Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Date, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions: (a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release; (b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property; (c) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice shall specify the date, which must be a Business Day (the “Release Date”), on which the release is to be consummated; (d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls; (e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date); (f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release Date, a release of Lien (and related Loan Documents) for each Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released; (g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual Property; (h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date; (i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof; (j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender; (k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith; (l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement; (m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release; (n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and (o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3After
(1) the Permitted Defeasance Date, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any if Borrower has elected to defease a portion of the Loan and the applicable requirements of Section 2.4 hereof and this Section 2.5 have been satisfied, and provided that no Event of Default shall cause, give rise to a right to requirethen exist, or otherwise result in(2) the Permitted Prepayment Date, if Borrower has elected to prepay a portion of the release Loan and the applicable requirements of any Lien Section 2.4 hereof and this Section 2.5 have been satisfied, and provided in either case that no Event of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout DateDefault shall then exist, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s 's obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be (i) prepaid in connection accordance with such release Section 2.3 or (ii) defeased in accordance with Section 2.4 hereof, as applicable, shall equal or exceed the Release Price for the applicable Individual Property, and such prepayment or defeasance, as applicable, shall be deemed a voluntary prepayment or a voluntary defeasance, as applicable, for all purposes hereunder;
(cb) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property;
(c) Borrower shall defease or prepay, which such notice shall specify as applicable, the dateportion of the Note equal to the Release Price of the Individual Property being released (together with all accrued and unpaid interest on the principal amount being defeased) in accordance with the terms and conditions of Sections 2.3, which must be a Business Day (the “Release Date”), on which the release is to be consummated2.4.1 and 2.4.2 hereof;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release DateDefeasance Date or date of such prepayment, a release of Lien (and related Loan Documents) for each such Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction each State in which each the Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s 's Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(ge) As of the date of Borrower’s notice After giving effect to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the immediately preceding twelve (12) full calendar month period for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than at least equal to the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, 1.60:1.00 and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each plus the Individual Property to be releasedreleased for the twelve (12) full calendar months immediately preceding the release of each the Individual Property;
(hf) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined received evidence satisfactory to Lender that the Loan to Value Ratio for the Individual Property being released constitutes a separate tax lot from all other Individual Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing DateInstruments;
(ig) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor Borrower or any Affiliate thereofPrincipal;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(kh) Lender shall have received payment of all Lender’s 's costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(mi) Borrower shall have delivered deliver evidence reasonably satisfactory to Lender an Officer’s Certificate stating that that, after immediately giving effect to the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct Release, with respect to all Adjacent Properties, (i) all reciprocal easement agreements existing on and as of such Adjacent Properties on the date hereof shall remain in place unless otherwise consented to in writing by Lender and (ii) all Adjacent Properties remaining subject to the Lien of the consummation a Security Instrument shall comply in all respects with all applicable Requirements of the release;Law, including, without limitation, all applicable zoning and building laws and regulations; and
(nj) On or prior to the date of the consummation of the Immediately following such release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale Allocated Loan Amount of the Individual Property being released; and
released (othe "Release Property") Borrower shall have delivered confirmation in writing from be reduced to zero and the applicable Rating Agencies Allocated Loan Amounts of the Individual Properties remaining subject to the effect that Lien of a Security Instruments immediately following such release will not result in a downgrading, withdrawal or qualification shall be reduced pro rata by the difference between the Release Price of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Release Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed the original Allocated Loan Amount of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorthe Release Property.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any If Borrower has elected to prepay a portion of the Loan shall causeand the requirements of Section 2.4 and this Section 2.5.2 have been satisfied, give rise and provided that no Event of Default has occurred and is continuing at the time of the release, upon twenty (20) days’ prior written notice to Lender (the “Release Notice”) (it being agreed that Borrower may, from time to time, postpone the actual date of release of the Individual Property pursuant to this Section upon written notice to Lender of such postponement (a right “Postponement”) without the requirement of delivering a new Release Notice with respect to require, or otherwise result in, the release of any Lien of any Security Instrument on any such Individual Property. Subject to Section 6.4(e) below, after the Lockout Date), Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument Mortgage thereon (and related Loan Documents) upon a bona fide third-party sale or, at Borrower’s option, an assignment of the Mortgage relating to such Individual Property (each, “Mortgage Release Documentation”) and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event Borrower shall prepay the Loan in an amount equal to the Adjusted Release Amount for the applicable Individual Property, such prepayment shall be deemed a voluntary prepayment for all purposes hereunder and the requirements of Default Section 2.4.1 shall exist as of the date of Borrower’s notice apply, and if any Postponement occurs, Borrower shall pay to Lender pursuant to Section 2.5 all Breakage Costs incurred and all of Lender’s costs and expenses (cincluding reasonable attorney’s fees and disbursements) and no Event of Default exist immediately after the consummation of incurred by Lender in connection with such releasePostponement;
(b) The amount of the outstanding principal balance of the Loan Subsequent to such release, Borrower shall continue to be prepaid a Special Purpose Entity pursuant to, and in connection with such release shall equal the Release Price for the applicable Individual Propertyaccordance with, Section 4.1.30 hereof;
(c) Borrower shall provide deliver to Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release and the Approved Rating Agencies an Additional Insolvency Opinion or an update of the Individual Property, which such notice shall specify the date, which must be a Business Day (the “Release Date”), on which Insolvency Opinion indicating that the release is to be consummateddoes not affect the opinions set forth therein;
(d) On the Release DateIf required by any Approved Rating Agency, Borrower shall pay deliver (or cause to be delivered) to Lender all unpaid interest on the portion and each Approved Rating Agency, an opinion of counsel that such release would not cause a “significant modification” of the outstanding principal amount of the Loan being prepaid plusLoan, if the Release Date as such term is not a Payment Date, all interest accruing for the full Interest Accrual Period defined in which the Release Date fallsTreasury Regulations Section 1.860G-2(b);
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty ten (3010) days prior to the date on which the prepayment will be made, Mortgage Release Date, a release of Lien (and related Loan Documents) for each Individual Property Documentation for execution by Lender. Such release shall be in a form appropriate in Lender that complies with the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights applicable requirements of the releasing lenderSection 2.5.1(b). In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, will effect such releases release in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). ;
(f) Borrower and Guarantor shall execute and deliver any documents as to Lender may reasonably request to evidence the continued validity together with its delivery of the LiensRelease Notice, security interests an Ongoing Debt Yield Calculation Notice. Lender shall approve or reject in writing the Borrower’s calculation of Ongoing Debt Yield and other rights Borrower’s calculation of the principal prepayment of the Loan, if any, necessary to satisfy the Ongoing Debt Yield test set forth in clause (g) below, which are set forth in the Ongoing Debt Yield Calculation Notice within fifteen (15) days of Lender’s receipt of such notice or Lender under shall be deemed to have approved such calculation set forth therein. If Lender rejects Borrower’s calculations set forth in such Ongoing Debt Yield Calculation Notice, Lender’s calculation of Ongoing Debt Yield and the Loan Documents not being releasedprincipal prepayment of the Loan, if any, necessary to satisfy the Ongoing Debt Yield test set forth in clause (g) below, shall be Conclusive;
(g) As of After giving effect to such release (including the date of Borrower’s notice to Lender amount prepaid in subsection (a) above and any principal amount that the Borrower may prepay pursuant to Section 2.5(c2.4.1(c)), the Ongoing Debt Yield for the trailing twelve (12) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio month period for the Properties then remaining subject to the Liens of the Security Instruments Mortgages shall be equal to or greater than the greater of (i) the Closing Debt Service Coverage Ratio for all of the Properties existing on the Closing DateYield, and (ii) the Ongoing Debt Service Coverage Ratio Yield for all of the then remaining Properties for the twelve (including each Individual Property to be released12) month period immediately preceding the release of each the Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender shall have received evidence that the The Individual Property to be released shall be conveyed pursuant to in an arm’s length agreement transfer to a Person other than Borrower, Guarantor Borrower or any Affiliate thereofof its Affiliates;
(i) The Adjusted Release Amount paid to Lender in connection with any such release shall be applied (i) first, to reduce the Release Amount of the Individual Property being released to zero and (ii) second, to the Debt in any order or priority as determined in Lender’s sole discretion immediately following such release;
(j) Either Borrower shall reimburse Lender and Servicer for any reasonable out-of-pocket costs and expenses of Lender and Servicer arising from such release (iincluding reasonable out-of-pocket attorneys’ fees and expenses) a Lender 80% Determination and Borrower shall have paid (or caused the transferee of the released Individual Property to have paid), in connection with such release (and without duplication), (i) all recording charges, filing fees, taxes or other expenses payable in connection therewith, and (ii) all reasonable out-of-pocket costs and expenses of the Approved Rating Agencies incurred with respect to such release, and (iii) to any Servicer, the current fee, not to exceed $15,000 for each request for release of one or more Individual Properties, being assessed by such Servicer to effect such release;
(i) Borrower shall have been made at Borrower’s expense complied with all of the provisions of the Master Lease with respect to the to be released Individual Property, including, without limitation, the delivery of any notices and the execution of any documents as may be required thereunder, and Borrower shall have delivered evidence acceptable to Lender of such compliance with the requirements of the Master Lease and (ii) the transfer of such Individual Property to the applicable third party will not result in the Master Tenant having the right to terminate the Master Lease or obtain a reduction in the term of the Master Lease for the remaining Properties;
(l) With respect to the release of a Ground Lease Property, Borrower shall have no further liabilities or obligations under the related Ground Lease on a going-forward basis from and after the date of the release (other than pre-existing indemnification and similar obligations relating to events prior to the release that may survive such release pursuant to the terms of the related Ground Lease); and
(m) Notwithstanding anything to the contrary contained herein or in any other Loan Document, if the Loan is included in a REMIC Trust and the Loan-to-Value Ratio would exceed 125% immediately after the release of the applicable Individual Property (and after taking into account any principal paydown of the Loan required or permitted in connection with such release), no release will be permitted unless the principal balance of the Loan is prepaid by an amount not less than the greater of (i) the Adjusted Release Amount or (ii) Borrower shall deliver the least of one (1) of the following amounts: (A) only if the released Individual Property is sold, the net proceeds of an arm’s length sale of the released Individual Property to an unrelated Person, (B) the fair market value of the released Individual Property at the time of the release, or (C) an amount such that the Loan-to-Value Ratio after the release of the applicable Individual Property (and after taking into account any principal paydown of the Loan required or permitted in connection with such release) is not greater than the Loan-to-Value Ratio of the Properties immediately prior to such release, unless Lender receives an opinion of counsel for Borrower that is standard that, if the release does not satisfy any of the tests in commercial lending transactions and subject only to customary qualificationsclause (ii) above, assumptions and exceptions opining that any REMIC Trust formed pursuant to a the Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with the release of the applicable Individual Property from Property. For the lien avoidance of doubt, the related Security Instrument and the review and approval of the documents and information Loan-to-Value Ratio shall not be required to be delivered in connection therewith;
(l) On and after determined using an independent, third party appraisal, but may be determined under any commercially reasonable method, including a broker's opinion of value or a capitalization of net operating income using a reasonable discount rate, provided that the date of Lender has no reason to believe that the consummation of the release, Borrower value as so determined is incorrect. Any such prepayment shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations deemed a voluntary prepayment and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true subject to Section 2.4.1 hereof (other than the requirements to prepay the Debt in full and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon provide advance written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect notice to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) If Mortgage Borrower has elected to release an Individual Property from the Lien of the Security Instrument thereon and the requirements of this Section 2.52.6 have been satisfied, and provided that no repayment or prepayment Event of all or any portion of the Loan Default shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Datethen exist, Borrower may shall be entitled to (x) permit Mortgage Borrower to obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) upon a bona fide third-party sale of such Individual Property and (y) the release of Borrowerthe applicable Borrower Entity’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(ai) No Event All conditions to the release of Default shall exist as such Individual Property from the Lien of the date Security Instrument thereon shall have been satisfied in accordance with the terms of Borrower’s notice to the Mortgage Loan Documents (as independently determined by Lender pursuant to Section 2.5 (cin its reasonable discretion) and no Event (ii) all conditions to the release of Default exist immediately after such Individual Property shall have been satisfied in accordance with the consummation terms of Section 2.6 of the Mezzanine B Loan Agreement with respect to such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days days’ but no more than ninety (90) days days’ prior written notice of its request the release of any Individual Property permitted under this Section 2.6;
(c) On or prior to obtain a the release of the applicable Individual Property, which Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Release Price for such notice shall specify Individual Property, together with (i) all accrued and unpaid interest calculated at the dateApplicable Interest Rate on the amount of principal being prepaid through and including the date of the release, which must be (ii) if such date is a Business Day date other than a Payment Date, the Interest Shortfall, (iii) Breakage Costs, if any, without duplication of any sums paid pursuant to the “Release Date”preceding clause (ii); (iv) the applicable Spread Maintenance Payment (if any); and (v) all other sums due under this Agreement, on which the release is to be consummatedNote or the other Loan Documents in connection with a prepayment;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less later than thirty ten (3010) days prior to the Release Date, a release of Lien (the applicable Individual Property, an amendment to the Pledge Agreement and related Loan Documents) for UCC-3 Financing Statements each Individual Property for execution by Lender. Such amending Pledge Agreements and the UCC Financing Statements to reflect the release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderapplicable Borrower Entity. In addition, Borrower shall provide all other customary documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(e) Intentionally Omitted;
(f) Intentionally Omitted;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyIntentionally Omitted;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all of Lender’s reasonable costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(li) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being releasedIntentionally Omitted; and
(oj) Borrower Immediately following such release, the Allocated Loan Amount for the Individual Property released (the “Released Individual Property”) shall have delivered confirmation in writing from be reduced to zero, and the applicable Rating Agencies Allocated Loan Amount for each of the Individual Properties remaining subject to the effect that Lien of the Security Instruments immediately following such release will not result in a downgrading, withdrawal or qualification shall be reduced by such Individual Property’s pro rata share of the respective ratings in effect immediately prior to such release for difference between the Securities. Provided that no Default or Event Release Price of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an the Released Individual Property and such assignment shall be without recoursethe original Allocated Loan Amount for the Released Individual Property. For purposes of the immediately preceding sentence, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property’s “pro rata share” shall mean a fraction, the numerator of which is the Allocated Loan Amount for such Individual Property prior to giving effect to any reduction pursuant to this Section 2.52.6(j), Lender shall readjust and the denominator of which is the sum of the Allocated Loan Amounts, prior to giving effect to any required reserve payments and any amortization payments reduction pursuant to reflect such releasethis Section 2.6(j), such adjustments to be determined by Lender in its sole discretion absent manifest errorfor all of the Individual Properties other than the Released Individual Property.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e(a) and this Section 2.5, no repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Date, Borrower Borrowers may obtain the release (a “Partial Release”) of (A) an Individual Property from the Lien of the Mortgage and the other Security Instrument thereon Documents and (B) from and related Loan Documents) upon a bona fide third-party sale after the date of such release, unless the applicable Borrower shall own any Remaining Individual Property and Properties, the release of Borrower’s obligations under the applicable Borrower from the Loan Documents (other than with respect to such Individual Property (other than those expressly stated to survive), obligations that specifically survive repayment of the Debt or any portion thereof) upon the satisfaction of each the following conditions (any one or more of which may be waived by Administrative Agent and Arrangers upon consent of the following conditions:Required Lenders):
i. Borrowers shall have given Administrative Agent at least ten (a10) No Event days’ prior notice to the effective date of Default shall exist as of such Partial Release (the “Partial Release Date”) setting forth the date of Borrower’s notice the Partial Release and identifying the Individual Property to Lender pursuant to Section 2.5 be released (cthe “Released Property”) and no Event of Default exist immediately after from the consummation of such release;
(b) The amount Lien of the outstanding principal balance of Mortgage and the Loan to be prepaid in connection with other Security Documents and the Borrower that owns such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, together with drafts of any applicable release documents to release the Release Property and, unless the applicable Borrower shall own any Remaining Individual Properties, the applicable Borrower from the other Loan Documents in favor of Administrative Agent (which such notice release documents shall specify the date, which must be a Business Day (the “Release Date”subject to Administrative Agent’s reasonable approval), on which the release is to be consummated;
ii. Borrowers shall have (dA) On the Release Date, Borrower shall pay to Lender paid all accrued and unpaid interest on the portion of the Loans being prepaid together with any applicable Breakage Costs and (B) made a prepayment of the outstanding principal amount of the Loan being prepaid plusLoans in an amount not less than the applicable Partial Release Price, together with the applicable Prepayment Premium (if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date fallsany);
(e) iii. On the date Borrowers deliver to Administrative Agent notice of the proposed Partial Release and on the Partial Release Date, Borrower no Event of Default shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date)be continuing;
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release Date, a release of Lien (and related Loan Documents) for each Individual Property for execution by Lenderiv. Such release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory With respect to a prudent institutional lender and shall contain standard provisionsPartial Release of (A) a Key Property (other than the Mayfair Retail Component, if any, protecting which may not be released pursuant to this Section 2.6 or otherwise) or (B) an Other Property on or after the rights date that the aggregate amount of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires Partial Release Prices paid to be delivered Administrative Agent by Borrower Borrowers pursuant to Section 2.6(1)(a)(ii) in connection with such releaseOther Properties is greater than $300,000,000, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for is, in the Properties then remaining subject case of each, of (A) and (B) equal to the Liens of the Security Instruments shall be or greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date1.30 to 1.00 after giving effect to such Partial Release, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender Administrative Agent shall have received evidence of the same that is reasonably acceptable to Administrative Agent;
v. Both immediately prior to and after giving effect to each Partial Release, the Individual Property to be released Corporate Revolver Borrower shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrowerin compliance with the Financial Covenants, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender Administrative Agent shall have received payment evidence of the same that is reasonably acceptable to Administrative Agent;
vi. With respect to a release of the Individual Properties identified as the Mayfair Office Component, the Maryland Office Component or the Southwest Office Component, as applicable, such applicable Individual Properties shall constitute a separate tax lot (or, if not a separate tax lot, the applicable Borrower has taken all Lender’s action required under applicable law required to be taken in order for such Individual Properties to be designated a separate tax lot other than recordation of the deed to the applicable transferee);
vii. Borrowers shall have paid to Administrative Agent all reasonable out‑of‑pocket costs and expenses, expenses (including due diligence review costs actual and counsel fees and disbursements reasonable attorneys’ fees) incurred by Administrative Agent in connection with the release of the Individual Release Property from the lien Lien of the related Security Instrument and Loan Documents;
viii. In the review and approval event that the applicable Borrower shall own any of the documents Remaining Individual Properties, the applicable Borrower shall, simultaneously with the release of the Released Property, transfer title to the Released Property to Person(s) other than a Borrower;
ix. In the event that (a) the Released Property is the Mayfair Office Component, the Maryland Office Component or the Southwest Office Component, (b) prior to the Partial Release Date, the applicable Borrower shall have commenced one or more Alterations to the Mayfair Retail Component, the Maryland Retail Component or the Southwest Retail Component, as the case may be, and information (c) as a result of the release of the Mayfair Office Component, the Maryland Office Component or the Southwest Office Component, as the case may be, the applicable Borrower would be required to be delivered in connection therewith;
(l) On and after deliver an Alteration Indemnity or such other collateral pursuant to the date terms of Section 9.14(1), then the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) applicable Borrower shall have delivered to Lender Administrative Agent an Officer’s Certificate stating Alteration Indemnity or such other collateral as required pursuant to the terms of Section 9.14(1); and
x. Borrowers shall have executed and delivered such documents as Administrative Agent may reasonably request relating to the Partial Release including, if the applicable Borrower will be released, replacement Notes executed by the remaining Borrowers; Notwithstanding the foregoing, under no circumstances shall (a) any Partial Release occur that would result in the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as outstanding aggregate principal balance of the date of the consummation of the release;
Loans being less than $350,000,000 after giving effect to such Partial Release, (nb) On or prior any Partial Release occur that would result in there being fewer than five (5) Remaining Individual Properties after giving effect to the date of the consummation of the releasesuch Partial Release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of (c) the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing identified as the Southwest Retail Component be released from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification Lien of the respective ratings in effect immediately prior to such release for Loan Documents unless the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property identified as the Southwest Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and such assignment shall be without recoursethe applicable Partial Release Price therefor paid to Administrative Agent, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an d) the Individual Property pursuant identified as the Maryland Retail Component be released from the Lien of the Loan Documents unless the Individual Property identified as the Maryland Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and the applicable Partial Release Price therefor paid to this Section 2.5, Lender shall readjust any required reserve payments Administrative Agent or (e) Borrowers fail to own the Mayfair Retail Component and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorat least one other Key Property.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3After the Release Date, Section 2.6, Section 6.4(eif Borrower has elected to (x) and this Section 2.5, no repayment or prepayment of all or any defease a portion of the Loan shall cause, give rise to a right to require, and the applicable requirements of Section 2.8 hereof and this Section 2.9 have been satisfied or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e(y) below, after the Lockout Permitted Prepayment Date, prepay a portion of the Loan and the applicable requirements of Section 2.7 have been satisfied, and provided that no Event of Default shall then exist, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be defeased in accordance with Section 2.8 hereof (or prepaid in connection accordance with such release Section 2.7 hereof) shall equal or exceed the Release Price for the applicable Individual Property, and such defeasance shall be deemed a voluntary defeasance (or, in the case of a prepayment, such prepayment shall be deemed to be a voluntary prepayment) for all purposes hereunder;
(cb) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property;
(c) Borrower shall defease (or prepay) the portion of the Note equal to the Release Price of the Individual Property being released (together with all accrued and unpaid interest on the principal amount being defeased or prepaid, which such notice shall specify as applicable) in accordance with the date, which must be a Business Day (the “Release Date”), on which the release is to be consummatedterms and conditions of Sections 2.8 hereof;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release DateDefeasance Date (or, in the case of a prepayment, the prepayment date), a release of Lien (and related Loan Documents) for each such Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction each State in which each the Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liensliens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(ge) As of the date of Borrower’s notice After giving effect to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens liens of the Security Instruments shall be greater than at least equal to the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing twelve (12) full calendar months on the Closing DateDate (i.e., 1.60:1.00) (assuming the Loan was outstanding), and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each the Individual Property to be released) for the twelve (12) full calendar months immediately preceding the release of each the Individual Property;
(hf) As of the date of Borrower’s notice After giving effect to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens liens of the Security Instruments shall be no greater than at least equal to the lesser of (i) the Loan to Value Ratio on the Closing Date (i.e., 50%) (assuming the Loan was outstanding), and (ii) the Loan to Value Ratio for all of the then remaining Properties (including the Individual Property to be released) immediately preceding the Closing Daterelease of the Individual Property;
(g) After giving effect to such release, Borrower shall not have collected Rents more than one (1) month in advance for the Properties then remaining subject to the lien of a Security Instrument in excess of Permitted Prepaid Rents for said Properties;
(h) If a Securitization has occurred, Lender shall have received an opinion of counsel that the release will not constitute a “significant modification” of the Loan under Section 1001 of the IRS Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust, which opinion shall be in form and substance (i) reasonably satisfactory to the Rating Agencies and their counsel and (ii) that would be reasonably satisfactory to Lender using the Prudent Lender Standard;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than BorrowerBorrower or SPE Component Entity, Guarantor or any Affiliate thereof;and that the requirements of Article 5 shall continue to be satisfied after giving effect to such release; and
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) If Mortgage Borrower has elected to release an Individual Property from the Lien of the Security Instrument thereon and the requirements of this Section 2.52.6 have been satisfied, and provided that no repayment or prepayment Event of all or any portion of the Loan Default shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Datethen exist, Borrower may shall be entitled to (x) permit Mortgage Borrower to obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents), (y) upon a bona fide third-party sale permit Mezzanine A Borrower to obtain the release of the Mezzanine A Collateral corresponding to the release of such Individual Property and (z) the release of Borrowerthe applicable Borrower Entity’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(ai) No Event All conditions to the release of Default shall exist as such Individual Property from the Lien of the date Security Instrument thereon shall have been satisfied in accordance with the terms of Borrower’s notice to the Mortgage Loan Documents (as independently determined by Lender pursuant to Section 2.5 (cin its reasonable discretion) and no Event (ii) all conditions to the release of Default exist immediately after such Individual Property shall have been satisfied in accordance with the consummation terms of Section 2.6 of the Mezzanine A Loan Agreement with respect to such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days days’ but no more than ninety (90) days days’ prior written notice of its request the release of any Individual Property permitted under this Section 2.6;
(c) On or prior to obtain a the release of the applicable Individual Property, which such notice Lender shall specify the date, which must be have received a Business Day (the “Release Date”), on which the release is wire transfer of immediately available federal funds in an amount equal to be consummated;
(d) On the Release DatePrice for such Individual Property, Borrower shall pay to Lender together with (i) all accrued and unpaid interest calculated at the Applicable Interest Rate on the portion amount of principal being prepaid through and including the date of the outstanding principal amount of the Loan being prepaid plusrelease, if the Release Date such prepayment occurs on a date which is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
Shortfall; and (eii) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment prepayment is made prior to the Open Prepayment Consideration Period End Date), Borrower pays to Lender the Prepayment Consideration, if any;
(fd) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less later than thirty ten (3010) days prior to the Release Date, a release of Lien (the applicable Individual Property, an amendment to the Pledge Agreement and related Loan Documents) for UCC-3 Financing Statements each Individual Property for execution by Lender. Such amending Pledge Agreements and the UCC Financing Statements to reflect the release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderapplicable Borrower Entity. In addition, Borrower shall provide all other customary documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(ge) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyIntentionally Omitted;
(hf) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing DateIntentionally Omitted;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Release of an Individual Property. Except as (a) In addition to the Special Release set forth in Section 2.3, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout DateRequired Reserve Account Agreement, Borrower may obtain the release (a “Partial Release”) of (A) an Individual Property from the Lien of the Mortgage and the other Security Instrument thereon Documents and (B) from and related Loan Documents) upon a bona fide third-party sale after the date of such release, unless the applicable Borrower shall own any Remaining Individual Property and Properties, the release of Borrower’s obligations under the applicable Borrower from the Loan Documents (other than with respect to such Individual Property (other than those expressly stated to survive), obligations that specifically survive repayment of the Debt or any portion thereof) upon the satisfaction of each of the following conditions:
(ai) No Event Borrower shall have given Administrative Agent at least ten (10) days’ prior notice to the effective date of Default shall exist as of such Partial Release (the “Partial Release Date”) setting forth the date of Borrowerthe Partial Release and identifying the Individual Property to be released (the “Released Property”) from the Lien of the Mortgage and the other Security Documents and the Borrower that owns such Individual Property, together with drafts of any applicable release documents to release the Release Property and, unless the applicable Borrower shall own any Remaining Individual Properties, the applicable Borrower from the other Loan Documents in favor of Administrative Agent (which release documents shall be subject to Administrative Agent’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such releasereasonable approval);
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(cii) Borrower shall provide Lender with at least thirty (30A) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice shall specify the date, which must be a Business Day (the “Release Date”), on which the release is to be consummated;
(d) On the Release Date, Borrower shall pay to Lender all accrued and unpaid interest on the portion of the Loans being prepaid together with the applicable Breakage Costs and (B) make a prepayment of the outstanding principal amount of the Loan being prepaid plus, if Loans in an amount not less than the applicable Partial Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date fallsPrice;
(eiii) On the date Borrower delivers to Administrative Agent notice of the proposed Partial Release and on the Partial Release Date, Borrower no Potential Default which is a monetary default or Event of Default shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date)be continuing;
(fiv) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior After giving effect to the Release DatePartial Release, a release of Lien (and related Loan Documents) for each Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject is equal to the Liens of the Security Instruments shall be or greater than the greater of (iA) 1.30 to 1.00 or (B) the Debt Service Coverage Ratio for all of immediately prior to the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyPartial Release;
(hv) As With respect to a release of the date of Borrower’s notice Individual Properties identified as Mayfair Office Component, Pioneer Office Component or Southwest Office Component, as applicable, such applicable Individual Properties shall constitute a separate tax lot (or, if not a separate tax lot, the applicable Borrower has taken all action required under applicable law required to Lender pursuant be taken in order for such Individual Properties to Section 2.5(c) hereof and as be designated a separate tax lot other than recordation of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject deed to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Dateapplicable transferee);
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (iivi) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only have paid to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially Administrative Agent all reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s out-of-pocket costs and expenses, expenses (including due diligence review costs actual and counsel fees and disbursements reasonable attorneys’ fees) incurred by Administrative Agent in connection with the release of the Individual Release Property from the lien Lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewithLoan Documents;
(lvii) On and after In the date event that applicable Borrower shall own any of the consummation Remaining Individual Properties, the applicable Borrower shall, simultaneously with the release of the releaseReleased Property, transfer title to the Released Property to Person(s) other than a Borrower shall be in compliance with Section 4.1.36 of this Agreementor any Person owned or controlled by a Borrower;
(mviii) Borrower shall have delivered to Lender an Officer’s Certificate stating In the event that (a) the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of Released Property is the date of Pioneer Office Component, Mayfair Office Component or the consummation of the release;
Southwest Office Component, (nb) On or prior to the date Partial Release Date, the applicable Borrower has commenced one or more Alterations to the Pioneer Retail Component, Mayfair Retail Component or the Southwest Retail Component, as the case may be, and (c) as a result of the consummation release of the releasePioneer Office Component, the applicable Borrower would be required to deliver an Alteration Indemnity or such other collateral pursuant to the terms of Section 9.14(1) hereof, then the applicable Borrower shall have delivered deliver to Lender a true, correct and complete copy Administrative Agent an Alteration Indemnity or such other collateral as required pursuant to the terms of the final executed closing settlement statement for the sale of the Individual Property being releasedSection 9.14(1) hereof; and
(oix) Borrower and Guarantors shall have delivered confirmation in writing execute and deliver such documents as Administrative Agent may reasonably request relating to the Partial Release; Notwithstanding the foregoing, under no circumstances shall (a) the Individual Property identified as Mayfair Retail Component be released from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification Lien of the respective ratings Loan Documents until the Loan is repaid in effect immediately prior to such release for full, (b) the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall identified as Pioneer Retail Component be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed released from the Lien of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an the Loan Documents unless the Individual Property pursuant identified as Pioneer Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and the applicable Partial Release Price therefor paid to this Section 2.5Administrative Agent, Lender shall readjust any required reserve payments or (c) the Individual Property identified as Southwest Retail Component be released from the Lien of the Loan Documents unless the Individual Property identified as Southwest Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and any amortization payments the applicable Partial Release Price therefor paid to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorAdministrative Agent.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) If Mortgage Borrower has elected to release an Individual Property from the Lien of the Security Instrument thereon and the requirements of this Section 2.52.6 have been satisfied, and provided that no repayment or prepayment Event of all or any portion of the Loan Default shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Datethen exist, Borrower may shall be entitled to (x) permit Mortgage Borrower to obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) upon a bona fide third-party sale of such Individual Property and (y) the release of Borrowerthe applicable Borrower Entity’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(ai) No Event All conditions to the release of Default shall exist as such Individual Property from the Lien of the date Security Instrument thereon shall have been satisfied in accordance with the terms of Borrower’s notice to the Mortgage Loan Documents (as independently determined by Lender pursuant to Section 2.5 (cin its reasonable discretion) and no Event (ii) all conditions to the release of Default exist immediately after such Individual Property shall have been satisfied in accordance with the consummation terms of Section 2.6 of the Mezzanine B Loan Agreement with respect to such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days days’ but no more than ninety (90) days days’ prior written notice of its request the release of any Individual Property permitted under this Section 2.6;
(c) On or prior to obtain a the release of the applicable Individual Property, which such notice Lender shall specify the date, which must be have received a Business Day (the “Release Date”), on which the release is wire transfer of immediately available federal funds in an amount equal to be consummated;
(d) On the Release DatePrice for such Individual Property, Borrower shall pay to Lender together with (i) all accrued and unpaid interest calculated at the Applicable Interest Rate on the portion amount of principal being prepaid through and including the date of the outstanding principal amount of the Loan being prepaid plusrelease, if the Release Date such prepayment occurs on a date which is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
Shortfall; and (eii) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment prepayment is made prior to the Open Prepayment Consideration Period End Date), Borrower pays to Lender the Prepayment Consideration, if any;
(fd) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less later than thirty ten (3010) days prior to the Release Date, a release of Lien (the applicable Individual Property, an amendment to the Pledge Agreement and related Loan Documents) for UCC-3 Financing Statements each Individual Property for execution by Lender. Such amending Pledge Agreements and the UCC Financing Statements to reflect the release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderapplicable Borrower Entity. In addition, Borrower shall provide all other customary documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(e) Intentionally Omitted;
(f) Intentionally Omitted;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyIntentionally Omitted;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all of Lender’s reasonable costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(li) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being releasedIntentionally Omitted; and
(oj) Borrower Immediately following such release, the Allocated Loan Amount for the Individual Property released (the “Released Individual Property”) shall have delivered confirmation in writing from be reduced to zero, and the applicable Rating Agencies Allocated Loan Amount for each of the Individual Properties remaining subject to the effect that Lien of the Security Instruments immediately following such release will not result in a downgrading, withdrawal or qualification shall be reduced by such Individual Property’s pro rata share of the respective ratings in effect immediately prior to such release for difference between the Securities. Provided that no Default or Event Release Price of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an the Released Individual Property and such assignment shall be without recoursethe original Allocated Loan Amount for the Released Individual Property. For purposes of the immediately preceding sentence, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property’s “pro rata share” shall mean a fraction, the numerator of which is the Allocated Loan Amount for such Individual Property prior to giving effect to any reduction pursuant to this Section 2.52.6(j), Lender shall readjust and the denominator of which is the sum of the Allocated Loan Amounts, prior to giving effect to any required reserve payments and any amortization payments reduction pursuant to reflect such releasethis Section 2.6(j), such adjustments to be determined by Lender in its sole discretion absent manifest errorfor all of the Individual Properties other than the Released Individual Property.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any portion Following the expiration of the Loan shall causeYield Maintenance Lockout Period, give rise to a right to requireprovided that no Event of Default is then continuing, or otherwise result in, Borrower may cause the release of any Lien of any Security Instrument on any one or more Individual Property. Subject to Section 6.4(e) below, after Properties (each a “Property Release” and the Lockout Date, Borrower may obtain the release of an Individual Property that is subject of such release is hereinafter referred to as the “Release Property”) from the Lien of the Security Instrument thereon (respective Mortgage to which such Borrower is a party and related the other Loan Documents) upon a bona fide third-party sale of such Individual Property Documents and the release of Borrower’s the Individual Borrower (which owns the applicable Release Property) from all obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditionsconditions precedent:
(a) No Event of Default not less than thirty (30) (but not more than ninety (90)) days prior written notice shall exist as of the date of Borrower’s notice be given to Lender pursuant identifying the Release Property and specifying a date on which it desires to Section 2.5 release such Release Property (cthe “Release Date”); provided, however, that Borrower shall have the right to cancel or extend (by no more than thirty (30) days) such notice by providing Lender with notice of cancellation or extension not less than ten (10) days prior to the scheduled Release Date, provided that Borrower shall pay all of Lender’s costs and no Event of Default exist immediately after the consummation expenses incurred as a result of such releasecancellation or extension;
(b) The amount of all sums due under this Agreement, the outstanding principal balance of Note and under the other Loan Documents up to be prepaid the Release Date, including, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with such release (including, without limitation, reasonable out-of-pocket legal fees and actual out-of-pocket expenses for the review and preparation of any release documents and of the other materials described in Section 2.7(d) below and any related documentation, and any servicing fees, Rating Agency fees or other costs related to such release), shall equal be paid in full on or prior to the Release Price for the applicable Individual PropertyDate;
(c) Borrower shall provide Lender prepay the Loan in an amount equal to the Release Amount for such Release Property (together with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release the payment of the Individual Property, which such notice shall specify applicable Yield Maintenance Premium on or prior to the date, which must be a Business Day (the “Release Open Period Start Date”), on which the release is to be consummated;
(d) On any prepayment received by Lender on a day other than a Payment Date shall include the Release Date, Borrower shall pay to Lender all unpaid amount of interest which would have accrued thereon if such prepayment was made on the portion of the outstanding principal amount of the Loan being prepaid plus, if next Payment Date;
(e) the Release Date is not shall be a Payment DateDate or any other Business Day provided Borrower pays to Lender, all together with the prepayment and any other amounts due hereunder, interest accruing for through the full end of the Interest Accrual Period in which the such Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date)occurs;
(f) In accordance with the release of Lender shall have received evidence demonstrating that after giving effect to such Property Release, each remaining Borrower shall remain a Security Instrument “single purpose entity” in accordance with the terms provisions of Article 6 hereof, ;
(g) Borrower shall submit to Lender, not less than thirty ten (3010) days Business Days prior to the Release Date, a release of Lien of the applicable Mortgage on the Release Property (and related Loan Documents) or, if elected by Borrower, assignment of the applicable Loan Documents as provided below (and release of all other related Loan Documents) for each Individual Property for execution by Lender. Such If Borrower elects to have Lender assign any Mortgage, Lender shall reasonably cooperate with Borrower to split and sever the applicable Loan Documents (if required) and take other reasonable steps necessary to assign the applicable Loan Documents as set forth in Section 2.11 hereof, each in form and substance reasonably acceptable to Lender, such that separate notes and mortgages with respect to only the applicable Borrower and the Release Property in the amount of the applicable Allocated Loan Amount for such Release Property is assigned to the new lender, with the remaining Borrowers and Individual Properties released from the assigned portion of the Loan. Each such release or assignment (as applicable) (i) shall be in a form appropriate in the jurisdiction in which each Individual the Release Property is located and that would (ii) shall be reasonably satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderLender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with a certificate executed by an Officer’s Certificate authorized officer of Borrower certifying that such documentation documentation
(i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests Liens and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower ) and Guarantor shall execute (iii) that the terms and deliver any documents as Lender may reasonably request conditions of this Section 2.7 have been satisfied with respect to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being releasedsuch release;
(gh) As of After giving effect to such release or assignment (as applicable) (including the date of Borrower’s notice to Lender pursuant to Section 2.5(camount prepaid in clause (c) hereof and as of the date of the consummation of such releaseabove), Lender shall have determined that the Debt Service Coverage Ratio Yield for the Individual Properties then remaining that remain subject to the Liens Lien of the Security Instruments Mortgage shall not be greater less than the greater of (i) the Closing Date Debt Service Coverage Ratio for all of the Properties existing on the Closing DateYield, and (ii) the Debt Service Coverage Ratio Yield for all of the then remaining Individual Properties (including each Individual Property immediately prior to be released) immediately preceding the release of each Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender Simultaneously with the Property Release, Borrower shall have received evidence that convey fee simple title to the Individual applicable Release Property to be released shall be conveyed a Person other than Borrower or any of its Affiliates pursuant to an arm’s length agreement sale; provided however, if at a Release Property a Tenant has vacated its premises (or provided notice to Borrower of its intent to vacate its premises), has cancelled or terminated its Lease (or has provided notice of its intent to do so), or an event has occurred with respect to the Release Property such that with the passage of time would result in a Person other than BorrowerMaterial Adverse Effect, Guarantor the applicable Borrower may remain the owner thereof or any such Borrower may convey to an Affiliate thereofof Borrower (and, in either such case, Borrower shall be released from the Loan) and shall not be required to convey pursuant to an arm’s length sale, so long as (i) the Release Amount with respect to such Property Release shall be equal to one hundred twenty percent (120%) of the Allocated Loan Amount for the applicable Individual Property and (ii) the aggregate Allocated Loan Amounts for all Released Properties (whether in one more separate Property Releases) during the term of the Loan shall not exceed $56,250,000.00;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with written certification from Borrower that (A) the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor requirements set forth in this Agreement Section 2.7 have been satisfied and any other Loan Document (B) such Property Release shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall not have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorMaterial Adverse Effect.
Appears in 1 contract
Samples: Loan Agreement (Griffin Capital Essential Asset REIT II, Inc.)
Release of an Individual Property. Except as set forth in Section 2.3After the Release Date, Section 2.6, Section 6.4(eif Borrower has elected to (x) and this Section 2.5, no repayment or prepayment of all or any defease a portion of the Loan shall cause, give rise to a right to require, and the applicable requirements of Section 2.8 hereof and this Section 2.9 have been satisfied or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e(y) below, after the Lockout Permitted Prepayment Date, prepay a portion of the Loan and the applicable requirements of Section 2.7, and provided that no Event of Default shall then exist, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be defeased in accordance with Section 2.8 hereof (or prepaid in connection accordance with such release Section 2.7 hereof) shall equal or exceed the Release Price for the applicable Individual Property, and such defeasance shall be deemed a voluntary defeasance (or, in the case of a prepayment, such prepayment shall be deemed to be a voluntary prepayment) for all purposes hereunder;
(cb) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice shall specify the date, which must be a Business Day Property (the “Release Notice Date”);
(c) Borrower shall defease (or prepay, as applicable,) the portion of the Note equal to the Release Price of the Individual Property being released (together with all accrued and unpaid interest on which the release is to be consummatedprincipal amount being defeased or prepaid, as applicable) in accordance with the terms and conditions of Sections 2.8 hereof (or, in the case of a prepayment, Section 2.7 hereof);
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release DateDefeasance Date (or, in the case of a prepayment, the prepayment date), a release of Lien (and related Loan Documents) for each such Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction each State in which each the Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or assigned, as applicable) (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(ge) As of the date of Borrower’s notice After giving effect to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have reasonably determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than at least equal to the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on twelve (12) full calendar months immediately preceding the Closing Date, (i.e., 2.30); and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each the Individual Property to be released) for the twelve (12) full calendar months immediately preceding the release of each the Individual Property;
(hf) As of the date of Borrower’s notice After giving effect to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have reasonably determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the lesser of (i) the Loan to Value Ratio on the Closing Date (i.e., 46.1%) , and (ii) the Loan to Value Ratio for all of the then remaining Properties (including the Individual Property to be released) immediately preceding the release of the Individual Property;
(g) After giving effect to such release, Lender shall have reasonably determined that the Debt Yield for the Properties then remaining subject to the Liens of the Security Instruments shall be at least equal to the greater of (i) the Debt Yield on the Closing Date (i.e., 14.02%), and (ii) the Debt Yield for all of the then remaining Properties (including the Individual Property to be released) immediately preceding the release of the Individual Property;
(h) After giving effect to such release, Lender shall have reasonably determined that at least 50% of the Underwritable Cash Flow of the Properties then remaining subject to the Liens of the Security Instruments shall be derived from Investment Grade Tenants pursuant to Leases that are not scheduled to expire prior to the Maturity Date;
(i) Borrower shall deliver to Lender (1) a REMIC Opinion with respect to the release of the Individual Property and (2) an opinion of counsel satisfying the Prudent Lender Standard and acceptable the Rating Agencies (issued by counsel satisfying the Prudent Lender Standard and acceptable to the Rating Agencies) with respect to such other matters as may be required by Lender in order to satisfy the Prudent Lender Standard;
(j) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor Borrower or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release SPE Component Entity and that no federal income tax will be imposed on the REMIC Trust as a result of Borrowers owning the proposed Individual Properties not being released shall satisfy all the requirements under Article 5 after giving effect to such release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s reasonable costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;; and
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale The release of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification lien of the respective ratings related Security Instrument shall be permitted under REMIC Requirements in effect immediately prior to such release for as of each of (I) the Securities. Provided that no Default or Event Release Notice Date and (II) the consummation of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
Samples: Loan Agreement (American Realty Capital Trust III, Inc.)
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e(a) and If the requirements of this Section 2.52.10 have been satisfied, and provided that no repayment or prepayment Event of all or any portion Default is then continuing (unless such Individual Property is a Default Property, in which case the provisions of Section 2.10(b) shall govern), Borrower shall have the Loan shall cause, give rise to a right to require, or otherwise result in, obtain the release of any Lien Individual Property (such Individual Property so released, a “Release Property”) from the lien of any the related Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Date, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Release Property (other than those expressly stated to survive), upon the satisfaction (or waiver in writing by Lender in its sole discretion) of each of the following conditionsconditions precedent:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(ci) Borrower shall provide Lender with at least thirty ten (3010) days Business Days (or a shorter period of time if permitted by Lender in its sole discretion) but no more than ninety (90) days days’ prior written notice of its request to obtain a release of a Release Property and identifying the Individual Property, Release Property it desires to release and the date upon which it desires to release such notice shall specify the date, which must be a Business Day Release Property (the “Release Date”), ) which notice may be revoked prior to the proposed Release Date upon delivery by Borrower of written notice to Lender and may be adjourned on which a day-to-day basis; provided that in all cases Borrower shall be responsible to promptly reimburse Lender for the release is to be consummatedreasonable out-of-pocket costs and expenses actually incurred by Lender in connection with the rescission or adjournment of such notice;
(dii) On Borrower shall prepay the Loan in an amount equal to the Release Date, Borrower shall pay to Lender all unpaid Price of the Release Property (together with any accrued interest on the principal amount being prepaid, and if any portion of the outstanding principal amount Loan has been the subject of a Securitization, the payment of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date fallsShortfall);
(eiii) On With respect to a release which occurs on or prior to the Release Open Period Start Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to on the Open Date)amount being prepaid;
(fiv) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty ten (3010) days Business Days (or a shorter period of time if permitted by Lender in its reasonable discretion) prior to the Release Date, a release or assignment of Lien the related Security Instrument (and related Loan Documents) for each Individual such Release Property for execution by Lender. Such release or assignment shall be in a form appropriate in the jurisdiction State in which each Individual the applicable Release Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting satisfies the rights of the releasing lenderPrudent Lender Standard. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms and conditions of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being releasedSection 2.10 have been satisfied;
(gv) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the The Debt Service Coverage Ratio Yield for the Properties then remaining subject to the Liens liens of the Security Instruments after giving effect to such release shall be equal to or greater than 10.0% (the greater “Release Debt Yield”) taking into account the contemporaneous release of (i) the Debt Service Coverage Ratio for all of the Properties existing more than one Individual Property being released on the Closing Datesame date. For the avoidance of doubt, any failure to satisfy a Debt Yield threshold as set forth above may be satisfied by Borrower prepaying the Loan, together with the Yield Maintenance Premium on the amount prepaid and (ii) any Interest Shortfall, in each case, as applicable, in accordance with Section 2.7 in an amount necessary to achieve the Release Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyYield;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(ivi) Lender shall have received evidence that the Individual Release Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any of their respective Affiliates; provided, however, that, the Release Property to be released may be conveyed to an Affiliate thereof;of Borrower if such conveyance is otherwise done on arms’ length terms and if requested by Lender, Borrower shall have provided a New Non-Consolidation Opinion or a so-called “no effect letter” with respect to the then current Non-Consolidation Opinion; and
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(kvii) Lender shall have received payment of all Lender’s reasonable, out-of-pocket costs and expensesexpenses actually incurred, including due diligence review costs and counsel reasonable and out-of-pocket attorneys’ fees and disbursements actually incurred in connection with the release of the Individual any Release Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, it being agreed that Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement responsible for the sale payment of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that all such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist reasonable and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all actual out-of-pocket costs and expenses whether or not the proposed release of such Release Property actually occurs, as allocated between Lender and any Servicer, provided, that, any fees (excluding customary and reasonable third-party due diligence review costs and attorneys’ fees and disbursements referred to above in this clause (vii)) payable to Lender and Servicer incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release, whether or not the proposed release of an Individual such Release Property pursuant actually occurs, shall not exceed $2,000 in the aggregate for contemporaneous releases of one to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender four Release Properties or $10,000 in its sole discretion absent manifest errorthe aggregate for the contemporaneous release of a group of five or more Release Properties.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any portion Following the expiration of the Loan shall causeYield Maintenance Lockout Period, give rise to a right to requireprovided that no Event of Default is then continuing, or otherwise result in, Borrower may cause the release of any Lien of any Security Instrument on any one or more Individual Property. Subject to Section 6.4(e) below, after Properties (each a “Property Release” and the Lockout Date, Borrower may obtain the release of an Individual Property that is subject of such release is hereinafter referred to as the “Release Property”) from the Lien of the Security Instrument thereon (respective Mortgage to which such Borrower is a party and related the other Loan Documents) upon a bona fide third-party sale of such Individual Property Documents and the release of Borrower’s the Individual Borrower (which owns the applicable Release Property) from all obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditionsconditions precedent:
(a) No Event of Default not less than thirty (30) (but not more than ninety (90)) days prior written notice shall exist as of the date of Borrower’s notice be given to Lender pursuant identifying the Release Property and specifying a date on which it desires to Section 2.5 release such Release Property (cthe “Release Date”); provided, however, that Borrower shall have the right to cancel or extend (by no more than thirty (30) days) such notice by providing Lender with notice of cancellation or extension not less than ten (10) days prior to the scheduled Release Date, provided that Borrower shall pay all of Lender’s costs and no Event of Default exist immediately after the consummation expenses incurred as a result of such releasecancellation or extension;
(b) The amount of all sums due under this Agreement, the outstanding principal balance of Note and under the other Loan Documents up to be prepaid the Release Date, including, without limitation, all fees, costs and expenses incurred by Lender and its agents in connection with such release (including, without limitation, reasonable out-of-pocket legal fees and actual out-of-pocket expenses for the review and preparation of any release documents and of the other materials described in Section 2.7(d) below and any related documentation, and any servicing fees, Rating Agency fees or other costs related to such release), shall equal be paid in full on or prior to the Release Price for the applicable Individual PropertyDate;
(c) Borrower shall provide Lender prepay the Loan in an amount equal to the Release Amount for such Release Property (together with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release the payment of the Individual Property, which such notice shall specify applicable Yield Maintenance Premium prior to the date, which must be a Business Day (the “Release Open Period Start Date”), on which the release is to be consummated;
(d) On any prepayment received by Lender on a day other than a Payment Date shall include the Release Date, Borrower shall pay to Lender all unpaid amount of interest which would have accrued thereon if such prepayment was made on the portion of the outstanding principal amount of the Loan being prepaid plus, if next Payment Date;
(e) the Release Date is not shall be a Payment DateDate or any other Business Day provided Borrower pays to Lender, all together with the prepayment and any other amounts due hereunder, interest accruing for through the full end of the Interest Accrual Period in which the such Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date)occurs;
(f) In accordance with the release of Lender shall have received evidence demonstrating that after giving effect to such Property Release, each remaining Borrower shall remain a Security Instrument “single purpose entity” in accordance with the terms provisions of Article 6 hereof, ;
(g) Borrower shall submit to Lender, not less than thirty ten (3010) days Business Days prior to the Release Date, a release of Lien of the applicable Mortgage on the Release Property (and related Loan Documents) or, if elected by Borrower, assignment of the applicable Loan Documents as provided below (and release of all other related Loan Documents) for each Individual Property for execution by Lender. Such If Borrower elects to have Lender assign any Mortgage, Lender shall reasonably cooperate with Borrower to split and sever the applicable Loan Documents (if required) and take other reasonable steps necessary to assign the applicable Loan Documents as set forth in Section 2.11 hereof, each in form and substance reasonably acceptable to Lender, such that separate notes and mortgages with respect to only the applicable Borrower and the Release Property in the amount of the applicable Allocated Loan Amount for such Release Property is assigned to the new lender, with the remaining Borrowers and Individual Properties released from the assigned portion of the Loan. Each such release or assignment (as applicable) (i) shall be in a form appropriate in the jurisdiction in which each Individual the Release Property is located and that would (ii) shall be reasonably satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderLender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with a certificate executed by an Officer’s Certificate authorized officer of Borrower certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests Liens and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower ) and Guarantor shall execute (iii) that the terms and deliver any documents as Lender may reasonably request conditions of this Section 2.7 have been satisfied with respect to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being releasedsuch release;
(gh) As of After giving effect to such release or assignment (as applicable) (including the date of Borrower’s notice to Lender pursuant to Section 2.5(camount prepaid in clause (c) hereof and as of the date of the consummation of such releaseabove), Lender shall have determined that the Debt Service Coverage Ratio Yield for the Individual Properties then remaining that remain subject to the Liens Lien of the Security Instruments Mortgage shall not be greater less than the greater of (i) the Closing Date Debt Service Coverage Ratio for all of the Properties existing on the Closing DateYield, and (ii) the Debt Service Coverage Ratio Yield for all of the then remaining Individual Properties (including each Individual Property immediately prior to be released) immediately preceding the release of each Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender Simultaneously with the Property Release, Borrower shall have received evidence that convey fee simple title to the Individual applicable Release Property to be released shall be conveyed a Person other than Borrower or any of its Affiliates pursuant to an arm’s length agreement sale; provided however, if at a Release Property a Tenant has vacated its premises (or provided notice to Borrower of its intent to vacate its premises), has cancelled or terminated its Lease (or has provided notice of its intent to do so), or an event has occurred with respect to the Release Property such that with the passage of time would result in a Person other than BorrowerMaterial Adverse Effect, Guarantor the applicable Borrower may remain the owner thereof or any such Borrower may convey to an Affiliate thereofof Borrower (and, in either such case, Borrower shall be released from the Loan) and shall not be required to convey pursuant to an arm’s length sale, so long as (i) the Release Amount with respect to such Property Release shall be equal to one hundred twenty percent (120%) of the Allocated Loan Amount for the applicable Individual Property and (ii) the aggregate Allocated Loan Amounts for all Released Properties (whether in one more separate Property Releases) during the term of the Loan shall not exceed $84,375,000;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with written certification from Borrower that (A) the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor requirements set forth in this Agreement Section 2.7 have been satisfied and any other Loan Document (B) such Property Release shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall not have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorMaterial Adverse Effect.
Appears in 1 contract
Samples: Loan Agreement (Griffin Capital Essential Asset REIT, Inc.)
Release of an Individual Property. Except as set forth in Section 2.3After the Permitted Defeasance Date, Section 2.6, Section 6.4(e) and this Section 2.5, no repayment or prepayment of all or any if Borrower has elected to defease a portion of the Loan and the applicable requirements of Section 2.4 hereof and this Section 2.5 have been satisfied, and provided that no Event of Default shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Datethen exist, Borrower may obtain the release of an Individual Property (other than the Sunrise Property) from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid defeased in connection accordance with such release Section 2.4 hereof shall equal or exceed the Release Price for the applicable Individual Property, and such defeasance shall be deemed a voluntary defeasance for all purposes hereunder;
(cb) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice ;
(c) Borrower shall specify defease the date, which must be a Business Day portion of the Note equal to the Release Price of the Individual Property being released (together with all accrued and unpaid interest on the “Release Date”), on which principal amount being defeased) in accordance with the release is to be consummatedterms and conditions of Sections 2.4.1 and 2.4.2 hereof;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release Defeasance Date, a release of Lien (and related Loan Documents) for each such Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction each State in which each the Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(ge) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c2.5.2(b) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on twelve (12) full calendar months immediately preceding the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each the Individual Property to be released) for the twelve (12) full calendar months immediately preceding the release of each the Individual Property;
(hf) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c2.5.2(b) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than at least equal to the lesser of (i) the Loan to Value Ratio immediately preceding the Closing Date, and (ii) the Loan to Value Ratio for all of the then remaining Properties (including the Individual Property to be released) immediately preceding the release of the Individual Property;
(ig) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor Borrower or any Affiliate thereofPrincipal;
(jh) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(ki) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;; and
(lj) On and after the date of the consummation of the Immediately following such release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Allocated Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale Amount of the Individual Property being released; and
released (othe “Release Property”) Borrower shall have delivered confirmation in writing from be reduced to zero and the applicable Rating Agencies Allocated Loan Amounts of the Individual Properties remaining subject to the effect that Lien of a Security Instruments immediately following such release will not result in a downgrading, withdrawal or qualification shall be reduced pro rata by the difference between the Release Price of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Release Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed the original Allocated Loan Amount of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorthe Release Property.
Appears in 1 contract
Samples: Loan Agreement (Netreit, Inc.)
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e(a) and this Section 2.5, no repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Date, Borrower may obtain the release (a “Partial Release”) of (A) an Individual Property from the Lien of the Mortgage and the other Security Instrument thereon Documents and (B) from and related Loan Documents) upon a bona fide third-party sale after the date of such release, unless the applicable Property Guarantor shall own any Remaining Individual Property and Properties, the release of Borrower’s obligations under the applicable Property Guarantor from the Loan Documents (other than with respect to such Individual Property (other than those expressly stated to survive), obligations that specifically survive repayment of the Debt or any portion thereof) upon the satisfaction of each the following conditions (any one or more of which may be waived by Administrative Agent and Arrangers upon consent of the following conditions:Required Lenders):
(ai) No Event Borrower shall have given Administrative Agent at least ten (10) days’ prior notice to the effective date of Default shall exist as of such Partial Release (the “Partial Release Date”) setting forth the date of Borrowerthe Partial Release and identifying the Individual Property to be released (the “Released Property”) from the Lien of the Mortgage and the other Security Documents and the Property Guarantor that owns such Individual Property, together with drafts of any applicable release documents to release the Release Property and, unless the applicable Property Guarantor shall own any Remaining Individual Properties, the applicable Property Guarantor from the other Loan Documents in favor of Administrative Agent (which release documents shall be subject to Administrative Agent’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such releasereasonable approval);
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(cii) Borrower shall provide Lender with at least thirty have (30A) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice shall specify the date, which must be a Business Day (the “Release Date”), on which the release is to be consummated;
(d) On the Release Date, Borrower shall pay to Lender paid all accrued and unpaid interest on the portion of the Loans being prepaid together with any applicable Breakage Costs and (B) made a prepayment of the outstanding principal amount of the Loan being prepaid plusLoans in an amount not less than the applicable Partial Release Price, if together with the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance applicable Prepayment Premium (if such payment is made prior to the Open Dateany);
(fiii) In accordance with On the release date Borrower delivers to Administrative Agent notice of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to proposed Partial Release and on the Partial Release Date, a release no Event of Lien (and related Loan Documents) for each Individual Property for execution by Lender. Such release Default shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory continuing;
(iv) With respect to a prudent institutional lender and shall contain standard provisions, if any, protecting Partial Release of (A) a Key Property or (B) an Other Property on or after the rights date that the aggregate amount of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires Partial Release Prices paid to be delivered Administrative Agent by Borrower pursuant to Section 2.6(1)(a)(i) in connection with such releaseOther Properties is greater than $200,000,000, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject is, in each case, equal to the Liens of the Security Instruments shall be or greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date1.30 to 1.00 after giving effect to such Partial Release, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender Administrative Agent shall have received evidence of the same that the Individual Property is reasonably acceptable to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereofAdministrative Agent;
(jv) Either (i) Both immediately prior to and after giving effect to each Partial Release of a Lender 80% Determination Key Property or Other Property, the Corporate Revolver Borrower shall be in connection compliance with such release the Financial Covenants, and Administrative Agent shall have been made at Borrower’s expense received evidence of the same that is reasonably acceptable to Administrative Agent;
(vi) With respect to a release of the Individual Properties identified as the Mayfair Office Component, the Pioneer Office Component or the Southwest Office Component, as applicable, such applicable Individual Properties shall constitute a separate tax lot (iior, if not a separate tax lot, the applicable Property Guarantor has taken all action required under applicable law required to be taken in order for such Individual Properties to be designated a separate tax lot other than recordation of the deed to the applicable transferee);
(vii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only have paid to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially Administrative Agent all reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s out-of-pocket costs and expenses, expenses (including due diligence review costs actual and counsel fees and disbursements reasonable attorneys’ fees) incurred by Administrative Agent in connection with the release of the Individual Release Property from the lien Lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewithLoan Documents;
(lviii) On and after In the date event that the applicable Property Guarantor shall own any of the consummation Remaining Individual Properties, the applicable Property Guarantor shall, simultaneously with the release of the releaseReleased Property, Borrower shall be in compliance with Section 4.1.36 of this Agreementtransfer title to the Released Property to Person(s) other than a Property Guarantor;
(mix) Borrower In the event that (a) the Released Property is the Pioneer Office Component, the Mayfair Office Component or the Southwest Office Component, (b) prior to the Partial Release Date, the applicable Property Guarantor shall have commenced one or more Alterations to the Pioneer Retail Component, the Mayfair Retail Component or the Southwest Retail Component, as the case may be, and (c) as a result of the release of the Pioneer Office Component, the Mayfair Office Component or the Southwest Office Component, as the case may be, the applicable Property Guarantor would be required to deliver an Alteration Indemnity or such other collateral pursuant to the terms of Section 9.14(1), then the applicable Property Guarantor shall have delivered to Lender Administrative Agent an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any Alteration Indemnity or such other Loan Document shall be true and correct on and collateral as of the date of the consummation of the release;
(n) On or prior required pursuant to the date terms of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being releasedSection 9.14(1); and
(ox) Borrower and Property Guarantors shall have executed and delivered confirmation such documents as Administrative Agent may reasonably request relating to the Partial Release; Notwithstanding the foregoing, under no circumstances shall (a) any Partial Release occur that would result in writing the outstanding aggregate principal balance of the Loans being less than $350,000,000 after giving effect to such Partial Release, (b) any Partial Release occur that would result in there being fewer than five (5) Remaining Individual Properties after giving effect to such Partial Release, (c) the Individual Property identified as the Mayfair Retail Component be released from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification Lien of the respective ratings in effect immediately prior to such release for Loan Documents unless the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property identified as the Mayfair Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and such assignment shall be without recoursethe applicable Partial Release Price therefor paid to Administrative Agent, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an d) the Individual Property pursuant identified as the Pioneer Retail Component be released from the Lien of the Loan Documents unless the Individual Property identified as the Pioneer Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and the applicable Partial Release Price therefor paid to this Section 2.5Administrative Agent, Lender shall readjust any required reserve payments or (e) the Individual Property identified as the Southwest Retail Component be released from the Lien of the Loan Documents unless the Individual Property identified as the Southwest Office Component has been previously, or is simultaneously, released from the Lien of the Security Documents and any amortization payments the applicable Partial Release Price therefor paid to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest errorAdministrative Agent.
Appears in 1 contract
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e) If Mortgage Borrower has elected to release an Individual Property from the Lien of the Security Instrument thereon and the requirements of this Section 2.52.6 have been satisfied, and provided that no repayment or prepayment Event of all or any portion of the Loan Default shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) below, after the Lockout Datethen exist, Borrower may shall be entitled to (x) permit Mortgage Borrower to obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents), (y) upon a bona fide third-party sale permit Mezzanine A Borrower to obtain the release of the Mezzanine A Collateral corresponding to the release of such Individual Property and (z) the release of Borrowerthe applicable Borrower Entity’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(ai) No Event All conditions to the release of Default shall exist as such Individual Property from the Lien of the date Security Instrument thereon shall have been satisfied in accordance with the terms of Borrower’s notice to the Mortgage Loan Documents (as independently determined by Lender pursuant to Section 2.5 (cin its reasonable discretion) and no Event (ii) all conditions to the release of Default exist immediately after such Individual Property shall have been satisfied in accordance with the consummation terms of Section 2.6 of the Mezzanine A Loan Agreement with respect to such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days days’ but no more than ninety (90) days days’ prior written notice of its request the release of any Individual Property permitted under this Section 2.6;
(c) On or prior to obtain a the release of the applicable Individual Property, which Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Release Price for such notice shall specify Individual Property, together with (i) all accrued and unpaid interest calculated at the dateApplicable Interest Rate on the amount of principal being prepaid through and including the date of the release, which must be (ii) if such date is a Business Day date other than a Payment Date, the Interest Shortfall, (iii) Breakage Costs, if any, without duplication of any sums paid pursuant to the “Release Date”preceding clause (ii); (iv) the applicable Spread Maintenance Payment (if any); and (v) all other sums due under this Agreement, on which the release is to be consummatedNote or the other Loan Documents in connection with a prepayment;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less later than thirty ten (3010) days prior to the Release Date, a release of Lien (the applicable Individual Property, an amendment to the Pledge Agreement and related Loan Documents) for UCC-3 Financing Statements each Individual Property for execution by Lender. Such amending Pledge Agreements and the UCC Financing Statements to reflect the release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lenderapplicable Borrower Entity. In addition, Borrower shall provide all other customary documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(e) Intentionally Omitted;
(f) Intentionally Omitted;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual PropertyIntentionally Omitted;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all of Lender’s reasonable costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(li) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being releasedIntentionally Omitted; and
(oj) Borrower Immediately following such release, the Allocated Loan Amount for the Individual Property released (the “Released Individual Property”) shall have delivered confirmation in writing from be reduced to zero, and the applicable Rating Agencies Allocated Loan Amount for each of the Individual Properties remaining subject to the effect that Lien of the Security Instruments immediately following such release will not result in a downgrading, withdrawal or qualification shall be reduced by such Individual Property’s pro rata share of the respective ratings in effect immediately prior to such release for difference between the Securities. Provided that no Default or Event Release Price of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an the Released Individual Property and such assignment shall be without recoursethe original Allocated Loan Amount for the Released Individual Property. For purposes of the immediately preceding sentence, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property’s “pro rata share” shall mean a fraction, the numerator of which is the Allocated Loan Amount for such Individual Property prior to giving effect to any reduction pursuant to this Section 2.52.6(j), Lender shall readjust and the denominator of which is the sum of the Allocated Loan Amounts, prior to giving effect to any required reserve payments and any amortization payments reduction pursuant to reflect such releasethis Section 2.6(j), such adjustments to be determined by Lender in its sole discretion absent manifest errorfor all of the Individual Properties other than the Released Individual Property.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Release of an Individual Property. Except as set forth in Section 2.3, Section 2.6, Section 6.4(e), Section 6.4(f) and this Section 2.5, no repayment or prepayment of all or any portion of the Loan shall cause, give rise to a right to require, or otherwise result in, the release of any Lien of any Security Instrument on any Individual Property. Subject to Section 6.4(e) and Section 6.4(f) below, after the Lockout Date, Borrower may obtain the release of an Individual Property from the Lien of the Security Instrument thereon (and related Loan Documents) upon a bona fide third-party sale of such Individual Property and the release of Borrower’s obligations under the Loan Documents with respect to such Individual Property (other than those expressly stated to survive), upon the satisfaction of each of the following conditions:
(a) No Event of Default shall exist as of the date of Borrower’s notice to Lender pursuant to Section 2.5 (c) and no Event of Default exist immediately after the consummation of such release;
(b) The amount of the outstanding principal balance of the Loan to be prepaid in connection with such release shall equal the Release Price for the applicable Individual Property;
(c) Borrower shall provide Lender with at least thirty (30) days but no more than ninety (90) days prior written notice of its request to obtain a release of the Individual Property, which such notice shall specify the date, which must be a Business Day (the “Release Date”), on which the release is to be consummated;
(d) On the Release Date, Borrower shall pay to Lender all unpaid interest on the portion of the outstanding principal amount of the Loan being prepaid plus, if the Release Date is not a Payment Date, all interest accruing for the full Interest Accrual Period in which the Release Date falls;
(e) On the Release Date, Borrower shall pay to Lender the Yield Maintenance Premium (if such payment is made prior to the Open Date);
(f) In accordance with the release of a Security Instrument in accordance with the terms hereof, Borrower shall submit to Lender, not less than thirty (30) days prior to the Release Date, a release of Lien (and related Loan Documents) for each Individual Property for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which each Individual Property is located and that would be satisfactory to a prudent institutional lender and shall contain standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all applicable Legal Requirements, (ii) will, following execution by Lender and recordation thereof, effect such releases in accordance with the terms of this Agreement, and (iii) will not impair or otherwise adversely affect the Liens, security interests and other rights of Lender under the Loan Documents not being released (or as to the parties to the Loan Documents and Properties subject to the Loan Documents not being released). Borrower and Guarantor shall execute and deliver any documents as Lender may reasonably request to evidence the continued validity of the Liens, security interests and other rights of Lender under the Loan Documents not being released;
(g) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be greater than the greater of (i) the Debt Service Coverage Ratio for all of the Properties existing on the Closing Date, and (ii) the Debt Service Coverage Ratio for all of the then remaining Properties (including each Individual Property to be released) immediately preceding the release of each Individual Property;
(h) As of the date of Borrower’s notice to Lender pursuant to Section 2.5(c) hereof and as of the date of the consummation of such release, Lender shall have determined that the Loan to Value Ratio for the Properties then remaining subject to the Liens of the Security Instruments shall be no greater than the Loan to Value Ratio immediately preceding the Closing Date;
(i) Lender shall have received evidence that the Individual Property to be released shall be conveyed pursuant to an arm’s length agreement to a Person other than Borrower, Guarantor or any Affiliate thereof;
(j) Either (i) a Lender 80% Determination in connection with such release shall have been made at Borrower’s expense or (ii) Borrower shall deliver an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining that any REMIC Trust formed pursuant to a Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of the release and that no federal income tax will be imposed on the REMIC Trust as a result of the proposed release. In connection with such opinion, any determination of the fair market value of the Properties required by the provisions regarding REMIC Trusts shall be made by Lender based on an appraisal or other commercially reasonable valuation method selected by Lender;
(k) Lender shall have received payment of all Lender’s costs and expenses, including due diligence review costs and counsel fees and disbursements incurred in connection with the release of the Individual Property from the lien of the related Security Instrument and the review and approval of the documents and information required to be delivered in connection therewith;
(l) On and after the date of the consummation of the release, Borrower shall be in compliance with Section 4.1.36 of this Agreement;
(m) Borrower shall have delivered to Lender an Officer’s Certificate stating that the representations and warranties of Borrower and Guarantor set forth in this Agreement and any other Loan Document shall be true and correct on and as of the date of the consummation of the release;
(n) On or prior to the date of the consummation of the release, Borrower shall have delivered to Lender a true, correct and complete copy of the final executed closing settlement statement for the sale of the Individual Property being released; and
(o) Borrower shall have delivered confirmation in writing from the applicable Rating Agencies to the effect that such release will not result in a downgrading, withdrawal or qualification of the respective ratings in effect immediately prior to such release for the Securities. Provided that no Default or Event of Default shall exist and be continuing, upon written request of Borrower, Lender shall reasonably cooperate in assigning any mortgage and/or deed of trust in connection with release of an Individual Property and such assignment shall be without recourse, representation or warranty (except with respect to Lender’s right, title and interest in and to such mortgage and/or deed of trust and Lender’s authority to transfer its interest therein), and Borrower shall pay all costs and expenses incurred by Lender in connection with such assignment and any actions related thereto. In connection with any release of an Individual Property pursuant to this Section 2.5, Lender shall readjust any required reserve payments and any amortization payments to reflect such release, such adjustments to be determined by Lender in its sole discretion absent manifest error.
Appears in 1 contract
