PARTIAL RELEASE OF PROPERTY. After the Effective Date, Borrower shall have the right to obtain from Lender a release of each individual Asset (the "Released Property") from the lien of the Security Instrument securing Borrower’s obligations under the Loan Documents in connection with the sale of any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor or any Guarantor with the Borrower in an arms‑length transaction, all upon satisfaction in full of each and all of the following conditions precedent: (a) Borrower shall deliver to Lender a written request (each, a “Release Notice”) for such partial release not later than thirty (30) days prior to the day on which Borrower desires such partial release to become effective (which notice may be revoked by Borrower at any time prior to Lender’s recordation of such partial release); (b) [Intentionally Omitted]; (c) No Default or Event of Default shall have occurred and be continuing either as of the date on which Borrower shall request such partial release and/or as of the effective date of such partial release; (d) Lender shall have been paid, in immediately available funds, all escrow, closing and recording costs; the costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the out-of-pocket costs incurred by Lender in verifying that all conditions precedent to the release of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance fee equal to Five Hundred Dollars ($500.00); (e) Except as set forth in Section 2.4(b), the greater of (x) 40% of the Net Sale Proceeds and (y) the applicable minimum release prices set forth in Exhibit D attached hereto (the “Release Prices”) for the Released Property shall have been paid to Lender as a partial repayment of the Loan. (f) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring that, after giving effect to such release, (x) the lien created hereby and insured under such title policy is a first priority lien on the remaining Properties subject only to original permitted exceptions applicable to the remaining Properties, and (y) the Title Policy is in full force and effect and unaffected by such release; (g) [Intentionally Omitted]; and (h) The Assets maintain (on a portfolio basis both before the release of the Released Property and after giving effect to the release of the Released Property) a “Loan-to-Value Ratio” of not more than 40%. Neither the acceptance of any payment or the issuance of any partial release by Lender shall affect the Borrower’s obligation to pay all amounts owing under this Agreement or the other Loan Documents or the lien of the Security Instrument on the remaining Assets. Lender shall use commercially reasonable efforts to cooperate with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, with respect to complying with any applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset in connection with the sale of any Asset (including, without limitation, Arizona Department of Real Estate regulations pertaining to residential, subdivided lot sales), it being acknowledged and agreed that Lender shall have no obligation whatsoever to incur any cost or expense or additional liability in connection with such commercially reasonable cooperation.
Appears in 2 contracts
Samples: Loan Agreement (IMH Financial Corp), Loan Agreement (IMH Financial Corp)
PARTIAL RELEASE OF PROPERTY. After the Effective Date, Borrower shall have the right to obtain from Lender a release of each individual Asset (the "Released Property") from the lien of the Security Instrument securing Borrower’s obligations under the Loan Documents in connection with the sale of any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor or any Guarantor with the Borrower in an arms‑length transaction, all upon satisfaction in full of each and all of the following conditions precedent:
(a) Borrower shall deliver From time to Lender a written request (eachtime Borrowers may request, a “Release Notice”) for such partial release upon not later less than thirty (30) days prior written notice to Administrative Agent, that a Property be released from the day on Lien created by the Security Document applicable thereto, which Borrower desires such partial release to become effective (which notice may the “Property Release”) shall be revoked effected by Borrower at any time prior to Lender’s recordation the Administrative Agent if the Administrative Agent determines all of the following conditions are satisfied as of the date of such partial releaseProperty Release:
(i) No Default or Potential Default exists or will exist immediately after giving effect to such Property Release by reason of the release of such Property;
(ii) After giving effect to such Property Release, the Aggregate Loan Commitment will be greater than or equal to $25,000,000 and not fewer than three Properties will remain encumbered by the Lien of the Security Documents (provided, for purposes of determining the number of Properties remaining encumbered, (i) the Gateway Center Property (if any portion of such Property remains encumbered at such time) may not be counted as one of the three required Properties and (ii) the I-81 Properties (or any portions thereof that remain encumbered by the Lien of the Security Documents) shall be deemed to be a single Property);
(biii) [Intentionally Omitted];
Borrowers shall confirm (cvia reasonable substantiating documentation) No Default or Event of Default shall have occurred and be continuing either as of the date on which Borrower shall request such partial release and/or as of the effective date of such partial release;
(d) Lender shall have been paid, in immediately available funds, all escrow, closing and recording costs; the costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the out-of-pocket costs incurred by Lender in verifying that all conditions precedent to the release satisfaction of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance fee equal to Five Hundred Dollars ($500.00);
(e) Except as set forth in Section 2.4(b), the greater of (x) 40% of the Net Sale Proceeds and (y) the applicable minimum release prices set forth in Exhibit D attached hereto (the “Release Prices”) for the Released Property shall have been paid to Lender as a partial repayment of the Loan.
(f) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring Administrative Agent that, after giving effect to such releasethe Property Release, Net Operating Income from the Properties remaining encumbered by the Lien of the Security Documents is sufficient to yield a Loan Constant which is not less than the Minimum Applicable Loan Constant;
(iv) If, after giving effect to the Property Release, (x) the lien created hereby and insured under such title policy is a first priority lien on the remaining Properties subject only to original permitted exceptions applicable to the remaining Properties, and Aggregate Loan Commitment would be less than $70,000,000 or (y) fewer than five (5) Properties would remain encumbered by the Title Policy is in full force and effect and unaffected Lien of the Security Documents (provided, for purposes of determining the number of Properties remaining encumbered, the I-81 Properties (or any portions thereof that remain encumbered by such releasethe Lien of the Security Documents) shall be deemed to be a single Property), the Loan-to-Value Percentage (which, if requested by Administrative Agent, shall be determined based on new Appraisals ordered by Administrative Agent at Borrowers’ expense (subject to Section 3.2 below)) shall not be greater than fifty percent (50%);
(gv) [Intentionally Omitted]; and
Borrowers shall confirm (hvia reasonable substantiating documentation) The Assets maintain (on a portfolio basis both before to the release satisfaction of the Released Property and Administrative Agent, that, after giving effect to the Property Release:
(A) not more than thirty-five percent (35%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the twelve month period following such Property Release; and
(B) not more than forty-five percent (45%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the twenty-four month period following such Property Release; and
(C) not more than fifty-five percent (55%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the thirty-six month period following such Property Release. Notwithstanding the foregoing, Borrowers shall be deemed to have satisfied the requirements of this clause (v) even if the percentage of Gross Rents derived from the remaining Properties exceeds the applicable thresholds so long as, after giving effect to the Property Release, the Adjusted Loan Constant (as defined in and calculated in accordance with Exhibit K) is greater than or equal to the Minimum Applicable Loan Constant.
(vi) Borrowers shall pay to Administrative Agent, for the benefit of Lenders, the applicable Release Price;
(vii) Borrowers shall pay to Administrative Agent any applicable Exit Fee; provided, however, that if, in connection with a proposed sale of a Property to an unaffiliated third-party purchaser, the release of the Released PropertyProperty in question would otherwise be prohibited by the provisions of subsection (v) above, then Borrowers shall be permitted, concurrently with the sale of such Property to the unaffiliated third-party purchaser, to obtain a “LoanProperty Release of such other Property as is necessary in order to satisfy the requirements of such subsection (v) above, without payment of an Exit Fee on the Release Price paid in connection with such additional Property (though Borrowers shall pay an Exit Fee with respect to the Release Price paid on the original Property conveyed to the unaffiliated third party purchaser); and provided further, that if, in connection with a proposed sale of a Property to an unaffiliated third-toparty purchaser the release of the Property in question would otherwise be prohibited by the provisions of subsection (iii), (iv) or (v) above, then Borrowers shall be permitted, concurrently with the sale of such Property to the unaffiliated third-party purchaser, to repay principal in order to comply with such subsection without payment of an Exit Fee with respect to the amount so repaid; and
(viii) Borrowers shall have delivered to Administrative Agent all documents and instruments reasonably requested by Administrative Agent in connection with such Property Release including, without limitation, the reconveyance or other instruments to be used to effect such Property Release and, if required by Administrative Agent and available, appropriate endorsements to the Title Policies in effect with respect to the remaining Properties.
(ix) If Guarantor has been released from liability under clause (h) of Section 1 of the Limited Guaranty referenced in Exhibit B, then after giving effect to the Property Release, the Par Loan Value Ratio” allocated to the Granite Tower Property shall not exceed fifty percent (50%) of the aggregate Par Loan Values of all Properties remaining encumbered by Security Documents; provided, however, that if following the applicable Property Release the foregoing condition would not more than 40%. Neither be satisfied, then Borrowers, at their election, may elect to either (A) cause the acceptance of any payment or the issuance of any partial release by Lender shall affect the Borrower’s obligation Granite Property to pay all amounts owing under this Agreement or the other Loan Documents or be released from the lien of the Security Instrument on the remaining Assets. Lender shall use commercially reasonable efforts to cooperate with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, with respect to complying with any Document applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset thereto in connection accordance with the sale terms of any Asset this Section 2.10 (includingprovided, without limitation, Arizona Department of Real Estate regulations pertaining to residential, subdivided lot sales), it being acknowledged and agreed that Lender Borrowers shall have no obligation whatsoever to incur any cost or expense or additional liability pay an Exit Fee with respect to the amount repaid by Borrowers in connection with such commercially reasonable cooperationProperty Release) or (B) cause Guarantor’s liability under clause (h) of Section 1 of the Limited Guaranty referenced in Exhibit B hereto to be reinstated.
(b) Provided the applicable Borrower does not own any Properties that will remain encumbered by the Lien of the Security Documents following the applicable Property Release, then concurrent with the release of a Property from the Lien created by the Security Document applicable thereto, the Borrower that owns the Property which is the subject of the Property Release shall be automatically released from any future obligations under this Agreement or any of the Loan Documents, excepting, however, any obligations that may arise under the Hazardous Materials Indemnity Agreement.
(c) If Administrative Agent elects to obtain Appraisals of the Properties as a condition to a Property Release (as permitted by this Section 2.10) and has either not received or not had an opportunity to review and approve the Appraisals, or if there is a dispute regarding the Appraisals, then:
(i) Borrowers shall be permitted to release the relevant Property from the Lien of the Security Documents, provided Borrowers deliver one hundred percent (100%) of the net proceeds from the sale of the relevant Property to Administrative Agent;
(ii) Administrative Agent shall hold such proceeds (net of the applicable Release Price which will first be deducted therefrom and applied in reduction of the outstanding principal balance of the Loan as contemplated herein above) in a separate interest-bearing account, with interest accruing for the benefit of Borrowers, which Borrowers hereby pledge as additional collateral for the Loan; and
(iii) Following Administrative Agent’s receipt, review and approval of the relevant Appraisal (or Appraisals):
(A) If the Appraisal(s) confirm that the relevant Property Release should not have been permitted, then (1) if such Property Release should not have been permitted due to Borrowers’ failure to meet a requirement of Section 2.10 that is susceptible to cure by repayment of a portion of the outstanding principal amount of the Loan, then Borrowers shall repay any amounts necessary to satisfy such requirement, but shall not be required to pay an Exit Fee with respect to such repayment and/or (2) if such Property Release should not have been permitted due to Borrowers’ failure to meet a requirement of Section 2.10 that is susceptible to cure by releasing an additional Property from the Lien of the Security Documents, then Borrowers shall be required to release such additional Property, which release shall be treated in the same manner as a Property Release under clause (a)(vii) above (i.e., no Exit Fee shall be due on account of such Property Release); and
(B) If (1) the Appraisal(s) confirm that Borrowers were entitled to the Property Release (i.e., Borrowers have satisfied all of the conditions to such Property Release set forth in Section 2.10) or (2) Borrowers subsequently satisfy the conditions set forth in Section 2.10 by releasing an additional Property or repaying a portion of the outstanding principal amount of the Loan in accordance with clause (A) above, then any sales proceeds remaining on deposit with Administrative Agent shall be released to Borrowers.
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust II, Inc.)
PARTIAL RELEASE OF PROPERTY. After the Effective Date, Borrower shall have the right to obtain from Lender a release of each individual Asset (the "Released Property") from the lien of the Security Instrument securing Borrower’s obligations under the Loan Documents in connection with the sale of any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor or any Guarantor with the Borrower in an arms‑length transaction, all upon satisfaction in full of each and all of the following conditions precedent:
(a) Borrower shall deliver From time to Lender a written request (eachtime Borrowers may request, a “Release Notice”) for such partial release upon not later less than thirty (30) days prior written notice to the day on Administrative Agent, that a Property be released from the Lien created by the Security Document applicable thereto, which Borrower desires such partial release to become effective (which notice may the “Property Release”) shall be revoked effected by Borrower at any time prior to Lender’s recordation the Administrative Agent if the Administrative Agent determines all of the following conditions are satisfied as of the date of such partial release);Property Release:
(b) [Intentionally Omitted];
(ci) No Default or Event of Potential Default shall have occurred and be continuing either as exists or will exist immediately after giving effect to such Property Release by reason of the date on which Borrower shall request such partial release and/or as of the effective date of such partial releaseProperty;
(dii) Lender Borrowers shall have been paid, in immediately available funds, all escrow, closing and recording costs; the costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the out-of-pocket costs incurred by Lender in verifying that all conditions precedent confirm to the release satisfaction of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance fee equal to Five Hundred Dollars ($500.00);
(e) Except as set forth in Section 2.4(b), the greater of (x) 40% of the Net Sale Proceeds and (y) the applicable minimum release prices set forth in Exhibit D attached hereto (the “Release Prices”) for the Released Property shall have been paid to Lender as a partial repayment of the Loan.
(f) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring Administrative Agent that, after giving effect to the Property Release, the Committed Loan Constant shall not be less than the Minimum Applicable Loan Constant. The Committed Loan Constant shall be determined by Administrative Agent with reference to the most recently delivered Borrowers’ Certificate, subject, however, to such releaseadjustments as Administrative Agent deems necessary in its reasonable discretion;
(iii) After giving effect to such Property Release, (x1) not more than thirty percent (30%) of the lien created hereby Gross Rental Income from all Properties is to be derived from Leases expiring between the date of the Property Release and insured under such title policy the date which is a first priority lien on twelve (12) months after the Property Release, (2) not more than forty percent (40%) of the Gross Rental Income from all Properties remaining encumbered by the Security Documents is to be derived from Leases expiring between the date of the Property Release and the date which is twenty-four (24) months after the Property Release and (3) not more than fifty percent (50%) of the Gross Rental Income from all Properties remaining encumbered by the Security Documents is to be derived from Leases expiring between the date of the Property Release and the date which is thirty-six (36) months after the Property Release. Notwithstanding the foregoing, Borrowers shall be deemed to have satisfied the requirements of this clause (iii) even if the percentage of Gross Rental Income derived from the remaining Properties subject only to original permitted exceptions exceeds the applicable to the remaining Propertiesthresholds so long as, and (y) the Title Policy is in full force and effect and unaffected by such release;
(g) [Intentionally Omitted]; and
(h) The Assets maintain (on a portfolio basis both before the release of the Released Property and after giving effect to the Property Release, the Adjusted Committed Loan Constant (calculated in accordance with Exhibit J) is greater than or equal to the Minimum Applicable Loan Constant;
(iv) Borrowers shall pay to Administrative Agent, for the benefit of Lenders, an amount (if any) sufficient to cause the outstanding principal balance of the Loan to be not greater than an amount equal to (1) Aggregate Commitment prior to the relevant Property Release minus (2) the Release Price for the Property being released;
(v) Borrowers shall pay to Administrative Agent any applicable Exit Fee; provided, however, that if, in connection with a proposed sale of a Property to an unaffiliated third-party purchaser the release of the Released PropertyProperty in question would otherwise be prohibited by the provisions of either subsections (ii) and/or (iii) above, then Borrowers shall be permitted, concurrently with sale of such Property to the unaffiliated third-party purchaser, to cancel a “Loan-to-Value Ratio” of not more than 40%. Neither the acceptance of any payment or the issuance of any partial release by Lender shall affect the Borrower’s obligation to pay all amounts owing under this Agreement or the other Loan Documents or the lien portion of the Security Instrument on the remaining Assets. Lender shall use commercially reasonable efforts Aggregate Commitment, and to cooperate repay principal, as applicable, in order to comply with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, such subsections without payment of an Exit Fee with respect to complying the amount so repaid (though Borrowers shall pay an Exit Fee with any applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset respect to the Release Price paid (if any) on the Property conveyed to the unaffiliated third party purchaser);
(vi) Borrowers shall have delivered to the Administrative Agent all documents and instruments reasonably requested by the Administrative Agent in connection with the sale of any Asset (such Property Release including, without limitation, Arizona Department the reconveyance or other instruments to be used to effect such Property Release and, if required by Administrative Agent and available, appropriate endorsements to the Title Policies in effect with respect to the remaining Properties.
(b) Provided the applicable Borrower does not own any Properties that will remain encumbered by the Lien of Real Estate regulations pertaining the Security Documents following the applicable Property Release, then concurrent with the release of a Property from the Lien created by the Security Document applicable thereto, Administrative shall release the Borrower that owns the Property which is the subject of the Property Release from any future obligations under this Agreement or any of the Loan Documents, excepting, however, any obligations that may arise under the Environmental Indemnity Agreement.
(c) Notwithstanding anything to residentialthe contrary in this Section 2.10, subdivided lot sales), it being acknowledged and agreed that Lender Borrowers shall have no obligation whatsoever the right to incur revoke a request for a Property Release at any cost or expense or additional liability in time prior to the consummation of such Property Release; provided, however, that upon request, Borrowers shall promptly reimburse Administrative Agent for any and all costs incurred by Administrative Agent relating to the requested and subsequently revoked Property Release.
(d) In connection with such commercially reasonable cooperationa Property Release, the Aggregate Commitment shall be reduced by the sum of (i) the applicable Release Price of the Property (or Properties) being released plus (ii) any amounts repaid in reduction of the outstanding principal balance of the Loan as permitted in this Section 2.10 (without duplication).
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust II, Inc.)
PARTIAL RELEASE OF PROPERTY. After (a) Upon satisfaction of all of the Effective Dateterms and conditions of this Section 2.14, Borrower shall have the right be entitled to request and obtain from Lender Administrative Agent the release from the lien and security interest of the Deed of Trust of one or more Properties, provided that the Borrower satisfies all of the following conditions:
(i) Each request by Borrower for the release of a Property shall be accompanied by a calculation of Loan Availability assuming that such Property is released which calculation shall be confirmed by Administrative Agent in its sole discretion.
(ii) Administrative Agent shall have received all information, documents and materials required by the Loan Documents or otherwise necessary for Administrative Agent to process Borrower’s request for a release, all reasonable costs and expenses of Administrative Agent associated with such release (including, but not limited to, legal fees relating thereto) and such title insurance endorsements as are reasonably required by Administrative Agent.
(iii) At the time of such release and as a condition precedent thereto, Borrower shall pay the excess of amounts outstanding under the Loan over such recalculated Loan Availability to Administrative Agent on behalf of the Lenders.
(iv) In no event shall Administrative Agent be obligated to approve and execute a release of each individual Asset a Property if, as a result thereof (the "Released Property"i) from the lien any single Property remaining after such release shall produce more than forty percent (40%) of the Security Instrument securing Adjusted NOI for all such Properties or (y) there shall be less than three (3) Properties serving as collateral for the Loan.
(b) The execution and delivery of such release instrument shall not affect Borrower’s obligations under the Loan Documents Documents. In no event shall any release or any document effecting a release hereunder be or be deemed to be a release of any rights, easements or privileges benefiting in connection with the sale of any manner any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor or any Guarantor with the Borrower in an arms‑length transaction, all upon satisfaction in full of each and all remaining portion of the following conditions precedent:
(a) Borrower shall deliver to Lender a written request (each, a “Release Notice”) for such partial release not later than thirty (30) days prior to the day on which Borrower desires such partial release to become effective (which notice may be revoked by Borrower at any time prior to Lender’s recordation of such partial release);
(b) [Intentionally Omitted];
(c) No Default Property or Event of Default shall have occurred and be continuing either as of the date on which Borrower shall request such partial release and/or as of the effective date of such partial release;
(d) Lender shall have been paid, in immediately available funds, all escrow, closing and recording costs; the costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the out-of-pocket costs incurred by Lender in verifying that all conditions precedent to the release of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance fee equal to Five Hundred Dollars ($500.00);
(e) Except as set forth in Section 2.4(b), the greater of (x) 40% of the Net Sale Proceeds and (y) the applicable minimum release prices set forth in Exhibit D attached hereto (the “Release Prices”) for the Released Property shall have been paid to Lender as a partial repayment of the Loan.
(f) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring that, after giving effect to such release, (x) the lien created hereby and insured under such title policy is a first priority lien on the remaining Properties subject only to original permitted exceptions applicable to the remaining Properties, and (y) the Title Policy is in full force and effect and unaffected by such release;
(g) [Intentionally Omitted]; and
(h) The Assets maintain (on a portfolio basis both before the release of the Released Property and after giving effect to the release of the Released Property) a “Loan-to-Value Ratio” of not more than 40%. Neither the acceptance of any payment or the issuance of any partial release by Lender shall adversely affect the Borrower’s obligation to pay all amounts owing under this Agreement or the other Loan Documents or the lien of the Security Instrument on the remaining Assets. Lender shall use commercially reasonable efforts to cooperate with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, with respect to complying with any applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset in connection with the sale Deed of any Asset (including, without limitation, Arizona Department of Real Estate regulations pertaining to residential, subdivided lot sales), it being acknowledged and agreed that Lender shall have no obligation whatsoever to incur any cost or expense or additional liability in connection with such commercially reasonable cooperationTrust.
Appears in 1 contract
Samples: Revolving Loan Agreement (Columbia Equity Trust, Inc.)
PARTIAL RELEASE OF PROPERTY. After the Effective Date, Borrower shall have the right to obtain from Lender a partial release of each individual Asset buildings and the respective Parcels on which such buildings are located (collectively, the "“Released Property"”) from the lien of the Security Instrument Deed of Trust securing Borrower’s obligations under the Loan Documents in connection with the sale of any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor Borrower or any Guarantor with the Borrower in an arms‑length arms-length transaction, all upon satisfaction in full of each and all of the following conditions precedent:
(a) Borrower shall deliver to Lender a written request (each, a “Release Notice”) for such partial release not later than thirty (30) days prior to the day on which Borrower desires such partial release to become effective (which notice may be revoked by Borrower at any time prior to Lender’s recordation of such partial release)effective;
(b) [Intentionally Omitted]All lot split, zoning, use, access, reciprocal access and title insurance matters shall be addressed to the satisfaction of Lender, including without limitation, (i) at Lender’s request in the event of a recordation of Subdivision Map in connection with the applicable partial release, the issuance of a new or updated ALTA survey depicting the remaining portion of the Property, and (ii) if applicable, the approval and execution by all necessary parties of a Lender approved (in the exercise of Lender’s reasonable discretion) reciprocal access agreement between the Property and the Released Property. In addition, with respect to the parking count, access and configuration of the remaining Property, and without limitation on the foregoing, at no time prior to or following any such partial release shall there be less than the number of legal parking spaces required by all applicable Legal Requirements;
(c) No Default or Event of Default shall have occurred and be continuing continuing, either as of the date on which Borrower shall request such partial release and/or as of the effective date of such partial release;
(d) A portion of the Exit Fee in an amount equal to one and half percent (1.50%) of the amount of the Loan principal being so repaid shall be paid in full to Lender;
(e) Lender shall have been paid, in immediately available funds, all escrow, closing and recording costs; the reasonable costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the reasonable out-of-pocket costs incurred by Lender in verifying that all conditions precedent to the release of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance partial release fee equal to Five Hundred Fifteen Thousand and No/100 Dollars ($500.0015,000.00) for each such partial release (the “Reconveyance Fee”);
(ef) Except as set forth Borrower shall have paid to Lender, in Section 2.4(b)immediately available funds, on or before the effective date of any such permitted partial release, a release price (the “Release Price”) equal to the greater of (xi) 40% the amount as set forth on Exhibit K attached hereto with respect to the Released Property or (ii) one hundred percent (100%) of the Net Sale Sales Proceeds in connection with such partial release.
(g) If any new map or lot line adjustment has occurred, then Borrower shall have provided Lender with evidence acceptable to Lender that the Property and (y) the applicable minimum release prices set forth remaining portion of the Property each has been formally designated as a distinct, separate, tax lot and Lender shall have received evidence satisfactory to Lender that any tax, bond or assessment affecting the Property, including any assessment or special tax imposed in Exhibit D attached hereto (the “Release Prices”) for the Released Property connection with any improvement district, assessment district or special taxing district, shall have been paid to Lender as a partial repayment of properly allocated between the Loan.subject Released Property and the remaining Property; and
(fh) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring that, after giving effect to such release, (xi) the lien created hereby and insured under such title policy is a first priority lien on the remaining Properties Property subject only to original permitted exceptions Permitted Encumbrances applicable to the remaining PropertiesProperty, and (yii) the Title Policy is in full force and effect and unaffected by such release;
release and (giii) [Intentionally Omitted]; and
(h) The Assets maintain (on a portfolio basis both before that the release Title Policy has been “dated down” to be effective as of the Released Property and after giving effect to the release date of the Released Property) a “Loan-to-Value Ratio” of not more than 40%applicable partial release. Neither the acceptance of any payment or the issuance of any partial release by Lender shall affect the Borrower’s obligation to pay all amounts owing under this Agreement or the other Loan Documents or the lien of the Security Instrument Deed of Trust on the remaining Assets. Lender shall use commercially reasonable efforts to cooperate with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, with respect to complying with any applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset in connection with the sale of any Asset (including, without limitation, Arizona Department of Real Estate regulations pertaining to residential, subdivided lot sales), it being acknowledged and agreed that Lender shall have no obligation whatsoever to incur any cost or expense or additional liability in connection with such commercially reasonable cooperationProperty.
Appears in 1 contract
Samples: Loan Agreement (Behringer Harvard Opportunity REIT II, Inc.)
PARTIAL RELEASE OF PROPERTY. After the Effective Date, Borrower shall have the right to obtain from Lender a release of each individual Asset (the "Released Property") from the lien of the Security Instrument securing Borrower’s obligations under the Loan Documents in connection with the sale of any of the same to a third party that is not an Affiliate of Borrower, any Asset Guarantor or any Guarantor with the Borrower in an arms‑length transaction, all upon satisfaction in full of each and all of the following conditions precedent:
(a) Borrower shall deliver From time to Lender a written request (eachtime Borrowers may request, a “Release Notice”) for such partial release upon not later less than thirty (30) days prior written notice to Administrative Agent, that a Property be released from the day on Lien created by the Security Document applicable thereto, which Borrower desires such partial release to become effective (which notice may the "Property Release") shall be revoked effected by Borrower at any time prior to Lender’s recordation the Administrative Agent if the Administrative Agent determines all of the following conditions are satisfied as of the date of such partial releaseProperty Release:
(i) No Default or Potential Default exists or will exist immediately after giving effect to such Property Release by reason of the release of such Property;
(ii) After giving effect to such Property Release, the Aggregate Loan Commitment will be greater than or equal to $25,000,000 and not fewer than three Properties will remain encumbered by the Lien of the Security Documents (provided, for purposes of determining the number of Properties remaining encumbered, (i) the Gateway Center Property (if any portion of such Property remains encumbered at such time) may not be counted as one of the three required Properties and (ii) the I-81 Properties (or any portions thereof that remain encumbered by the Lien of the Security Documents) shall be deemed to be a single Property);
(biii) [Intentionally Omitted];
Borrowers shall confirm (cvia reasonable substantiating documentation) No Default or Event of Default shall have occurred and be continuing either as of the date on which Borrower shall request such partial release and/or as of the effective date of such partial release;
(d) Lender shall have been paid, in immediately available funds, all escrow, closing and recording costs; the costs of preparing and delivering such partial release and any other related documents, including without limitation reasonable attorneys’ fees; the out-of-pocket costs incurred by Lender in verifying that all conditions precedent to the release satisfaction of the applicable parcels have been satisfied; the cost of any title insurance endorsements required by Lender and a reconveyance fee equal to Five Hundred Dollars ($500.00);
(e) Except as set forth in Section 2.4(b), the greater of (x) 40% of the Net Sale Proceeds and (y) the applicable minimum release prices set forth in Exhibit D attached hereto (the “Release Prices”) for the Released Property shall have been paid to Lender as a partial repayment of the Loan.
(f) Borrower, at its sole cost and expense, shall have delivered to Lender one or more endorsements to the Title Policy insuring Administrative Agent that, after giving effect to such releasethe Property Release, Net Operating Income from the Properties remaining encumbered by the Lien of the Security Documents is sufficient to yield a Loan Constant which is not less than the Minimum Applicable Loan Constant;
(iv) If, after giving effect to the Property Release, (x) the lien created hereby and insured under such title policy is a first priority lien on the remaining Properties subject only to original permitted exceptions applicable to the remaining Properties, and Aggregate Loan Commitment would be less than $70,000,000 or (y) fewer than five (5) Properties would remain encumbered by the Title Policy is in full force and effect and unaffected Lien of the Security Documents (provided, for purposes of determining the number of Properties remaining encumbered, the I-81 Properties (or any portions thereof that remain encumbered by such releasethe Lien of the Security Documents) shall be deemed to be a single Property), the Loan-to-Value Percentage (which, if requested by Administrative Agent, shall be determined based on new Appraisals ordered by Administrative Agent at Borrowers’ expense (subject to Section 3.2 below)) shall not be greater than fifty percent (50%);
(gv) [Intentionally Omitted]; and
Borrowers shall confirm (hvia reasonable substantiating documentation) The Assets maintain (on a portfolio basis both before to the release satisfaction of the Released Property and Administrative Agent, that, after giving effect to the Property Release:
(A) not more than thirty-five percent (35%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the twelve month period following such Property Release; and
(B) not more than forty-five percent (45%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the twenty-four month period following such Property Release; and
(C) not more than fifty-five percent (55%) of Gross Rents from all remaining Properties is to be derived from Leases expiring (or which provide for a valid right of termination by the tenant) within the thirty-six month period following such Property Release. Notwithstanding the foregoing, Borrowers shall be deemed to have satisfied the requirements of this clause (v) even if the percentage of Gross Rents derived from the remaining Properties exceeds the applicable thresholds so long as, after giving effect to the Property Release, the Adjusted Loan Constant (as defined in and calculated in accordance with Exhibit K) is greater than or equal to the Minimum Applicable Loan Constant.
(vi) Borrowers shall pay to Administrative Agent, for the benefit of Lenders, the applicable Release Price;
(vii) Borrowers shall pay to Administrative Agent any applicable Exit Fee; provided, however, that if, in connection with a proposed sale of a Property to an unaffiliated third-party purchaser, the release of the Released PropertyProperty in question would otherwise be prohibited by the provisions of subsection (v) above, then Borrowers shall be permitted, concurrently with the sale of such Property to the unaffiliated third-party purchaser, to obtain a “LoanProperty Release of such other Property as is necessary in order to satisfy the requirements of such subsection (v) above, without payment of an Exit Fee on the Release Price paid in connection with such additional Property (though Borrowers shall pay an Exit Fee with respect to the Release Price paid on the original Property conveyed to the unaffiliated third party purchaser); and provided further, that if, in connection with a proposed sale of a Property to an unaffiliated third-toparty purchaser the release of the Property in question would otherwise be prohibited by the provisions of subsection (iii), (iv) or (v) above, then Borrowers shall be permitted, concurrently with the sale of such Property to the unaffiliated third-party purchaser, to repay principal in order to comply with such subsection without payment of an Exit Fee with respect to the amount so repaid; and
(viii) Borrowers shall have delivered to Administrative Agent all documents and instruments reasonably requested by Administrative Agent in connection with such Property Release including, without limitation, the reconveyance or other instruments to be used to effect such Property Release and, if required by Administrative Agent and available, appropriate endorsements to the Title Policies in effect with respect to the remaining Properties.
(ix) If Guarantor has been released from liability under clause (h) of Section 1 of the Limited Guaranty referenced in Exhibit B, then after giving effect to the Property Release, the Par Loan Value Ratio” allocated to the Granite Tower Property shall not exceed fifty percent (50%) of the aggregate Par Loan Values of all Properties remaining encumbered by Security Documents; provided, however, that if following the applicable Property Release the foregoing condition would not more than 40%. Neither be satisfied, then Borrowers, at their election, may elect to either (A) cause the acceptance of any payment or the issuance of any partial release by Lender shall affect the Borrower’s obligation Granite Property to pay all amounts owing under this Agreement or the other Loan Documents or be released from the lien of the Security Instrument on the remaining Assets. Lender shall use commercially reasonable efforts to cooperate with Borrower or any Asset Guarantor, at Borrower’s sole cost and expense, with respect to complying with any Document applicable law, rule or regulation having jurisdiction over any Borrower, Asset Guarantor or any Asset thereto in connection accordance with the sale terms of any Asset this Section 2.10 (includingprovided, without limitation, Arizona Department of Real Estate regulations pertaining to residential, subdivided lot sales), it being acknowledged and agreed that Lender Borrowers shall have no obligation whatsoever to incur any cost or expense or additional liability pay an Exit Fee with respect to the amount repaid by Borrowers in connection with such commercially reasonable cooperationProperty Release) or (B) cause Guarantor's liability under clause (h) of Section 1 of the Limited Guaranty referenced in Exhibit B hereto to be reinstated.
(b) Provided the applicable Borrower does not own any Properties that will remain encumbered by the Lien of the Security Documents following the applicable Property Release, then concurrent with the release of a Property from the Lien created by the Security Document applicable thereto, the Borrower that owns the Property which is the subject of the Property Release shall be automatically released from any future obligations under this Agreement or any of the Loan Documents, excepting, however, any obligations that may arise under the Hazardous Materials Indemnity Agreement.
(c) If Administrative Agent elects to obtain Appraisals of the Properties as a condition to a Property Release (as permitted by this Section 2.10) and has either not received or not had an opportunity to review and approve the Appraisals, or if there is a dispute regarding the Appraisals, then:
(i) Borrowers shall be permitted to release the relevant Property from the Lien of the Security Documents, provided Borrowers deliver one hundred percent (100%) of the net proceeds from the sale of the relevant Property to Administrative Agent;
(ii) Administrative Agent shall hold such proceeds (net of the applicable Release Price which will first be deducted therefrom and applied in reduction of the outstanding principal balance of the Loan as contemplated herein above) in a separate interest-bearing account, with interest accruing for the benefit of Borrowers, which Borrowers hereby pledge as additional collateral for the Loan; and
(iii) Following Administrative Agent’s receipt, review and approval of the relevant Appraisal (or Appraisals):
(A) If the Appraisal(s) confirm that the relevant Property Release should not have been permitted, then (1) if such Property Release should not have been permitted due to Borrowers’ failure to meet a requirement of Section 2.10 that is susceptible to cure by repayment of a portion of the outstanding principal amount of the Loan, then Borrowers shall repay any amounts necessary to satisfy such requirement, but shall not be required to pay an Exit Fee with respect to such repayment and/or (2) if such Property Release should not have been permitted due to Borrowers’ failure to meet a requirement of Section 2.10 that is susceptible to cure by releasing an additional Property from the Lien of the Security Documents, then Borrowers shall be required to release such additional Property, which release shall be treated in the same manner as a Property Release under clause (a)(vii) above (i.e., no Exit Fee shall be due on account of such Property Release); and
(B) If (1) the Appraisal(s) confirm that Borrowers were entitled to the Property Release (i.e., Borrowers have satisfied all of the conditions to such Property Release set forth in Section 2.10) or (2) Borrowers subsequently satisfy the conditions set forth in Section 2.10 by releasing an additional Property or repaying a portion of the outstanding principal amount of the Loan in accordance with clause (A) above, then any sales proceeds remaining on deposit with Administrative Agent shall be released to Borrowers.
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust II, Inc.)
