Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years. (b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require. (c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements. (d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information. (e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities. (f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 3 contracts
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Ashford Hospitality Trust Inc), Open End Mortgage, Security Agreement, Financing Statement and Assignment of Rents (Ashford Hospitality Prime, Inc.), Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Ashford Hospitality Trust Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender; provided, however, that the foregoing shall not apply to month-to-month agreements entered into with respect to the use of mini-storage facilities by Borrower in the ordinary course of business and on Borrower's standard form agreement. Borrower shall deliver copies of all Major Space Leases, amendments, modifications and renewals thereof to Lender. All proposed Major Space Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new commercial leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed tenant is unrelated to a tenant under an existing Lease; (ii) the proposed leases conform with the requirements of this Section 7.02; (iiiii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iiiiv) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten five (105) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any more than five percent (5%) of the Rents monthly Rent under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s 's interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s 's consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be treated by Borrower as trust funds and shall be held in accordance compliance with all Legal Requirements. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender's option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower's compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s Xxxxxx's request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by LenderXxxxxx shall, Borrower shall furnishupon request of Borrower, or shall cause the applicable lessee to furnishenter into a subordination, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, nondisturbance and attornment agreement ("SNDA") with respect to such lessee or any group each proposed tenant entering into a Lease in compliance with the requirements of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligorthis Security Instrument; provided, howeverthat such Lease is (i) for at least 5,000 square feet of space of the Premises, (ii) with a tenant reasonably approved by Xxxxxx in writing prior to Borrower's execution of any such Lease and (iii) on the standard form of Lease previously approved in writing by Xxxxxx. Any SNDA executed by Xxxxxx shall be on Xxxxxx's then standard form and provide that in the event Lender or any purchaser at foreclosure shall succeed to Xxxxxxxx's interest in the related Space Lease does not require Property, the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish Leases of such informationtenants will remain in full force and effect and be binding upon Lender or such purchaser and such tenant as though each were original parties thereto.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Borrower or Manager pursuant to the a management agreement to be approved by Lender Xxxxxx (the “"Management Agreement”"), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “"Manager Control Notice”") and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s 's gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice or (C) the date upon which the trailing twelve (12) month Aggregate Debt Service Coverage is equal to or less than 1.10:1.00, and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding Xxxxxxxx, subject to Xxxxxx's prior written approval, which may be given or withheld in Xxxxxx's sole discretion and which may be conditioned on, inter alia, a letter from the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on Rating Agency confirming that any rating issued by the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Xxxxxx's prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s 's compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender. Xxxxxx acknowledges that, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby grantedClosing Date, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken is self-managed by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinXxxxxxxx.
Appears in 2 contracts
Samples: Loan Agreement (U Haul International Inc), Borrowing Agreement (U Haul International Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, such approval not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender Lender, provided that: (i) the proposed leases conform with the applicable requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 15,000 square feet; . Lender’s consent to any Lease shall be deemed given, if the first correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY” and (iii) contains a bold-faced, conspicuous legend at the term top of the proposed lease inclusive first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Lender in writing prior to the expiration of all extensions such seven (7) Business Day period in order to adequately review the same has been delivered and, if Lender fails to respond or to expressly deny such request for approval in writing within the seven (7) Business Day period, a second notice is delivered to Lender from Borrower in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and renewals, Lender fails to respond or to expressly deny such request for approval within the three (3) Business Day period. In the event Lender does not exceed ten (10) yearsapprove a Space Lease, the approval of which has been requested by Borrower, Lender shall upon receipt of request by Borrower, give Borrower an explanation of why such consent was denied. In the event that all materials reasonably required by Lender in connection with the review and approval by Lender of a Space Lease are delivered to Lender simultaneously with Borrower’s original request for approval, Lender shall not disapprove a Space Lease based solely upon insufficient time to review such request.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or knowingly permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with (except as required pursuant to the Approved Manager Standardexpress terms of any existing Major Space Lease or Major Space Lease hereafter approved by Lender); (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall use commercially reasonable efforts to furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement reasonably approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice Notice, and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which may be given or withheld in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Lender hereby approves as of the date hereof Gxxxx & Exxxx Management Services, Inc., a Delaware corporation, Gxxxx & Exxxx Realty Advisers, Inc., a Delaware corporation, Gxxxx & Exxxx Company, a Delaware corporation or any Affiliate of any such entities that is controlled by or under common control with either Gxxxx and Exxxx Company or Gxxxx & Exxxx Realty Advisers, Inc. as Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Grubb & Ellis Co), Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Grubb & Ellis Co)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Ashford Hospitality Trust Inc), Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Ashford Hospitality Trust Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed tenant is unrelated to a tenant under an existing Lease; (ii) the proposed leases conform with the requirements of this Section 7.02; (iiiii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iiiiv) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten five (105) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Agreement of Consolidation and Modification of Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Morgans Hotel Group Co.), Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Morgans Hotel Group Co.)
Management of Property. (a) Borrower The Managing Co-Owner (defined below) shall manage the Property or cause the Property be responsible to be managed sign all documents and take all actions it deems necessary and appropriate in a manner which is consistent its sole discretion to deal with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates Lender and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not Tenants in Common to be unreasonably withheld or delayed, (ii) after Borrower has knowledge in compliance with all of a fifty percent (50%) or more change in control of Lender’s operational requirements under the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (Mortgage Loan Documents including, but not limited to, Manager’s gross negligencethe requirements concerning annual property inspections and reports, misappropriation collection of fundsloan impounds, willful misconduct or fraud) following the occurrence of an Event of Default maintenance and repair of the type Property, coordination of any late loan payments and other loan coordination and servicing requirements. For such purposes, the Managing Co-Owner is hereby granted an irrevocable power-of-attorney to deal with Lender on matters relating to the operation and maintenance of the Property. The “Managing Co-Owner” shall be MDR Hanover Square, LLC.
(i) The Managing Co-Owner shall oversee and supervise the Property Manager.
(ii) The Managing Co-Owner shall be the only party to whom the Lender is required to send notices except as otherwise may be required by law.
(b) The Property Manager must at all times be a “Qualifying Manager” as set forth in Section 13.01(abelow. To be eligible, the Qualifying Manager must meet the following requirements:
(i) through (c), or (B) to the extent provided The Qualifying Manager must be a reputable management company having at least five years’ experience in the Management Agreementmanagement of commercial properties and in the metropolitan area or other appropriate geographic area in which the Property is located;
(ii) The Qualifying Manager must be approved by Lender (which such approval may, following the at Lender’s option, be conditioned upon Lender’s receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoingRating Agency Confirmation, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market as such term is defined in the normal course of business and not in connection Mortgage Loan Documents, with a tender offer or sale of Manager or substantially all regard to both the identity of the assets of proposed Property Manager shall and the replacement management agreement pursuant to which such Property Manager will be employed); and
(iii) The Qualifying Manager must not require be the giving subject of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that bankruptcy or similar insolvency proceeding.
(c) The Lender and any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term servicer of the Loan worker’s compensation insurance as required has the right to participate by Governmental Authoritiestelephone in any regular, special or called meetings of the Tenants in Common.
(fd) Borrower Each Tenant in Common shall not enter into any new or replacement Franchise Agreement without obtaining execute an investor certificate, which provides the prior written consent Managing Co-Owner with an irrevocable power of Lender, such consent not attorney to be unreasonably withheld, conditioned or delayed correspond with (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunderand receive correspondence from) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed /servicer on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender each Tenant in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinCommon.
Appears in 2 contracts
Samples: Tenants in Common Agreement (Medalist Diversified REIT, Inc.), Tenants in Common Agreement (Medalist Diversified REIT, Inc.)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. The Manager (other than Borrower) shall at all times meet the Minimum Manager Credentials. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-arm’s length transactions. All Space Leases entered shall be on a form previously approved by Lender with such commercially reasonable changes as are consistent with the standards of other similarly situated owners when compared with terms and conditions of leases in similarly situated shopping centers in similar context at the time in question, taking into after account, inter alia, the date hereof type, creditworthiness and bargaining power of the prospective tenant and the location and size of the space covered by the proposed Lease, and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Space Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned withheld or delayed, provided, however that Borrower may enter into new leases Space Leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease Lease, together with any other space leased or to be which is leased to the proposed tenant or an Affiliate of the tenant thereunder thereof, does not exceed 10,000 7,500 square feet; and (iii) the term of the proposed lease does not exceed five (5) years and, inclusive of all extensions and renewals, does not exceed ten (10) years. Lender’s consent to any Lease shall be deemed given, if the first correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Lender in writing prior to the expiration of such ten (10) Business Day period in order to adequately review the same has been delivered and, if Lender fails to respond or to expressly deny such request for approval in writing within the ten (10) Business Day period a second notice is delivered to Lender from Borrower in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly deny each request for approval within the five (5) Business Day period.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance (A) such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing marketmarket and (B) all rent deemed “additional rent” under the Leases); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Space Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a any manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the reasonable request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Following Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the occurrence and during foregoing. During the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by LenderLender shall, Borrower shall furnishupon request of Borrower, or shall cause the applicable lessee to furnishenter into a subordination, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, nondisturbance and attornment agreement (“SNDA”) with respect to each proposed tenant entering into a Lease in compliance with the requirements of this Security Instrument provided that such lessee or any group of affiliated lessees, Lease is (i) with a concentration within all tenant occupying at least 7,500 square feet of the mortgage loans included Premises or expected is with an existing tenant pursuant to a Lease dated prior to the Closing Date which provides that the tenant thereunder is entitled to an SNDA or with any tenant which is renting space on a national basis which leases at least 2,000 square feet of the Premises, (ii) with a tenant reasonably approved by Lender in writing prior to Borrower’s execution of any such Lease and (iii) on the standard form of Lease previously approved in writing by Lender with such commercially reasonable changes as are consistent with the Approved Manager Standard. Any SNDA executed by Lender shall be included, in Lender’s then standard form with such changes as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, Lender shall agree to and provide that in the event Lender or any purchaser at foreclosure shall succeed to Borrower’s interest in the related Space Lease does not require Property, the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish Leases of such information.tenants will remain in full force and effect and be binding upon Lender or such purchaser and such tenant as though each were original parties thereto
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Borrower in accordance with Borrower’s organizational documents or by a Manager pursuant to the a management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement (or in the case Borrower is acting as Manager, Borrower’s right to manage the Property) may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and Notice, or (C) the date upon which the Debt Service Coverage is 1.05:1.0 or less. In the event of any such termination, a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which may be given or withheld in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an Approved a reputable management company which meets the Minimum Manager Credentials and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Lightstone Value Plus Real Estate Investment Trust, Inc.), Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, Lender (which approval shall not to be unreasonably withheld, conditioned withheld or delayed), provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed tenant is unrelated to a tenant under an existing Lease; (ii) the proposed leases conform with the requirements of this Section 7.02; (iiiii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iiiiv) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten five (105) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the material terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which could reasonably be expected to have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement agreements approved by Lender, which approval Lender shall not unreasonably withhold or delay (the each, a “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control Control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence and during the continuance of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which approval Lender shall not unreasonably withhold or delay, but which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Morgans Hotel Group Co.), Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Morgans Hotel Group Co.)
Management of Property. (a) Borrower Mortgagor shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. The Manager (other than Mortgagor) shall at all times meet the Minimum Manager Credentials. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-arm’s length transactions. All Space Leases entered shall be on a form previously approved by Lender with such commercially reasonable changes as are consistent with the standards of other similarly situated owners when compared with terms and conditions of leases in similarly situated industrial centers in similar context at the time in question, taking into after account, inter alia, the date hereof type, creditworthiness and bargaining power of the prospective tenant and the location and size of the space covered by the proposed Lease, and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower Mortgagor shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Space Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned withheld or delayed, provided, however that Borrower Mortgagor may enter into new leases Space Leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease Lease, together with any other space leased or to be which is leased to the proposed tenant or an Affiliate of the tenant thereunder does thereof, is not exceed 10,000 square feeta Major Space Lease; and (iii) the term of the proposed lease does not exceed six (6) years and, inclusive of all extensions and renewals, does not exceed ten (10) years. Lender’s consent to any Lease shall be deemed given, if the first correspondence from Mortgagor to Lender requesting such approval is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Lender in writing prior to the expiration of such five (5) Business Day period in order to adequately review the same has been delivered and, if Lender fails to respond or to expressly deny such request for approval in writing within the five (5) Business Day period a second notice is delivered to Lender from Mortgagor in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly deny each request for approval within the five (5) Business Day period.
(b) Borrower Mortgagor (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower Mortgagor shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower Mortgagor may collect in advance (A) such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing marketmarket and (B) all rent deemed “additional rent” under the Leases); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Space Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a any manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the reasonable request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Mortgagor as trust funds, shall not be commingled with any other funds of Mortgagor and, if cash, shall be deposited by Mortgagor in accordance with all the Security Deposit Account. Any bond or other instrument which Mortgagor is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Following Mortgagor shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Mortgagor’s compliance with the occurrence and during foregoing. During the continuance of any Event of Default, Borrower Mortgagor shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by LenderLender shall, Borrower shall furnishupon request of Mortgagor, or shall cause the applicable lessee to furnishenter into a subordination, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, nondisturbance and attornment agreement (“SNDA”) with respect to each proposed tenant entering into a Lease in compliance with the requirements of this Security Instrument provided that such lessee Lease is (i) with a tenant under a Major Space Lease at an Individual Property or is with an existing tenant pursuant to a Lease dated prior to the Closing Date which provides that the tenant thereunder is entitled to an SNDA or with any group of affiliated lessees, tenant which is renting space on a concentration within all national basis which leases at least 2,000 square feet of the mortgage loans included or expected Premises, (ii) with a tenant reasonably approved by Lender in writing prior to Mortgagor’s execution of any such Lease and (iii) on the standard form of Lease previously approved in writing by Lender with such commercially reasonable changes as are consistent with the Approved Manager Standard. Any SNDA executed by Lender shall be included, in Lender’s then standard form with such changes as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, Lender shall agree to and provide that in the event Lender or any purchaser at foreclosure shall succeed to Mortgagor’s interest in the related Space Lease does not require Property, the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish Leases of such informationtenants will remain in full force and effect and be binding upon Lender or such purchaser and such tenant as though each were original parties thereto.
(e) Borrower Mortgagor covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Mortgagor in accordance with Mortgagor’s organizational documents or by a Manager pursuant to the a management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower Mortgagor has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower Mortgagor will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement (or in the case Mortgagor is acting as Manager, Mortgagor’s right to manage the Property) may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and Notice, or (C) the date upon which the Debt Service Coverage is 1.10:1.0 or less. In the event of any such termination, a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding Mortgagor, subject to Lender’s prior written approval, which may be given or withheld in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower Mortgagor may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an Approved a reputable management company which meets the Minimum Manager Credentials and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower Mortgagor further covenants and agrees that Borrower Mortgagor shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 2 contracts
Samples: Mortgage and Security Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.), Mortgage and Security Agreement (Lightstone Value Plus Real Estate Investment Trust, Inc.)
Management of Property. (a) Borrower The Managing Co-Owner (defined below) shall manage the Property or cause the Property be responsible to be managed sign all documents and take all actions it deems necessary and appropriate in a manner which is consistent its sole discretion to deal with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates Lender and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not Tenants in Common to be unreasonably withheld or delayed, (ii) after Borrower has knowledge in compliance with all of a fifty percent (50%) or more change in control of Lender’s operational requirements under the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (Mortgage Loan Documents including, but not limited to, Manager’s gross negligencethe requirements concerning annual property inspections and reports, misappropriation collection of fundsloan impounds, willful misconduct or fraud) following the occurrence of an Event of Default maintenance and repair of the type Property, coordination of any late loan payments and other loan coordination and servicing requirements. For such purposes, the Managing Co-Owner is hereby granted an irrevocable power-of-attorney to deal with Lender on matters relating to the operation and maintenance of the Property. The “Managing Co-Owner” shall be MDR Greensboro, LLC.
(i) The Managing Co-Owner shall oversee and supervise the Property Manager.
(ii) The Managing Co-Owner shall be the only party to whom the Lender is required to send notices except as otherwise may be required by law.
(b) The Property Manager must at all times be a “Qualifying Manager” as set forth in Section 13.01(abelow. To be eligible, the Qualifying Manager must meet the following requirements:
(i) through (c), or (B) to the extent provided The Qualifying Manager must be a reputable management company having at least five years’ experience in the Management Agreementmanagement of commercial properties and in the metropolitan area or other appropriate geographic area in which the Property is located;
(ii) The Qualifying Manager must be approved by Lender (which such approval may, following the at Lender’s option, be conditioned upon Lender’s receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoingRating Agency Confirmation, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market as such term is defined in the normal course of business and not in connection Mortgage Loan Documents, with a tender offer or sale of Manager or substantially all regard to both the identity of the assets of proposed Property Manager shall and the replacement management agreement pursuant to which such Property Manager will be employed); and
(iii) The Qualifying Manager must not require be the giving subject of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that bankruptcy or similar insolvency proceeding.
(c) The Lender and any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term servicer of the Loan worker’s compensation insurance as required has the right to participate by Governmental Authoritiestelephone in any regular, special or called meetings of the Tenants in Common.
(fd) Borrower Each Tenant in Common shall not enter into any new or replacement Franchise Agreement without obtaining execute an investor certificate, which provides the prior written consent Managing Co-Owner with an irrevocable power of Lender, such consent not attorney to be unreasonably withheld, conditioned or delayed correspond with (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunderand receive correspondence from) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed /servicer on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender each Tenant in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinCommon.
Appears in 2 contracts
Samples: Tenants in Common Agreement (Medalist Diversified REIT, Inc.), Tenants in Common Agreement (Medalist Diversified REIT, Inc.)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates for comparable space in hotel properties and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditionsconditions for comparable space in hotel properties, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form reasonably acceptable to Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed five (5) years or, if all extensions and renewals are at the then prevailing market rates, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to materially impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all written notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performedperformed in all material respects; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any agreement pursuant to which uses all or any portion of any adjacent or adjoining property is adversely affected in such a manner as would have a Material Adverse Effect; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be held maintained in accordance with all full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender, which management agreement at present is that certain Hotel Operating Agreement between Kimpton Hotel & Restaurant Group, LLC, a Delaware limited liability company (“Kimpton”), as “Operator” and Borrower dated as of January 15, 2001, as the same may have been amended, modified or supplemented from time to time with the consent of Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause if Borrower has the right to terminate pursuant to the extent provided in provisions of the Management Agreement (including, but not limited to, as a result of Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the earlier to occur of (i) the later to occur of (a) sixty (60) days after the occurrence of an Event of Default of which Manager has been given notice or (b) from and after the type set forth occurrence of a Securitization, thirty (30) days following the transfer of the Loan to “special servicing” as provided in Section 13.01(athe pooling and servicing agreement, trust and servicing agreement or similar agreement entered into in connection with a Securitization and (ii) through (c)transfer of title to the Property by foreclosure or delivery of a deed in lieu thereof, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice (except to the extent the same would be an Approved Manager Transfer) and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which may not be unreasonably withheld and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving then current ratings thereof, qualified or withdrawn. Lender acknowledges that, as of a Manager Control Noticethe Closing Date, Kimpton is an acceptable manager. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Pebblebrook Hotel Trust)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases entered into after the date hereof shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arm’s length transactions or, with respect to Operating Leases, on terms which would be obtained in an arms-length transactionstransaction. All Space Leases entered into after the date hereof shall be on a form previously approved by Lender with such commercially reasonable changes as are consistent with the standards of other similarly situated owners when compared with terms and conditions of leases in similarly situated office buildings in similar context at the time in question, taking into account, inter alia, the type, creditworthiness and bargaining power of the prospective tenant and the location and size of the space covered by the proposed Lease, and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, Leases entered into after the Closing Date and amendments, modifications and renewals thereof of any Lease to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned withheld or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to a related tenant under an Affiliate of the tenant thereunder existing Lease does not exceed 10,000 30,000 square feet; and (iii) the term of the proposed lease lease, inclusive of all extensions and renewals, does not exceed ten (10) years. Lender’s consent to any Lease, amendment, modification, renewal or termination, if required pursuant to the terms of this Security Instrument, shall be deemed given if the first correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Lender in writing prior to the expiration of such seven (7) Business Day period and, if Lender fails to respond or to expressly deny such request for approval in writing within the seven (7) Business Day period, a second notice requesting approval is delivered to Lender from Borrower in an envelope marked “PRIORITY” containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly deny such request for approval within the three (3) Business Day period.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not, without Lender’s consent, which shall not be unreasonably withheld, delayed or conditioned, alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld withheld, delayed or delayedconditioned, except that no consent shall be required for modifications or amendments entered into in implementation of a right or option of the tenant under such Major Space Lease; (xi) shall not modify, alter or amend any Property Agreement without Lender’s consent, if such modification, alteration or amendment is reasonably likely to have a Material Adverse Effect; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held in accordance with all the Space Leases and applicable Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) Lender shall, upon request of Borrower and at Borrower’s sole cost and expense, enter into a subordination, nondisturbance and attornment agreement (“SNDA”) with any tenant under a Space Lease entered into in compliance with the requirements of this Security Instrument. Any SNDA executed by Lender shall be in Lender’s then standard form (with such reasonable and customary changes thereto as may be acceptable to Lender, acting reasonably and in good faith) which shall provide, among other things, that in the event Lender or any purchaser at foreclosure shall succeed to Borrower’s interest in the Property, the Space Lease with such tenant will remain in full force and effect and be binding upon Lender or such purchaser and such tenant as though each were original parties thereto.
(e) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, at Lender’s sole cost and expense, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing informationinformation or the relevant lessee defaults in its obligation to provide the same under its Space Lease, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Behringer Harvard Reit I Inc)
Management of Property. (a) From and after the Effective Date, Borrower shall manage the Property not enter into, or thereafter amend in any material manner or terminate, or cause Senior Borrower to enter into or thereafter amend in any material manner or terminate, any Major Agreement with respect to the Property Property, except upon thirty (30) days’ prior written notice to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to approval by Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to timely provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise such proposed Major Agreement. Any such proposed Major Agreement or Operating Lease, as applicable, such notice shall constitute full protection submitted to Lender for any action to be taken approval and not disapproved by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four ten (410) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and days after receipt thereof shall be deemed to be coupled approved by Lender. Without limiting in any way Lender’s approval rights with respect thereto, each proposed Major Agreement shall provide for fees, reimbursements or other payments by Borrower or Senior Borrower to the other party thereto at levels not in excess of applicable market levels.
(b) Notwithstanding the foregoing, for purposes of this Agreement, property management or leasing agreements entered into with CB Xxxxxxx Xxxxx, Inc., PM Realty Group, Transwestern, Xxxxxxx & Wakefield/Northmarq, Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxx LaSalle, or any other property or leasing manager of equivalent experience and reputation managing or leasing real properties similar to the Property, do not constitute Major Agreements provided such agreements provide for fees, reimbursements or other payments by Senior Borrower to the other party thereto at levels not in excess of applicable market levels. If Senior Borrower enters into such an interestagreement with any such party, providedBorrower shall within ten (10) days after entering into, howeveror modifying, that such agreement, notify Lender shall not exercise of such power event and provide Lender with a true and current copy of attorney unless and until Borrower fails to take such agreement or amendment, as the actions required hereincase may be.
Appears in 1 contract
Samples: Loan Agreement (KBS Strategic Opportunity REIT, Inc.)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, such approval not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender Lender, provided that: (i) the proposed leases conform with the applicable requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 25,000 square feet; . Lender’s consent to any Lease shall be deemed given, if the first correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY” and (iii) contains a bold-faced, conspicuous legend at the term top of the proposed lease inclusive first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN SEVEN (7) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Lender in writing prior to the expiration of all extensions such seven (7) Business Day period in order to adequately review the same has been delivered and, if Lender fails to respond or to expressly deny such request for approval in writing within the seven (7) Business Day period, a second notice is delivered to Lender from Borrower in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN THREE (3) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and renewals, Lender fails to respond or to expressly deny such request for approval within the three (3) Business Day period. In the event Lender does not exceed ten (10) yearsapprove a Space Lease, the approval of which has been requested by Borrower, Lender shall upon receipt of request by Borrower, give Borrower an explanation of why such consent was denied. In the event that all materials reasonably required by Lender in connection with the review and approval by Lender of a Space Lease are delivered to Lender simultaneously with Borrower’s original request for approval, Lender shall not disapprove a Space Lease based solely upon insufficient time to review such request.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or knowingly permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with (except as required pursuant to the Approved Manager Standardexpress terms of any existing Major Space Lease or Major Space Lease hereafter approved by Lender); (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall use commercially reasonable efforts to furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement reasonably approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice Notice, and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which may be given or withheld in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Lender hereby approves as of the date hereof Gxxxx & Exxxx Management Services, Inc., a Delaware corporation, Gxxxx & Exxxx Realty Advisers, Inc., a Delaware corporation, Gxxxx & Exxxx Company, a Delaware corporation or any Affiliate of any such entities that is controlled by or under common control with either Gxxxx and Exxxx Company or Gxxxx & Exxxx Realty Advisers, Inc. as Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Open End Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Grubb & Ellis Co)
Management of Property. (a) Borrower In the event that Pledgor fails to deposit sufficient funds to satisfy any demands, or whenever in Lender's sole and absolute discretion Lender considers it necessary, Lender may, without prior demand or notice, when and if Lender deems appropriate, notwithstanding any rule of any exchange, liquidate the portions in Pledgor's account(s), hedge and/or affect those positions in the cash market or otherwise, sell any property belonging to Pledgor's or in which Pledgor has any interest, cancel any open orders for the purchase and sale of any property, or borrow or buy any property, or borrow or buy any property required to make delivery against any sale, including a short sale. Such sale or purchase may be public or private and may be made without advertising or notice to Pledgors and in such manner as Lender may, in Lender's sole and absolute discretion, determine, and no demands, tenders or notices which Lender may make or give shall manage the Property or cause the Property invalidate Pledgor's aforesaid waiver. The proceeds of such transaction, if any are to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable applied to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with reduce any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted indebtedness owing by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable Pledgor to Lender. Notwithstanding the foregoing, Borrower may renew the Lender shall not sell or replace otherwise liquidate any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted property belonging to the extent necessary Pledgor unless (i) Pledgor defaults, as defined in the Promissory Note and Security and Pledge Agreement and fails to comply with cure such default within the then-current requirements applicable cure period; or (ii) the aggregate market value of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality pledged property is below 60% of the other provisions outstanding balance of this Security Instrument, and without waiving or releasing Borrower from any the loan. In the event Lender takes action in accordance with (ii) of its obligations hereunderthe previous sentence, Lender shall have the right, but simultaneously give Pledgor notice of such action. Pledgor shall be under no obligationentitled, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use at its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if anyto pledge additional property, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may additional property shall be exercised, unless Lender consents added to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact previously pledge property when computing the loan to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinvalue ratio.
Appears in 1 contract
Samples: Security and Pledge Agreement (Digital Solutions Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, Lender (which approval shall not to be unreasonably withheld, conditioned withheld or delayed), provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed tenant is unrelated to a tenant under an existing Lease; (ii) the proposed leases conform with the requirements of this Section 7.02; (iiiii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iiiiv) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten five (105) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the material terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which could reasonably be expected to have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement agreements approved by Lender, which approval Lender shall not unreasonably withhold or delay (the each, a “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control Control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence and during the continuance of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which approval Lender shall not unreasonably withhold or delay, but which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) There are no franchise agreements relating to the Property and Borrower shall not enter into any new franchise agreements relating to the Property.
(g) Borrower covenants that it shall not, nor permit Manager, to sell or replacement Franchise Agreement without obtaining deliver rooms or suites and accept payment therefor for more than thirty (30) days in advance of delivery except in the prior written consent ordinary course of LenderBorrower’s business and in accordance with the Approved Manager Standard.
(h) Borrower shall fund and operate, such consent not or shall cause Manager to be unreasonably withheldfund and operate, conditioned or delayed (provided that any Franchise Agreement which is on the Property in a form in all material respects (including, without limitation, all fees due thereunder) manner consistent with a hotel of the same type and category as the form Property.
(i) Borrower shall maintain or cause Manager to maintain Inventory in kind and amount sufficient to meet hotel industry standards for hotels comparable to the hotel located at the Premises and at levels sufficient for the operation of the hotel located at the Premises at historic occupancy levels.
(j) Borrower shall deliver to Lender all notices of default or termination received by Borrower or Manager with respect to any Franchise Agreement which licenses and permits, contracts, Property Agreements, Leases or insurance policies within three (3) Business Days of receipt of the same.
(k) If Borrower or SPE Pledgor is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form)a party to a Food and Beverage Lease/Operating Agreement, and Borrower and/or SPE Pledgor, as applicable, shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement the Food and Beverage Leases/Operating Agreements on the part of Borrower and the SPE Pledgor to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Leaseobserved, (iiiii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance under any Food and Beverage Lease/Operating Agreement of any which it is aware and (iii) diligently enforce all of the terms, covenants or conditions material obligations of the Food and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it Beverage Lessees/Operators under the Franchise Agreement or the Management Agreement or the Food and Beverage Leases/Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trustsAgreements. If Borrower or SPE Pledgor shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Food and Beverage Leases/Operating Lease Agreements on the part of such Borrower or SPE Pledgor to be performed or observedobserved beyond any applicable grace or cure period, then, without limiting the generality of the Lender’s other provisions of rights or remedies under this Security InstrumentInstrument or any other Loan Documents, and without waiving or releasing Borrower from any of its obligations hereunderhereunder or Borrower or the SPE Pledgor under the Food and Beverage Leases/Operating Agreements, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be reasonably appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or the Food and Beverage Leases/Operating Lease Agreements on the part of Borrower or SPE Pledgor to be performed or observed observed.
(l) Neither Borrower nor SPE Pledgor shall, and neither Borrower nor SPE Pledgor shall permit any other Person to (i) materially modify, or to renew or terminate or extend, any Food and Beverage Lease/Operating Agreement, transfer its interest in any Food and Beverage Lease/Operating Agreement or consent to the assignment of any Food and Beverage Lease/Operating Agreement, (ii) waive or release any of its rights under any Food and Beverage Lease/Operating Agreement or (iii) consent to any increase in its obligations under any Food and Beverage Lease/Operating Agreement, in each case without the express consent of Lender, which consent shall not be promptly performed or observed on behalf unreasonably withheld. Any action taken in violation of the foregoing without the prior express consent of Lender shall be void and of no force and effect.
(m) None of Borrower, SPE Pledgor nor any Affiliate of any Borrower or SPE Pledgor shall direct, solicit or otherwise collude to cause any Food and Beverage SPE Pledgor Distributions (as defined in the end that the rights Pledge Agreement of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated even date herewith given by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver SPE Pledgor to Lender a copy in connection with the origination of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action the Loan) to be taken by Lender applied, disbursed or remitted in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower manner inconsistent with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months and provisions of the last day upon which any such option may be exercised, unless Loan Documents and/or the payment instructions provided by Lender consents to the non-renewal of such Franchise Agreement in writing, each Food and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf Beverage Lessee/Operator. None of Borrower, which power SPE Pledgor nor any Affiliate of attorney Borrower or SPE Pledgor shall be irrevocable interfere with the application, disbursement or remittance of Food and Beverage SPE Pledgor Distributions as required under the terms and provisions of the Loan Documents and/or the payment instructions provided by Lender to each Food and Beverage Lessee/Operator. Borrower and each SPE Pledgor shall be deemed take all commercially reasonable steps necessary to cause all revenues of the Food and Beverage Lessees/Operators to continue to be coupled with an interestcollected by Borrower. None of Borrower, provided, however, that SPE Pledgor nor Affiliate of Borrower or SPE Pledgor shall revoke or attempt to revoke the payment instructions provided by Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereineach Food & Beverage Lessee/Operator.
Appears in 1 contract
Management of Property. (a) Borrower Grantor shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower Grantor shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower Grantor may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten five (105) years.
(b) Borrower Grantor (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower Grantor shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower Grantor may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Grantor as trust funds, shall not be commingled with any other funds of Grantor and, if cash, shall be deposited by Grantor in accordance with all the Security Deposit Account. Any bond or other instrument which Grantor is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Grantor shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Grantor’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower Grantor shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower Grantor shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower Grantor shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower Grantor covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement in the form approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower Grantor has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower Grantor will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding Grantor, subject to Lender’s prior written approval, which may be given or withheld in Lender’s sole discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower Grantor may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company with experience in managing properties similar to the Property and acceptable to the franchisor under the Franchise Agreement in its reasonable discretion which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower Grantor further covenants and agrees that Borrower Grantor shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (RLJ Lodging Trust)
Management of Property. (a) Borrower Advisor shall manage monitor the Property or cause the Property to be managed in a manner which is consistent tenants' compliance with the Approved Manager Standardterms of the applicable leases, including terms regarding maintenance of each Property. All Space Leases It is not generally expected that net lease assets require property managers. To the extent it becomes necessary, and subject to prior written approval by Notice from AGAR, Advisor shall provide select, arrange for, supervise and, if appropriate, replace third-party managing and leasing agents (selected for rental rates comparable to then existing their expertise in the local market rates area), mortgage brokers and agents engaged to assist with debt financing and independent contractors with respect to the maintenance, repair, operation and leasing of each Property, pursuant to contracts ("SERVICE CONTRACTS") containing such terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditionsas Advisor has recommended to AGAR. Except as otherwise provided herein, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property such Service Contracts shall be subject to the prior written approval approval, given by Notice of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements AGAR and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter entered into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option Advisor in the name of and upon on behalf of Borrower, which power of attorney AGAR. Property management fees shall be irrevocable competitive in the relevant local market, and Advisor shall review each property management arrangement no less frequently than once every two (2) years to confirm that the fees payable thereunder are competitive in the local market area. Payments for services rendered under the Service Contracts shall be the obligation of AGAR. Advisor shall supervise the administration of and performance of all work done under all Service Contracts and shall be deemed to be coupled monitor compliance of all service-providers with the terms and conditions of their respective Service Contracts, regardless of whether expenditures therefor are set forth in the applicable "ANNUAL BUDGET", as hereafter defined. In furtherance of the foregoing, AGAR must by Notice approve in writing and in advance all third party engagements for services which are not identified in previously approved Annual Budgets and/or which provide for payments in an interestamount which may exceed the approved guidelines in each Property's Annual Budget, provided, however, it being agreed that Lender shall not exercise such power the Annual Budget for each Property will contain cost and expenditure guidelines under which Advisor may enter into third-party service arrangements and Service Contracts without the further approval of attorney unless and until Borrower fails to take the actions required hereinAGAR.
Appears in 1 contract
Samples: Investment Advisory and Asset Management Agreement (Lexington Corporate Properties Trust)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with first-class management practices of properties similar to the Approved Manager StandardProperty in both type and location. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after shall be on a form previously approved by Lender subject to standard, tenant specific negotiated changes which do not, individually or in the date hereof aggregate, cause a material adverse effect with respect to the Property or Borrower and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to LenderInstrument. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, which shall not to be unreasonably withheld, conditioned withheld or delayed, conditioned; provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; and (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 75,000 square feet; . In the event that Xxxxxx's consent
for a Space Lease is required hereunder and Xxxxxx shall not advise Borrower of its objections to any proposed Space Lease, Xxxxxx's consent to any Space Lease shall be deemed given, if (iiiA) the term first correspondence from Borrower to Lender requesting such approval is in an envelope marked "PRIORITY" and contains a bold-faced, conspicuous legend at the top of the proposed lease inclusive first page thereof stating that "IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN", and is accompanied by the information and documents required above and any other information reasonably requested by Xxxxxx in writing prior to the expiration of all extensions and renewals, does not exceed such ten (10) yearsBusiness Day period in order to adequately review the same has been delivered and, (B) if Lender fails to respond or to expressly deny such request for approval in writing within the ten (10) Business Day period, a second notice is delivered to Lender from Borrower in an envelope marked "PRIORITY" requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that "IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN" and Lender fails to respond or to expressly deny such request for approval within the five (5) Business Day period.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, shall reasonably enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s 's interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s 's consent, which consent will not be unreasonably withheld withheld, conditioned or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds. Any bond or other instrument which Borrower is permitted to hold in accordance with all lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall, if permitted pursuant to Legal Requirements, be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower's compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s Xxxxxx's request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of this Security Instrument, the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved a Qualified Property Manager pursuant to the a management agreement approved by Lender Xxxxxx (the “"Management Agreement”"), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “"Manager Control Notice”") and (iii) the Management Agreement may be terminated by Lender Xxxxxx at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s 's gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) during the occurrence continuance of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice Notice, and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding Xxxxxxxx, subject to Xxxxxx's prior written approval, which may be given or withheld in Xxxxxx's sole discretion and which may be conditioned on, inter alia, a letter from the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on Rating Agency confirming that any rating issued by the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Xxxxxx's prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an Approved a Qualified Property Manager. In each case with respect to any new manager affiliated with Borrower and/or Guarantor, Borrower shall, if requested by Xxxxxx, also deliver a revised substantive non-consolidation opinion in form and substance satisfactory to Lender and any applicable Rating Agency. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s 's compensation insurance as required by Governmental Authorities.
(fe) If requested by Xxxxxx, Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lenderfurnish, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause the applicable tenant to be paid all sums required furnish, to be paid by Borrower under Lender financial data and/or financial statements in accordance with Regulation AB (as defined herein) for any Franchise Agreement and Operating Leasetenant of any Property if, (ii) diligently perform and observe in connection with a securitization, Lender expects there to be, with respect to such tenant or group of affiliated tenants, a concentration within all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower mortgage loans included or expected to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Leaseincluded, as applicable, in such notice shall securitization such that such tenant or group of affiliated tenants would constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement a Significant Obligor (as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, defined herein); provided, however, that Lender in the event the related lease does not require the related tenant to provide the foregoing information, Borrower shall not exercise use commercially reasonable efforts to cause the applicable tenant to furnish such power of attorney unless and until Borrower fails to take the actions required hereininformation.
Appears in 1 contract
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Parkway Properties Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Except for all Leases entered into after in existence prior to the date hereof Closing Date, all Leases shall be on a form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed tenant is unrelated to a tenant under an existing Lease; (ii) the proposed leases conform with the requirements of this Section 7.02; (iiiii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 one full floor with respect to 0000 Xxxxxxxxx Xxxxx or 5,000 square feetfeet with respect to retail space at the Property; and (iiiiv) the term of the proposed lease inclusive of all extensions and renewals, does not exceed five (5) years. Xxxxxx’s consent to any Lease shall be deemed given, if the first correspondence from Borrower to Lender requesting such approval is in an envelope marked “PRIORITY” and contains a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN TEN (10) BUSINESS DAYS, YOUR APPROVAL MAY BE DEEMED GIVEN”, and is accompanied by the information and documents required above and any other information reasonably requested by Xxxxxx in writing prior to the expiration of such ten (10) yearsBusiness Day period in order to adequately review the same has been delivered and, if Lender fails to respond or to expressly deny such request for approval in writing within the ten (10) Business Day period, a second notice is delivered to Lender from Borrower in an envelope marked “PRIORITY” requesting approval containing a bold-faced, conspicuous legend at the top of the first page thereof stating that “IF YOU FAIL TO RESPOND TO OR EXPRESSLY DENY THIS REQUEST FOR APPROVAL IN WRITING WITHIN FIVE (5) BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN” and Lender fails to respond or to expressly deny such request for approval within the five (5) Business Day period.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing marketmarket and operating expenses payable by tenants under the Lease terms); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations to the extent Borrower becomes aware of same or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon LenderXxxxxx’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Maguire Properties Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager StandardStandard or, if the State Street Lease is in full force and effect or if FPG is Manager, in a manner which is a commercially reasonable manner for properties similar to the Property. All Space Leases entered into after the Closing Date shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after shall be on a form substantially similar to the date hereof form previously approved by Lender and shall provide that they are subordinate to this Security Instrument and the Mortgage and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, Lender not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 50,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager StandardStandard or, if the State Street Lease is in full force and effect or FPG is Manager, in a manner which is a commercially reasonable manner for properties similar to the Property, enforce all of the material terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s 's interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager StandardStandard or, if the State Street Lease is in full force and effect, in a manner which is a commercially reasonable manner for properties similar to the Property or FPG is Manager; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager StandardStandard or, if the State Street Lease is in full force and effect or FPG is Manager, in a manner which is a commercially reasonable manner for properties similar to the Property, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s 's consent, which consent will not be unreasonably withheld withheld, conditioned or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other form, shall be held treated by Borrower as trust funds, shall not be commingled with any other funds of Borrower and, if cash, shall be deposited by Borrower in accordance with all the Security Deposit Account. Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be maintained in full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted.pursuant to Legal Requirements, at Lender's option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower's compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s 's request, if permitted by applicable Legal Requirements, turn tum over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Borrower, FPG or, if the State Street Lease is no longer in full force and effect, by Manager pursuant to the management agreement reasonably approved by Lender (the “"Management Agreement”"), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “"Manager Control Notice”") and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s 's gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c)Default, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender's prior written approval, not to be unreasonably withheld, conditioned or delayed and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving then current ratings thereof, qualified or withdrawn. Lender acknowledges that, as of a Manager Control Noticethe date hereof, FPG and State Street Corporation (or an Affiliate of State Street Corporation) are acceptable Managers of the Property. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender's prior written consent which consent shall not be unreasonably withheld, conditioned or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard or, if the State Street Lease is in full force and effect or FPG is Manager, in a manner which is a commercially reasonable manner for properties similar to the Property, and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s 's compensation insurance as required by Governmental Authorities.
(f) Borrower shall not Lender shall, upon request of Borrower, enter into any new or replacement Franchise Agreement without obtaining a subordination, nondisturbance and attornment agreement ("SNDA") with respect to each proposed tenant entering into a Lease in compliance with the prior written consent requirements of Lenderthis Security Instrument; provided, that such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which Lease is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay with a tenant occupying at least 10,000 square feet of non-retail space of the Premises or shall cause any retail space of the Premises or is with an existing tenant pursuant to be paid all sums required a Lease dated prior to be paid by Borrower under any Franchise Agreement and Operating Leasethe Closing Date which provides that the tenant thereunder is entitled to an SNDA, (ii) diligently perform and observe all of the material termsif Lender's approval is required hereunder, covenants and conditions with a tenant reasonably approved by Lender in writing prior to Borrower's execution of any Franchise Agreement on the part of Borrower to be performed such Lease and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part standard form of Borrower to be performed Lease previously approved in writing by Lender with such commercially reasonable changes as are consistent with the Approved Manager Standard or, if the State Street Lease is in full force and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement effect or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating LeaseifFPG is Manager, in any material respect, either orally or in writing, and Borrower hereby assigns a manner which is a commercially reasonable manner for properties similar to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Property. Any SNDA executed by Lender shall be void on Lender's then standard form with such changes as Lender shall, in its reasonable discretion, agree to and provide that in the event Lender or any purchaser at foreclosure shall succeed to Borrower's interest in the Property, the Leases of no such tenants will remain in full force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew effect and be binding upon Lender or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms purchaser and conditions such tenant as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise though each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinwere original parties thereto.
Appears in 1 contract
Management of Property. (a) From and after the Effective Date, Borrower shall manage not enter into, or thereafter amend in any material manner or terminate, any Major Agreement with respect to the Property Property, except upon thirty (30) days’ prior written notice to and approval by Administrative Agent. Borrower shall timely provide to Administrative Agent a copy of any such proposed Major Agreement; provided, upon the execution of any property management or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditionsleasing agreement, Borrower shall, and shall be arms-length transactionsuse diligent, good faith efforts to cause the property manager or leasing agent (as applicable) to, execute and deliver to Administrative Agent a subordination of property management or leasing agreement (as applicable) in the form previously agreed upon by Borrower and Administrative Agent or otherwise in form and substance reasonably acceptable to Administrative Agent. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to Any such proposed lease together with any space leased or Major Agreement submitted to be leased to an Affiliate of the tenant thereunder does Administrative Agent for approval and not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed disapproved by Administrative Agent within ten (10) yearsdays after receipt thereof shall be deemed to be approved by Administrative Agent. Without limiting in any way Administrative Agent’s approval rights with respect thereto, each proposed Major Agreement shall provide for fees, reimbursements or other payments by Borrower to the other party thereto at levels not in excess of applicable market levels.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers for purposes of publicly traded stock this Agreement, property management or leasing agreements entered into with CB Xxxxxxx Xxxxx, Inc., PM Realty Group, Transwestern, Xxxxxxx & Wakefield/Northmarq, Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxx LaSalle, or any other property or leasing manager of Manager on a national stock exchange equivalent experience and reputation managing or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time leasing real properties similar to time appoint a successor manager to manage the Property, do not constitute Major Agreements provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (agreements provide for fees, reimbursements or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid other payments by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights other party thereto at levels not in excess of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Leaseapplicable market levels. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if If Borrower enters into a new Franchise Agreement such an agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoingany such party, Borrower may renew shall within ten (10) days after entering into, or replace any Operating Leasemodifying, provided such renewal agreement, notify Administrative Agent of such event and provide Administrative Agent with a true and correct copy of such agreement or replacement shall be upon the same terms and conditions amendment, as the Operating Lease being renewed or replaced, except rent payable thereunder case may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinbe.
Appears in 1 contract
Samples: Loan Agreement (KBS Strategic Opportunity REIT, Inc.)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standard; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; and (xi) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits shall be held in accordance with all Legal Requirements. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an Event of Default of the type set forth in Section 13.01(a) through (c), or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager shall be appointed by Borrower. Notwithstanding the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not in connection with a tender offer or sale of Manager or substantially all of the assets of Manager shall not require the giving of a Manager Control Notice. Borrower may from time to time appoint a successor manager to manage the Property, provided that any such successor manager shall be an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any Franchise Agreement and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any Franchise Agreement on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel with respect to compliance by Borrower with the terms of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required herein.
Appears in 1 contract
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (Ashford Hospitality Trust Inc)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the Approved Manager Standard. All Space Leases shall provide for rental rates comparable to then existing local market rates for comparable space in hotel properties and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditionsconditions for comparable space in hotel properties, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall be on a form reasonably acceptable to Lender and shall provide that they are subordinate to this Security Instrument and that the lessees thereunder attorn to Lender. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be leased to an Affiliate of the tenant thereunder does not exceed 10,000 5,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed five (5) years or, if all extensions and renewals are at the then prevailing market rates, does not exceed ten (10) years.
(b) Borrower (i) shall or shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to materially impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all written notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, enforce all of the terms, covenants and conditions contained in the Leases to be observed or performedperformed in all material respects; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the Approved Manager Standard; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, make all reasonable efforts to seek lessees for space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any agreement pursuant to which uses all or any portion of any adjacent or adjoining property is adversely affected in such a manner as would have a Material Adverse Effect; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All Any bond or other instrument which Borrower is permitted to hold in lieu of cash security deposits under applicable Legal Requirements shall be held maintained in accordance with all full force and effect unless replaced by cash deposits as hereinabove described, shall be issued by a Person reasonably satisfactory to Lender, shall, if permitted pursuant to Legal Requirements, at Lender’s option, name Lender as payee or mortgagee thereunder or be fully assignable to Lender and shall, in all respects, comply with applicable Legal Requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the foregoing. Following the occurrence and during the continuance of any Event of Default, Borrower shall, upon Lender’s request, if permitted by applicable Legal Requirements, turn over the security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender, which management agreement at present is that certain Hotel Operating Agreement between Kimpton Hotel & Restaurant Group, LLC, a Delaware limited liability company (“Kimpton”), as “Operator” and Borrower dated as of June 14, 2001, as the same may have been amended, modified or supplemented from time to time with the consent of Lender (the “Management Agreement”), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “Manager Control Notice”) and (iii) the Management Agreement may be terminated by Lender at any time (A) for cause if Borrower has the right to terminate pursuant to the extent provided in provisions of the Management Agreement (including, but not limited to, as a result of Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) or at any time following (A) the earlier to occur of (i) the later to occur of (a) sixty (60) days after the occurrence of an Event of Default of which Manager has been given notice or (b) from and after the type set forth occurrence of a Securitization, thirty (30) days following the transfer of the Loan to “special servicing” as provided in Section 13.01(athe pooling and servicing agreement, trust and servicing agreement or similar agreement entered into in connection with a Securitization and (ii) through (c)transfer of title to the Property by foreclosure or delivery of a deed in lieu thereof, or (B) to the extent provided in the Management Agreement, following the receipt of a Manager Control Notice (except to the extent the same would be an Approved Manager Transfer) and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender’s prior written approval, which may not be unreasonably withheld and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving then current ratings thereof, qualified or withdrawn. Lender acknowledges that, as of a Manager Control Noticethe Closing Date, Kimpton is an acceptable manager. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender’s prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be an a reputable management company which meets the Approved Manager Standard and each Rating Agency shall have confirmed in writing that any rating issued by the Rating Agency in connection with a Securitization will not, as a result of the proposed change of Manager, be downgraded from the then current ratings thereof, qualified or withdrawn. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s compensation insurance as required by Governmental Authorities.
(f) There are no Franchise Agreements. Borrower shall will not enter into any new or replacement Franchise Agreement without obtaining the prior express written consent of Lender.
(g) Borrower covenants that it shall not, such consent not nor permit Manager, to be unreasonably withheldsell or deliver rooms or suites and accept payment therefor for more than thirty (30) days in advance of delivery except in the ordinary course of business and in a manner consistent with the Approved Manager Standard.
(h) Borrower shall fund and operate, conditioned or delayed (provided that any Franchise Agreement which is on shall cause Manager to fund and operate, the Property in a form in all material respects (including, without limitation, all fees due thereunder) manner consistent with a hotel of the same type and category as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall Property.
(i) pay Borrower shall maintain or shall cause Manager to be paid all sums required maintain Inventory in kind and amount sufficient to be paid by Borrower under any Franchise Agreement meet hotel industry standards for hotels comparable to the hotel located at the Premises and Operating Lease, (ii) diligently perform and observe all at levels sufficient for the operation of the material terms, covenants and conditions of any Franchise Agreement on hotel located at the part of Premises at historic occupancy levels.
(j) Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any Franchise Agreement and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and Franchise Agreement or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, report and estimate received by it under the Franchise Agreement or the Management Agreement or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheld, conditioned or delayed, surrender any Franchise Agreement or Operating Lease or terminate or cancel any Franchise Agreement or modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any Franchise Agreement or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any Franchise Agreement or Operating Lease in any respect, and any such surrender of any Franchise Agreement or termination, cancellation, modification, change, supplement, alteration or amendment of any Franchise Agreement or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any Franchise Agreement or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any Franchise Agreement or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower all written notices of default under any Franchise Agreement or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken termination received by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any Franchise Agreement such certificates of estoppel Manager with respect to compliance any licenses and permits, contracts, Property Agreements, Leases or insurance policies within three (3) Business Days of receipt of the same.
(k) Borrower shall not permit any Equipment or other personal property to be removed from the Property unless the removed item is consumed or sold in the ordinary course of business, removed temporarily for maintenance and repair, or, if removed permanently, replaced by an article of equivalent suitability and not materially less value, owned by Borrower with the terms free and clear of any Franchise Agreement as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any Franchise Agreement within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, provided, however, that Lender shall not exercise such power of attorney unless and until Borrower fails to take the actions required hereinlien.
Appears in 1 contract
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Pebblebrook Hotel Trust)
Management of Property. (a) Borrower shall manage the Property or cause the Property to be managed in a manner which is consistent with the by an Approved Manager StandardManager. All Space Leases shall provide for rental rates comparable to then existing local market rates and terms and conditions which constitute good and prudent business practice and are consistent with prevailing market terms and conditions, and shall be arms-length transactions. All Space Leases entered into after the date hereof shall provide that they are be subordinate to this Security Instrument by operation of law or pursuant to an SNDA executed by Lender and that the lessees thereunder attorn to Lendertenant under the applicable Lease. Borrower shall deliver copies of all Leases, amendments, modifications and renewals thereof to Lender. All proposed Leases for the Property shall be subject to the prior written approval of Lender, not to be unreasonably withheld, conditioned or delayed, provided, however that Borrower may enter into new leases with unrelated third parties without obtaining the prior consent of Lender provided that: (i) the proposed leases conform with the requirements of this Section 7.02; (ii) the proposed Space Lease is not a Major Space Lease and the space to be leased pursuant to such proposed lease together with any space leased or to be spaced leased to an any Affiliate of the tenant thereunder under such proposed lease does not exceed 10,000 square feet; and (iii) the term of the proposed lease inclusive of all extensions and renewals, does not exceed ten (10) yearsyears plus up to two (2) sixty (60) month option terms (or equivalent combination of renewals).
(b) Borrower (i) shall or observe and perform or, shall cause Operating Tenant to observe and perform all of its material obligations under the Leases pursuant to applicable Legal Requirements and shall not do or permit to be done anything to impair the value of the Major Space Leases as security for the Debt; (ii) shall promptly send copies to Lender of all notices of default which Borrower shall receive under the Major Space Leases; (iii) shall, consistent with the Approved Manager Standard, shall enforce all of the material terms, covenants and conditions contained in the Leases to be observed or performed; (iv) shall not collect any of the Rents under the Major Space Leases more than one (1) month in advance (except that Borrower may collect in advance such security deposits as are permitted pursuant to applicable Legal Requirements and are commercially reasonable in the prevailing market); (v) shall not execute any other assignment of lessor’s 's interest in the Leases or the Rents except as otherwise expressly permitted pursuant to this Security Instrument; (vi) shall not cancel or terminate any of the Leases or accept a surrender thereof in any manner inconsistent with the commercially reasonable standards exercised by Approved Manager StandardManagers; (vii) shall not convey, transfer or suffer or permit a conveyance or transfer of all or any part of the Premises or the Improvements or of any interest therein so as to effect a merger of the estates and rights of, or a termination or diminution of the obligations of, lessees thereunder; (viii) shall not alter, modify or change the terms of any guaranty of any Major Space Lease or cancel or terminate any such guaranty in a manner inconsistent with the Approved Manager Standardguaranty; (ix) shall, in accordance with the Approved Manager Standard, shall make all reasonable efforts to seek lessees for leasable space as it becomes vacant and enter into Leases in accordance with the terms hereof; (x) shall not cancel or terminate or materially modify, alter or amend any Major Space Lease or Property Agreement without Lender’s 's consent, which consent will not be unreasonably withheld or delayed; (xi) shall notify Lender promptly if any Pad Owner shall cease business operations or of the occurrence of any event of which it becomes aware affecting a Pad Owner or its property which might have any material effect on the Property; and (xixii) shall, without limitation to any other provision hereof, execute and deliver at the request of Lender all such further assurances, confirmations and assignments in connection with the Property as are required herein and as Lender shall from time to time reasonably require.
(c) All security deposits of lessees of the Property shall be held treated as trust funds and shall not be commingled with any other funds of Borrower, and, such deposits shall be deposited, upon receipt of the same by Borrower in accordance with all Legal Requirements. Following a separate trust account maintained by Borrower expressly for such purpose; provided, however, so long as such security deposits do not, in the occurrence and during aggregate exceed the continuance sum of $100,000 at any Event of DefaultCross-collateralized Property, Borrower shallshall not be required to treat such deposits at such Property as trust funds and may commingle such deposits. Within ten (10) Business Days after written request by Lender, upon Lender’s requestBorrower shall furnish to Lender reasonably satisfactory evidence of compliance with this Section 7.02(c), together with a statement of all security deposits securities deposited with Borrower by the lessees and, if permitted by applicable Legal Requirementssuch deposits exceed the sum of $100,000 in the aggregate at any Cross-collateralized Property, turn over the location and account number of the account in which such security deposits (and any interest thereon) to Lender to be held by Lender in accordance with the terms of the Leases and all Legal Requirementsare held.
(d) If requested by Lender, Borrower shall furnish, or shall cause the applicable lessee to furnish, to Lender financial data and/or financial statements in accordance with Regulation AB for any lessee of the Property if, in connection with a Securitization, Lender expects there to be, with respect to such lessee or any group of affiliated lessees, a concentration within all of the mortgage loans included or expected to be included, as applicable, in such Securitization such that such lessee or group of affiliated lessees would constitute a Significant Obligor; provided, however, that in the event the related Space Lease does not require the related lessee to provide the foregoing information, Borrower shall use commercially reasonable efforts to cause the applicable lessee to furnish such information.
(e) Borrower covenants and agrees with Lender that (i) the Property will be managed at all times by an Approved Manager pursuant to the management agreement approved by Lender (individually or collectively as the “context requires, the "Management Agreement”"), such approval not to be unreasonably withheld or delayed, (ii) after Borrower has knowledge of a fifty percent (50%) or more change in control of the ownership of Manager, Borrower will promptly give Lender notice thereof (a “"Manager Control Notice”") and (iii) the any Management Agreement may be terminated by Lender at any time (A) for cause to the extent provided in the Management Agreement (including, but not limited to, Manager’s gross negligence, misappropriation of funds, willful misconduct or fraud) following the occurrence of an uncured monetary Event of Default and acceleration of all amounts due under the type set forth in Section 13.01(aLoan, provided that there otherwise exists a right to terminate the Manager (after all applicable notice and cure periods) through (c), or (B) to the extent provided in under the Management Agreement, following the receipt of a Manager Control Notice and a substitute Approved Manager managing agent shall be appointed by Borrower. Notwithstanding , subject to Lender's prior written approval, which may be given or withheld in Lender's reasonable discretion and which may be conditioned on, inter alia, a letter from each Rating Agency confirming that any rating issued by the foregoing, transfers of publicly traded stock of Manager on a national stock exchange or on the NASDAQ Stock Market in the normal course of business and not Rating Agency in connection with a tender offer or sale of Manager or substantially all Securitization will not, as a result of the assets proposed change of Manager shall not require Manager, be downgraded from the giving of a Manager Control Noticethen current ratings thereof, qualified or withdrawn. Borrower may from time to time appoint a successor manager to manage the PropertyProperty with Lender's prior written consent which consent shall not be unreasonably withheld or delayed, provided that any such successor manager shall be a reputable management company which is an Approved Manager. Borrower further covenants and agrees that Borrower shall require Manager (or any successor managers) to maintain at all times during the term of the Loan worker’s 's compensation insurance as required by Governmental Authorities.
(f) Borrower shall not enter into any new or replacement Franchise Agreement without obtaining the prior written consent of Lender, such consent not to be unreasonably withheld, conditioned or delayed (provided that any Franchise Agreement which is on a form in all material respects (including, without limitation, all fees due thereunder) the same as the form of any Franchise Agreement which is contained in the uniform franchise offering circular for any Approved Franchisor shall be deemed an acceptable form), and shall (i) pay or shall cause to be paid all sums required to be paid by Borrower under any the Franchise Agreement Agreement, if any, and Operating Lease, (ii) diligently perform and observe all of the material terms, covenants and conditions of any the Franchise Agreement Agreement, if any, on the part of Borrower to be performed and observed to the end that all things shall be done which are necessary to keep unimpaired the rights of Borrower under any the Franchise Agreement Agreement, if any, and Operating Lease, (iii) promptly notify Lender of the giving of any notice to Borrower of any material default by Borrower in the performance or observance of any of the terms, covenants or conditions of and the Franchise Agreement Agreement, if any, or Operating Lease on the part of Borrower to be performed and observed and deliver to Lender a true copy of each such notice, and (iv) promptly deliver to Lender a copy of each financial statement, business plan, capital expenditures plan, notice, report and estimate received by it required to be delivered under the Franchise Agreement or the Management Agreement Agreement, if any, or the Operating Lease. Borrower shall not, without the prior consent of the Lender, such consent not to be unreasonably withheldsurrender the Franchise Agreement, conditioned or delayedif any, surrender any Franchise Agreement or Operating Lease or terminate or cancel any the Franchise Agreement Agreement, if any, or modify, change, supplement, alter or amend any the Franchise Agreement Agreement, if any, or Operating Lease, in any material respect, either orally or in writing, and Borrower hereby assigns to Lender as further security for the payment of the Debt and for the performance and observance of the terms, covenants and conditions of this Security Instrument, all the rights, privileges and prerogatives of Borrower to surrender any the Franchise Agreement Agreement, if any, or Operating Lease or to terminate, cancel, modify, change, supplement, alter or amend any the Franchise Agreement Agreement, if any, or Operating Lease in any respect, and any such surrender of any the Franchise Agreement Agreement, if any, or termination, cancellation, modification, change, supplement, alteration or amendment of any the Franchise Agreement Agreement, if any, or Operating Lease without the prior consent of Lender shall be void and of no force and effect, provided, however, Borrower may terminate any Franchise Agreement if Borrower enters into a new Franchise Agreement with an Approved Franchisor pursuant to a Franchise Agreement which is reasonably acceptable to Lender. Notwithstanding the foregoing, Borrower may renew or replace any Operating Lease, provided such renewal or replacement shall be upon the same terms and conditions as the Operating Lease being renewed or replaced, except rent payable thereunder may be adjusted to the extent necessary to comply with the then-current requirements of the Code for real estate investment trusts. If Borrower shall default in the performance or observance of any material term, covenant or condition of any the Franchise Agreement Agreement, if any, or Operating Lease on the part of Borrower to be performed or observed, then, without limiting the generality of the other provisions of this Security Instrument, and without waiving or releasing Borrower from any of its obligations hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all the terms, covenants and conditions of any the Franchise Agreement Agreement, if any, or Operating Lease on the part of Borrower to be performed or observed to be promptly performed or observed on behalf of Borrower, to the end that the rights of Borrower in, to and under any the Franchise Agreement and Operating Lease shall be kept unimpaired and free from default. Lender and any Person designated by Lender shall have, and are hereby granted, the right to enter upon the Property at any time and from time to time for the purpose of taking any such action. If the franchisor under any the Franchise Agreement Agreement, if any, or lessee under an Operating Lease shall deliver to Lender a copy of any notice sent to Borrower of default under any the Franchise Agreement Agreement, if any, or Operating Lease, as applicable, such notice shall constitute full protection to Lender for any action to be taken by Lender in good faith, in reliance thereon. Borrower shall, from time to time, use its best efforts to obtain from the franchisor or lessee under any the Franchise Agreement Agreement, if any, such certificates of estoppel with respect to compliance by Borrower with the terms of any the Franchise Agreement Agreement, if any, as may be requested by Lender. Borrower shall exercise each individual option, if any, to extend or renew the term of any the Franchise Agreement Agreement, if any, within four (4) months of the last day upon which any such option may be exercised, unless Lender consents to the non-renewal of such Franchise Agreement Agreement, if any, in writing, and Borrower hereby expressly authorizes and appoints Lender its attorney-in-fact to exercise any such option in the name of and upon behalf of Borrower, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest.
(g) Borrower shall fund and operate, providedor shall cause Manager to fund and operate, howeverthe Property in a manner consistent with a hotel of the same type and category as the Property and in compliance with any Franchise Agreement and Operating Lease.
(h) Borrower shall maintain or cause Operating Tenant to cause Manager to maintain Inventory in kind and amount sufficient to meet hotel industry standards for hotels comparable to the hotel located at the Premises and at levels sufficient for the operation of the hotel located at the Premises at historic occupancy levels.
(i) Borrower shall deliver to Lender all notices of default or termination received by Borrower, that Lender shall not exercise Operating Tenant or Manager with respect to any material licenses and permits, contracts, Property Agreements, Leases or insurance policies within three (3) Business Days of receipt of the same where such power of attorney unless and until Borrower fails to take the actions required hereindefault or termination could reasonably result in a Material Adverse Effect.
Appears in 1 contract
Samples: Mortgage, Security Agreement, Assignment of Rents and Fixture Filing (CNL Hotels & Resorts, Inc.)
