Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Loan Documents) and the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions: (i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note; (ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that (A) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower; (iii) Intentionally deleted; (iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”); (v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements; (vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”); (vii) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties; (viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided; (ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property; (x) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel; (xi) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property; (xii) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel; (xiii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects; (xiv) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects; (xv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and (xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof. (b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007: (i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable; (ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion; (iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and (iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A)
(1) Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mortgage Loan Agreement with respect to a release of the Out-Parcel to be released pursuant to Section 2.5.2 of the Mortgage Loan Agreement and (2) Mortgage Lender has delivered (or is simultaneously delivering) such release to Mortgage Borrower; (B) (1) Mezzanine A B Borrower has complied with all of the
(1) Mezzanine C Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A C Loan Agreement with respect to a release of Mezzanine A C Borrower’s obligations under the Mezzanine A C Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B2) Mezzanine A C Lender has delivered (or is simultaneously delivering) such release to Mezzanine A C Borrower; (D)
(1) Mezzanine D Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine D Loan Agreement with respect to a release of Mezzanine D Borrower’s obligations under the Mezzanine D Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine D Lender has delivered (or is simultaneously delivering) such release to Mezzanine D Borrower; and (E)
(1) Mezzanine E Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine E Loan Agreement with respect to a release of Mezzanine E Borrower’s obligations under the Mezzanine E Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine E Lender has delivered (or is simultaneously delivering) such release to Mezzanine E Borrower;
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan, the Mortgage Loan, the Mezzanine B Loan, the Mezzanine C Loan, the Mezzanine D Loan and the Mezzanine A E Loan have each been prepaid (or an amount has been delivered to Lender, Mortgage Lender, Mezzanine B Lender, Mezzanine C Lender, Mezzanine D Lender and Mezzanine A E Lender to be applied towards the prepayment of the Loan, the Mortgage Loan, the Mezzanine B Loan, the Mezzanine C Loan, the Mezzanine D Loan and the Mezzanine A E Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents, the Mortgage Loan Documents, the Mezzanine B Loan Documents, the Mezzanine C Loan Documents, the Mezzanine D Loan Documents and the Mezzanine A E Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A B Borrower, Mezzanine A Principal B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal, Mezzanine E Borrower or Mezzanine A PledgorE Principal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out-Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A) Mezzanine A Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Mortgage Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 of the Mortgage Loan Agreement and (B) Mezzanine A Mortgage Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Mortgage Borrower;.
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Mortgage Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Mortgage Lender to be applied towards the prepayment of the Loan and the Mezzanine A Mortgage Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Mortgage Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Mortgage Borrower, Mezzanine A Mortgage Principal or Mezzanine A PledgorPrincipal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out-Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. Upon the request of Borrowers, Lender shall release one or more Out-Parcels (adefined below) Provided no Event from the lien of Default has occurred the related Security Instrument and is continuing, Borrower may obtain the execute instruments of release of or partial release in duly recordable form (an "Out-Parcel from the Lien Release") provided that Borrowers shall, at their sole cost and expense, comply with all of the Security Instrument thereon (following terms, conditions and related Loan Documents) and the release of Borrower’s obligations under the Loan Documents provisions with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditionsand requested OutParcel Release:
(ia) Borrower at the time of any such Out-Parcel Release, no Event of Default shall provide Lender with at least twenty have occurred and be continuing under the Note, the Security Instruments or any of the other Loan Documents;
(20b) Business Days but no more than ninety (90) days prior written notice ingress to and egress from all portions of its request to obtain a release the Property of which the Out-Parcel. Notwithstanding Parcel forms a part remaining after the foregoing, Borrower Out-Parcel Release (the "Remaining Property") shall be permitted the right to rescind and revoke or postpone such noticeover fully dedicated public roads;
(c) Borrowers shall have obtained: (i) (x) subdivision, provided that Borrower pays all Breakage Costs zoning, building and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an other governmental approvals necessary or required so that the Out-Parcel and Borrower’s failure to prepay the Remaining Property, shall, upon such Out-Parcel Release, together and separately, satisfy and comply, in all or material respects and so that any portion immaterial non-compliance does not adversely affect the lien of the unpaid principal balance Security Instruments or the value or utility of the NoteProperties as regional power centers, with all the applicable subdivision, zoning, building, environmental protection and all other applicable laws, rules, regulations and federal, state or local requirements, including sewer capacity requirements, or (y) a legal opinion by counsel reasonably satisfactory to Lender, that the Out-Parcel and the Remaining Property are each entitled to be used and occupied as of right without reference to or reliance on the other parcel, and (ii) either a legal opinion by counsel reasonably satisfactory to Lender stating that, or an endorsement to the title insurance policy insuring the lien of the related Security Instrument insuring that, the Out-Parcel has been designated, assessed and taxed as a separate tax lot independent from the Remaining Property;
(iid) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that (A) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as prior to the Out-Parcel Release, Borrowers shall prepare and provide to be released pursuant Lender: (i) subdivision map(s) of all those portions of the Property which are approved by all governmental and quasi-governmental authorities having jurisdiction over the OutParcel and/or the Remaining Property, whose approval as to this Section 2.5.2 such plans and maps is required; and (Bii) Mezzanine A Lender has delivered (copies of each and all proposed easements and cross-easements and mutual or is simultaneously delivering) such release to Mezzanine A Borrower;
(iii) Intentionally deleted;
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to non-exclusive easements for ingress, egress, access, pedestrian walkways, parking, traffic flow, utilities and services and utilities shared by the Remaining Property and the Out-Parcel Price for and the applicable Outlike which may be required by any governmental or quasi-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”)governmental authority having jurisdiction or which are necessary or advisable;
(ve) Borrower such subdivision map(s) shall submit to Lendershow such parking structures and parking layouts as will afford, not less than ten (10) Business Days prior to the date of such release, a release of Lien Improvements (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate as defined in the State in which such Out-Parcel is Security Instruments) located and shall contain standard provisionson the Remaining Property, if any, protecting the rights equivalent of the releasing lender. In addition, Borrower shall provide all other documentation Lender reasonably requires exclusive use of the aggregate number of parking spaces to be delivered provided on the Property under all Leases (as defined in the Security Instruments) affecting the Remaining Property, and the number of parking spaces required by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation is in compliance with all the then applicable Legal Requirementszoning requirements for the Remaining Property;
(vif) After giving effect Borrowers shall provide Lender with such surveys, drawings, plans, specifications, proposed easements and consents, certificates and agreements, such legal opinions from attorneys acceptable to Lender and such release, other evidence as Lender shall have determined may reasonably request or require to determine that the Debt Service Coverage Ratio for the Properties then remaining subject to the Liens foregoing conditions have been satisfied;
(g) all Leases demising any part of the Security Instruments Remaining Property shall be at least equal to: (A) if, after giving remain in full force and effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original principal balance of the Loan and unaffected in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the Debt Service Coverage Ratio any manner as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release a result of the Out-Parcel Release;
(h) all Operating Agreements (as defined in the “Out-Parcel DSCR Test”). Notwithstanding Security Instruments) affecting all or any part of the foregoing, Remaining Property or the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan remain in full force and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender effect and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, remain otherwise unaffected as a portion result of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”)Release;
(viii) Borrowers shall deliver to Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted EncumbrancesSecurity Instruments, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Properties remaining encumbered by the lien of the Security Instruments, including the Remaining Property, which evidence may be in the form of including without limitation a “"bring down” " or “"date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by " of the title insurance company that issued policies insuring the Title Insurance Policy relating liens of the Security Instruments on such remaining Properties;
(j) The applicable Borrowers shall simultaneously with the Out-Parcel Release transfer title to the Remaining Out-Parcel to a Release Premises Transferee and such Release Premises Transferee shall assume all obligations and liabilities (other than those related to the Notes, which the Out-Parcel is being released from) related to the Out-Parcel, if any, from and after the date of such transfer and such third party Release Premises Transferee shall erect and operate additional structures whose use is integrated and consistent with the use of the related Property;
(xk) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into pay all reciprocal easementsof Lender's costs and expenses (including reasonable counsel fees and disbursements) incurred in connection with Under's review of the foregoing items, cross-easements the determination of the satisfaction of such conditions and mutual or non-exclusive easements (each of which shall be otherwise incurred in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by connection with the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-ParcelRelease;
(xil) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xii) Borrower Borrowers shall have delivered to Lender evidence that would be reasonably satisfactory to (i) a prudent institutional mortgage loan lender certification of Borrowers that the release Borrowers have reasonably determined that the use of the Out-Parcel will not violate any term or provision of any Lease in effect at that is the Remaining Property at the time of the release of the Out-Parcel;
(xiii) Borrower shall have delivered, or caused to be delivered, a survey subject of the Out-Parcel and Release shall not cause a material decrease in the Remaining Net Operating Income of the applicable Property, which survey determination shall include a metes be based on the changes to the related Property's base rents and bounds description common area contributions directly caused by the intended use of the Out-Parcel and being released without regard to any percentage rents, which Borrower may assume shall remain constant, together with such documentation supporting the Remaining Property and shall otherwise be in basis of such form determination as would may be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
requested by Lender, and (xivii) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xv) if the Loan is part of a Securitization, an opinion of counsel acceptable to written confirmation from the Rating Agencies that the release of the such Out-Parcel does Release shall not constitute result in a “significant modification” downgrade, withdrawal or qualification of the Loan under Section 1001 of rating then assigned to the Code or otherwise cause a tax to be imposed on a “prohibited transaction” Securities by any REMIC Trustthe Rating Agencies; and
(xvim) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the such Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment DateInstrument, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate promptly after: (i) portions of one or more Individual Properties that are vacantall such easements, non-incoming producing consents and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) rights as described above shall have been obtained; and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following requirements of this paragraph 7 have been satisfied. All instruments of release shall be in duly recordable form and contain such covenants, conditions on or before September 30, 2007:
(i) Lender and restrictions and shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal reserve such rights and easements with respect to each the OutParcel as are necessary to protect and preserve Lender's interests in the Remaining Property after any such Improved Parcel release. With respect to such items requiring Lender's approval in this Section 7, if Lender shall fail to either approve, disapprove or otherwise respond to Borrowers' written request for such approval and Unimproved Parcel which shows the appraised value delivery by Borrowers to Lender of all such maps, plans, easements or cross easements and all appropriate documentation relating to such request and such items, within forty-five (45) days of Lender's receipt of such Improved Parcel request and all such maps, plans, easements or Unimproved Parcel, cross easements as applicablethe case may be, and the appraised value of the Individual Property of which all such Improved Parcel or Unimproved Parcel constitutes a portion thereofdocumentation and information, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description Lender's approval with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey request shall be satisfactory to Lender in its reasonable discretiondeemed given; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expensesprovided, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with however, notwithstanding the review and foregoing, Lender's consent or approval or deemed consent or approval of the documents any item shall not diminish, reduce or be deemed a waiver of Borrowers' obligation to comply with each and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcelevery other term, Borrower condition and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitizationprovision set forth herein.
Appears in 1 contract
Samples: Loan Agreement (Developers Diversified Realty Corp)
Release of Out-Parcels. (a) Provided no Event of Default Lender acknowledges that Grantor has occurred and is continuing, Borrower may obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Loan Documents) and the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted requested the right to rescind and revoke or postpone such noticesublease (the "OUT PARCEL SUBLEASE") a certain parcel of land described on Schedule V hereto (as same may be modified with Lender's approval, provided that Borrower pays all Breakage Costs and all the "OUT PARCEL") consistent with certain obligations of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request Grantor under the Ground Lease. Lender hereby agrees that, subject to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that (A) Mezzanine A Borrower has complied with all of the terms and conditions set forth in this Section 2.5.2 2.7, Grantor may sublease the Out Parcel and that it will subordinate the Lien of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower;
(iii) Intentionally deleted;
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien Mortgage (and the related Loan Documents) encumbering the Property to the ground lease covering the Out Parcel, provided that (a) no Event of Default has occurred or is continuing, (b) Grantor provides Lender with a written request for such Out-Parcel for execution by Lendera release, and (c) Grantor satisfies within ninety (90) days of the date Lender receives such written request each of the conditions listed on Schedule VI hereof (the "OUT PARCEL SUBLEASE CONDITIONS"). Such release In the event the foregoing conditions shall be in a form appropriate in satisfied, Lender shall agree that it will subordinate the State in which such Out-Parcel is located and shall contain standard provisions, if any, protecting Lien of its Mortgage to the rights of the releasing lender. In additionOut Parcel Developer, 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to such release, Lender shall have determined that the Debt Service Coverage Ratio for Out Parcel Developer may finance and encumber its rights under the Properties then remaining subject to Out Parcel Sublease without the Liens consent of the Security Instruments shall be at least equal to: (A) ifLender, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date that Lender will execute and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan deliver subordination and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(vii) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(x) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xi) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument disturbance agreements on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xii) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xiv) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xv) if the Loan is part of a Securitization, an opinion of counsel terms acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection discretion with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Out Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicableDeveloper's lenders, that was delivered to Out Parcel Developer may lease its improvements without the consent of Lender and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for tenants may finance and encumber their rights under such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon leases without the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts consent of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.Lender. 26
Appears in 1 contract
Samples: Loan Agreement (Inland Western Retail Real Estate Trust Inc)
Release of Out-Parcels. (a) Provided no Event of Default Lender acknowledges that Home Depot has occurred the right to purchase the Home Depot Out Parcel pursuant to its lease, and is continuing, Borrower may obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Loan Documents) and the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower that Grantor shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request be required to obtain a release of the Out-ParcelHome Depot Out Parcel in the event that Home Depot exercises that right. Notwithstanding Lender hereby agrees that, notwithstanding the foregoingprovisions of Section 2.5 hereof, Borrower shall be permitted the right subject to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that (A) Mezzanine A Borrower has complied with all of the terms and conditions set forth in this Section 2.5.2 of the Mezzanine A Loan Agreement with respect to 2.7, Grantor may obtain a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to Lien of the Out-Parcel to be released pursuant to this Section 2.5.2 and (B) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower;
(iii) Intentionally deleted;
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien Mortgage (and the related Loan Documents) encumbering the Property from the Home Depot Out Parcel, provided that (a) no Event of Default has occurred or is continuing, (b) Grantor provides Lender with a written request for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in release, (c) Grantor delivers to Lender the State in which such Out-Parcel is located Home Depot Exercise Consideration, and shall contain standard provisions, if any, protecting the rights (d) Grantor satisfies within thirty (30) days of the releasing lender. In addition, date Lender receives such written request each of the conditions listed on Schedule V hereof (the "Home Depot Out Parcel Release Conditions")."
(b) Lender acknowledges that Borrower shall provide all other documentation Lender reasonably requires has requested the right to obtain a future release of one or more currently unimproved portions of the Property to be delivered by Borrower in connection with such releasedelineated after the Closing Date (individually or collectively, together with an Officer’s Certificate certifying that such documentation is in compliance with all applicable Legal Requirements;
(vi) After giving effect to such releaseany appurtenant easements approved by Lender, the "Out Parcel"). Lender shall have determined that hereby agrees that, notwithstanding the Debt Service Coverage Ratio for the Properties then remaining provisions of Section 2.5 hereof, subject to the Liens of the Security Instruments shall be at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date terms and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(vii) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(x) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xi) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xii) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xiv) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on 2.7, Borrower may obtain a Payment Date, Lender shall apply release of the Out-Parcel Prepayment Lien of the Mortgage (and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(arelated Loan Documents) on any day other than a Payment Date, Lender shall deposit such funds into encumbering the Property Release Fund to be held and applied by Lender in accordance with from the terms of Section 7.7 hereof.
Out Parcel, provided that (ba) Provided no Event of Default shall existhas occurred or is continuing, (b) Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacantprovides Lender with a written request for such a release, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (iic) portions Borrower satisfies within ninety (90) days of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each the date Lender receives such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of written request each of the following conditions listed on or before September 30, 2007:
Schedule VI hereof (i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved "Out Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(bRelease Conditions"). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization."
Appears in 1 contract
Samples: Loan Agreement (Inland Western Retail Real Estate Trust Inc)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A)
(1) Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mortgage Loan Agreement with respect to a release of the Out-Parcel to be released pursuant to Section 2.5.2 of the Mortgage Loan Agreement and (2) Mortgage Lender has delivered (or is simultaneously delivering) such release to Mortgage Borrower; (B)
(1) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B2) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower; (C)
(1) Mezzanine B Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine B Loan Agreement with respect to a release of Mezzanine B Borrower’s obligations under the Mezzanine B Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine B Lender has delivered (or is simultaneously delivering) such release to Mezzanine B Borrower; (D)
(1) Mezzanine D Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine D Loan Agreement with respect to a release of Mezzanine D Borrower’s obligations
(1) Mezzanine E Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine E Loan Agreement with respect to a release of Mezzanine E Borrower’s obligations under the Mezzanine E Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine E Lender has delivered (or is simultaneously delivering) such release to Mezzanine E Borrower;
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine D Loan and the Mezzanine A E Loan have each been prepaid (or an amount has been delivered to Lender, Mortgage Lender, Mezzanine A Lender, Mezzanine B Lender, Mezzanine D Lender and Mezzanine A E Lender to be applied towards the prepayment of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine D Loan and the Mezzanine A E Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents, the Mortgage Loan Documents, the Mezzanine A Loan Documents, the Mezzanine B Loan Documents, the Mezzanine D Loan Documents and the Mezzanine A E Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine D Borrower, Mezzanine D Principal, Mezzanine E Borrower or Mezzanine A PledgorE Principal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out-Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A)
(1) Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mortgage Loan Agreement with respect to a release of the Out-Parcel to be released pursuant to Section 2.5.2 of the Mortgage Loan Agreement and (2) Mortgage Lender has delivered (or is simultaneously delivering) such release to Mortgage Borrower; (B)
(1) Mezzanine A Borrower has complied with all of the
(1) Mezzanine C Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A C Loan Agreement with respect to a release of Mezzanine A C Borrower’s obligations under the Mezzanine A C Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B2) Mezzanine A C Lender has delivered (or is simultaneously delivering) such release to Mezzanine A C Borrower; (D)
(1) Mezzanine D Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine D Loan Agreement with respect to a release of Mezzanine D Borrower’s obligations under the Mezzanine D Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine D Lender has delivered (or is simultaneously delivering) such release to Mezzanine D Borrower; and (E)
(1) Mezzanine E Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine E Loan Agreement with respect to a release of Mezzanine E Borrower’s obligations under the Mezzanine E Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine E Lender has delivered (or is simultaneously delivering) such release to Mezzanine E Borrower;
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine C Loan, the Mezzanine D Loan and the Mezzanine A E Loan have each been prepaid (or an amount has been delivered to Lender, Mortgage Lender, Mezzanine A Lender, Mezzanine C Lender, Mezzanine D Lender and Mezzanine A E Lender to be applied towards the prepayment of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine C Loan, the Mezzanine D Loan and the Mezzanine A E Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents, the Mortgage Loan Documents, the Mezzanine A Loan Documents, the Mezzanine C Loan Documents, the Mezzanine D Loan Documents and the Mezzanine A E Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine D Borrower, Mezzanine D Principal, Mezzanine E Borrower or Mezzanine A PledgorE Principal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out-Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A) Mezzanine A Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Mortgage Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 of the Mortgage Loan Agreement and (B) Mezzanine A Mortgage Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Mortgage Borrower;.
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Mortgage Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Mortgage Lender to be applied towards the prepayment of the Loan and the Mezzanine A Mortgage Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Mortgage Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Mortgage Borrower, Mezzanine A Mortgage Principal or Mezzanine A PledgorPrincipal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Loan Documents) and the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that (A) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower;
(iii) Intentionally deleted;
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the Debt Service Coverage Ratio as of the Closing Date or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(vii) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(x) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xi) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xii) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xiv) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out-Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Each Out-Parcel Prepayment and Out-Parcel DSCR Satisfaction Prepayment, if any, delivered in connection with the release of an Out-Parcel shall be applied by Lender in accordance with Section 2.3 hereof on the day that Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date). If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a SecuritizationIntentionally deleted.
Appears in 1 contract
Samples: Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A)
(1) Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mortgage Loan Agreement with respect to a release of the Out-Parcel to be released pursuant to Section 2.5.2 of the Mortgage Loan Agreement and (2) Mortgage Lender has delivered (or is simultaneously delivering) such release to Mortgage Borrower; (B)
(1) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B2) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower; (C)
(1) Mezzanine B Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine B Loan Agreement with respect to a release of Mezzanine B Borrower’s obligations under the Mezzanine B Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine B Lender has delivered (or is simultaneously delivering) such release to Mezzanine B Borrower; (D)
(1) Mezzanine C Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine C Loan Agreement with respect to a release of Mezzanine C Borrower’s obligations under the Mezzanine C Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine C Lender has delivered (or is simultaneously delivering) such release to Mezzanine C Borrower; and (E)
(1) Mezzanine E Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine E Loan Agreement with respect to a release of Mezzanine E Borrower’s obligations under the Mezzanine E Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine E Lender has delivered (or is simultaneously delivering) such release to Mezzanine E Borrower;
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting containing the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine C Loan and the Mezzanine A E Loan have each been prepaid (or an amount has been delivered to Lender, Mortgage Lender, Mezzanine A Lender, Mezzanine B Lender, Mezzanine C Lender and Mezzanine A E Lender to be applied towards the prepayment of the Loan, the Mortgage Loan, the Mezzanine A Loan, the Mezzanine B Loan, the Mezzanine C Loan and the Mezzanine A E Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents, the Mortgage Loan Documents, the Mezzanine A Loan Documents, the Mezzanine B Loan Documents, the Mezzanine C Loan Documents and the Mezzanine A E Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(viivi) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mortgage Borrower, Mortgage Principal, Mezzanine A Borrower, Mezzanine A Principal Principal, Mezzanine B Borrower, Mezzanine B Principal, Mezzanine C Borrower, Mezzanine C Principal, Mezzanine E Borrower or Mezzanine A PledgorE Principal) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viiivii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that, immediately after giving effect to the release of Borrower’s obligations under the Loan Documents with respect to the Out-Parcel and release of the Security Instrument as to the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument and for which Borrower’s obligations remain unaffected hereunder (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ixviii) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xix) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage mezzanine loan lender that Mortgage Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory reasonably acceptable to a prudent institutional mortgage loan lenderLender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xix) In the event that Mortgage Borrower has entered into any beneficial REAs pursuant to clause (xix) of this Section 2.5.2(a), Borrower shall have provided Lender with delivered an endorsement to the Owner’s Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xiixi) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiiixii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender in all respects;
(xivxiii) In the event that the Out-Parcel is an Improved Parceloccupied, incoming producing or has Improvements located thereon, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Out- Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) as of the date hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xvxiv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
Release of Out-Parcels. (a) Provided no Event of Default has occurred and is continuing, Borrower may (A) cause Mortgage Borrower to obtain the release of an Out-Parcel from the Lien of the Security Instrument thereon (and related Mortgage Loan Documents) and (B) obtain the release of Borrower’s obligations under the Loan Documents with respect to such Out-Parcel (other than those expressly stated to survive) on any Business Day not falling within a Release Lock-Out Period, but only upon the satisfaction of each of the following conditions:
(i) Borrower shall provide Lender with at least twenty (20) Business Days but no more than ninety (90) days prior written notice of its request to obtain a release of the Out-Parcel. Notwithstanding the foregoing, Borrower shall be permitted the right to rescind and revoke or postpone such notice, provided that Borrower pays all Breakage Costs and all of Lender’s reasonable out-of-pocket costs and expenses incurred as a result of Lender’s receipt of Borrower’s notice of its request to obtain a release of an Out-Parcel and Borrower’s failure to prepay all or any portion of the unpaid principal balance of the Note;
(ii) Borrower shall have delivered evidence that would be reasonably satisfactory to a prudent institutional mortgage mezzanine loan lender that (A)
(1) Mortgage Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mortgage Loan Agreement with respect to a release of the Out-Parcel to be released pursuant to Section 2.5.2 of the Mortgage Loan Agreement and (2) Mortgage Lender has delivered (or is simultaneously delivering) such release to Mortgage Borrower; (B)
(1) Mezzanine A Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine A Loan Agreement with respect to a release of Mezzanine A Borrower’s obligations under the Mezzanine A Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (B2) Mezzanine A Lender has delivered (or is simultaneously delivering) such release to Mezzanine A Borrower; (C)
(1) Mezzanine B Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine B Loan Agreement with respect to a release of Mezzanine B Borrower’s obligations under the Mezzanine B Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine B Lender has delivered (or is simultaneously delivering) such release to Mezzanine B Borrower; (D)
(1) Mezzanine C Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine C Loan Agreement with respect to a release of Mezzanine C Borrower’s obligations under the Mezzanine C Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine C Lender has delivered (or is simultaneously delivering) such release to Mezzanine C Borrower; and (E)
(1) Mezzanine D Borrower has complied with all of the terms and conditions set forth in Section 2.5.2 of the Mezzanine D Loan Agreement with respect to a release of Mezzanine D Borrower’s obligations under the Mezzanine D Loan Documents as to the Out-Parcel to be released pursuant to this Section 2.5.2 and (2) Mezzanine D Lender has delivered (or is simultaneously delivering) such release to Mezzanine D Borrower;
(iii) Intentionally deleted;.
(iv) Lender shall have received a wire transfer of immediately available federal funds in an amount equal to the Out-Parcel Price for the applicable Out-Parcel, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel Prepayment”);
(v) Borrower shall submit to Lender, not less than ten (10) Business Days prior to the date of such release, a release of Lien (and related Loan Documents) for such Out-Parcel for execution by Lender. Such release shall be in a form appropriate in the State in which such Out-Parcel is located 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 is in compliance with all applicable Legal Requirements;
(vi) After giving effect to 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 at least equal to: (A) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid twenty percent (20%) or less of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.52.5 hereof, the Debt Service Coverage Ratio as of the Closing Date August 8, 2007 or (B) if, after giving effect to the proposed release of such Out-Parcel, Borrower shall have prepaid more than twenty percent (20%) of the original maximum principal balance of the Loan in connection with the release of Properties and/or Out-Parcels pursuant to this Section 2.5, the greater of (1) the Debt Service Coverage Ratio as of the Closing Date and (2) the Debt Service Coverage Ratio for all of the then remaining Properties (including the portion thereof constituting the Out-Parcel to be released) ending on the last day of the Monthly Reporting Period preceding the release of the Out-Parcel (the “Out-Parcel DSCR Test”). Notwithstanding the foregoing, the Out-Parcel DSCR Test shall be deemed satisfied provided that the Loan and the Mezzanine A Loan have each been prepaid (or an amount has been delivered to Lender and Mezzanine A Lender to be applied towards the prepayment of the Loan and the Mezzanine A Loan on the next Scheduled Payment Date pursuant to the terms of the Loan Documents and the Mezzanine A Loan Documents) in an aggregate amount equal to the Out-Parcel DSCR Payment, with Lender receiving, in addition to the sums required to be delivered to Lender pursuant to Section 2.5.2(a)(iv) hereof, a portion of the Out-Parcel DSCR Payment equal to the Pro-Rata DSCR Prepayment, together with all other sums due under Section 2.3.1 hereof in connection with such prepayment (collectively, the “Out-Parcel DSCR Satisfaction Prepayment”);
(vii) Lender shall have received evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the Out-Parcel to be released shall be conveyed (A) to a bona fide, independent third party not affiliated with Borrower pursuant to an arms-length transaction or (B) with Lender’s prior written consent (such consent not to be unreasonably withheld), to an affiliate of Borrower (other than Principal, Mezzanine A Borrower, Mezzanine A Principal or Mezzanine A Pledgor) pursuant to a contract that is commercially reasonable, intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties;
(viii) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that, immediately after giving effect to the release of the Out-Parcel, the portion of the Individual Property remaining encumbered by the applicable Security Instrument (the “Remaining Property”) shall (A) comply in all respects with all applicable Legal Requirements, including, without limitation, all applicable zoning and building laws, rules, ordinances and regulations, (B) constitute one or more separate tax lots, and (C) be legally subdivided;
(ix) Borrower shall have provided Lender with evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that, other than the Permitted Encumbrances, there are no liens, mortgages, deeds of trust or other security instruments, as the case may be, encumbering the Remaining Property, which evidence may be in the form of a “bring down” or “date down” or other permitted endorsement to the Title Insurance Policy relating to the Remaining Property issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(x) Borrower shall have delivered evidence that would be reasonably acceptable to a prudent institutional mortgage loan lender that Borrower has entered into all reciprocal easements, cross-easements and mutual or non-exclusive easements (each of which shall be in such form and substance as would be satisfactory to a prudent institutional mortgage loan lender) for ingress, egress, access, pedestrian walkways, parking, traffic flow, drainage, utilities and services shared by the Out-Parcel and the Remaining Property (each an “REA” and, collectively, the “REAs”) which may be required by any Governmental Authority or which may be necessary for the operation of the Remaining Property or which may be required under any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xi) In the event that Borrower has entered into any beneficial REAs pursuant to clause (x) of this Section 2.5.2(a), Borrower shall have provided Lender with an endorsement to the Title Insurance Policy relating to the Remaining Property that insures (x) the Lien of the related Security Instrument on all such REAs and (y) adds all such REAs to the description of the insured estate, which endorsement shall be issued by the title insurance company that issued the Title Insurance Policy relating to the Remaining Property;
(xii) Borrower shall have delivered to Lender evidence that would be reasonably satisfactory to a prudent institutional mortgage loan lender that the release of the Out-Parcel will not violate any term or provision of any Lease in effect at the Remaining Property at the time of the release of the Out-Parcel;
(xiii) Borrower shall have delivered, or caused to be delivered, a survey of the Out-Parcel and the Remaining Property, which survey shall include a metes and bounds description of the Out-Parcel and the Remaining Property and shall otherwise be in such form as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xiv) In the event that the Out-Parcel is an Improved Parcel, Borrower shall have delivered to Lender a fully executed amendment to each Lease, if any, that demises space at both the Out-Parcel and the Remaining Space, which amendment shall provide for the removal of the space demised under such Lease that is located on the Out-Parcel and a reduction of the rent due thereunder (which reduction shall in no event be greater than the income attributed to such space in the Appraisal for such Improved Parcel that was delivered to and approved by Lender pursuant to Section 2.5.2(b) hereof), such amendment shall be in such form and substance as would be reasonably satisfactory to a prudent institutional mortgage loan lender in all respects;
(xv) if the Loan is part of a Securitization, an opinion of counsel acceptable to the Rating Agencies that the release of the Out-Parcel does not constitute a “significant modification” of the Loan under Section 1001 of the Code or otherwise cause a tax to be imposed on a “prohibited transaction” by any REMIC Trust; and
(xvi) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including Rating Agency fees, due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the release of the Out-Parcel 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. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on a Payment Date, Lender shall apply the Out-Parcel Prepayment and the Out-Parcel DSCR Satisfaction Prepayment, if any, in accordance with Section 2.3 hereof on such Payment Date. If Borrower satisfies all of the conditions set forth in this Section 2.5.2(a) on any day other than a Payment Date, Lender shall deposit such funds into the Property Release Fund to be held and applied by Lender in accordance with the terms of Section 7.7 hereof.
(b) Provided no Event of Default shall exist, Borrower shall have the right to designate (i) portions of one or more Individual Properties that are vacant, non-incoming producing and unimproved (each such portion of an Individual Property, an “Unimproved Parcel”) and (ii) portions of one or more Individual Properties that are occupied, incoming producing or that have Improvements located thereon (each such portion of an Individual Property, an “Improved Parcel”) as an Out-Parcel for all purposes hereunder, but only upon the satisfaction of each of the following conditions on or before September 30, 2007:
(i) Lender shall have approved Borrower’s designation of the portion or portions of the applicable Individual Property which shall constitute an Improved Parcel or Unimproved Parcel, as applicable;
(ii) Borrower shall have delivered an Appraisal with respect to each such Improved Parcel and Unimproved Parcel which shows the appraised value of such Improved Parcel or Unimproved Parcel, as applicable, and the appraised value of the Individual Property of which such Improved Parcel or Unimproved Parcel constitutes a portion thereof, which Appraisal shall be satisfactory to Lender in its sole and absolute discretion;
(iii) Borrower shall have delivered a survey and a metes and bounds description with respect to each such Improved Parcel and Unimproved Parcel prepared by a surveyor licensed in the State where such Improved Parcel or Unimproved Parcel, as applicable, is located, which survey shall be satisfactory to Lender in its reasonable discretion; and
(iv) Lender shall have received payment of all its reasonable out-of-pocket costs and expenses, including due diligence review costs and reasonable counsel fees and disbursements incurred in connection with the review and approval of the documents and information required to be delivered by Borrower pursuant to this Section 2.5.2(b). Upon satisfaction of the above conditions with respect to any Improved Parcel or Unimproved Parcel, Borrower and Lender shall enter into an amendment to this Agreement which shall (i) provide that such Improved Parcel or Unimproved Parcel, as applicable, is an Out-Parcel for all purposes hereunder, (ii) specifically identify such Improved Parcel or Unimproved Parcel, as applicable, by attaching as an exhibit hereto the survey and metes and bounds description for such Improved Parcel or Unimproved Parcel, as applicable, that was delivered to and approved by Lender pursuant to Section 2.5.2(b)(iii) hereof, (iii) provide for an Allocated Loan Amount for such Improved Parcel or Unimproved Parcel, as applicable, which Allocated Loan Amount shall be determined by Lender in its reasonable discretion based upon the Appraisal delivered to and approved by Lender pursuant to Section 2.5.2(b)(ii) hereof, (iv) adjust the Allocated Loan Amounts of the Individual Properties and the other Out-Parcels as determined by Lender in its reasonable discretion, and (v) shall provide for such other terms and provisions that Lender deems reasonably necessary to (A) effectuate the addition of such Improved Parcel or Unimproved Parcel as an Out-Parcel hereunder and (B) satisfy the market standards which may be reasonably required in the marketplace or by the Rating Agencies in connection with a Securitization.to
Appears in 1 contract
Samples: Mezzanine Loan Agreement (KBS Real Estate Investment Trust, Inc.)
