore the Property to the equivalent of its original condition or to a condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the Obligations, whether or not then due. To the extent Lender, terminate this Agreement in accordance with the terms hereof, determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in accordance with Lender’s then-current policies relating to the, as applicable, restoration provisions of casualty damage on similar properties or restoration or rebuilding of properties that have been this Paragraph XIX.B. the subject of a partial condemnation. Lender shall not exercise its option to apply insurance proceeds or condemnation proceeds to the payment of the Obligations if all of the following conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3) Lender determines, in its discretion, that there will be sufficient funds to complete the Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the Property after completion of the Restoration will be sufficient to meet all operating costs and other expenses, deposits to the Impound Account, deposits to reserves and loan repayment obligations relating to the Property and that the debt service coverage ratio for the Property after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines, in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year before the Maturity Date of the Note or (ii) one year after the date of the loss or casualty and (B) the rent loss insurance or business interruption insurance referenced in Section 1.4(f) above will cover all payments due under the Loan during the completion of the Restoration; (6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7) Borrower provides Lender with written notice within five business (5) days after settlement of the aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the Principal Lease is in full force and effect, the tenant under the Principal Lease does not have the right to terminate the Principal Lease due to such casualty or taking (as the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any right to terminate the Principal Lease as a result of such casualty or taking (as the case may be). Except as provided in the Note any application of any awards or proceeds to the Obligations shall not extend or postpone the due date of any monthly installments referred to in the Note or the Loan Documents or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in the Obligations resulting from Lender’s application of any sums received by it hereunder shall take effect only when Lender actually receives such sums and elects to apply such sums to the Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note, partial payments received by Lender, as described in the preceding sentence, Hotel shall be applied first to the final payment due under the Note promptly renovated and thereafter to installments due under the Note in the inverse order of their due date. If Borrower elects to effect reopened within a Restoration, Borrower shall promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose, restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to such casualty or partial taking reasonable time in accordance with the foregoing provisions System and Borrower shall pay pursuant to Lender all costs plans and expenses of Lender incurred specifications approved by Franchisor in administering said rebuilding, restoration or repair, provided accordance with Section VII. and the Lender makes such proceeds or award available for such purpose. Borrower agrees to execute and deliver from time to time such further instruments as may be requested by Lender to confirm the foregoing assignment to Lender of any award, damage, insurance proceeds, payment or other compensation. Subject Addendum attached hereto (to the preceding provisions extent Franchisor determines that such Addendum applies to reinstatement of this Section 1.7, Lender is hereby irrevocably constituted and appointed the attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be deemed coupled with an interest, shall survive Hotel after the voluntary or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent to the date hereofcasualty), with full power of substitution, subject to the terms of this section, to settle for, collect and receive any such awards, damages, insurance proceeds, payments or other compensation from the parties or authorities making the same, to appear in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
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