Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied: (a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date. (b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property. (c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located. (d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
Appears in 2 contracts
Samples: Loan Agreement (Felcor Lodging Trust Inc), Loan Agreement (Felcor Lodging Trust Inc)
Substitution of Properties. Subject to the terms of this Section 2.6 and after the expiration of the Lockout Period, Borrower agrees that Mortgage Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Mortgage Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Mortgage Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Mortgage Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If Borrower has delivered to Lender evidence satisfactory to Lender that all of the conditions set forth in the Section 2.6 of the Mortgage Loan Agreement have been satisfied, including, without limitation, all documents and information required to be delivered to Mortgage Lender by Mortgage Borrower, in form and substance acceptable to Lender in its reasonable discretion and if any such documents and information is certified to Mortgage Lender, then such documents and information shall also be certified to Lender.
(d) Mortgage Borrower continues to shall own an Individual Property subject to the Lien of a Security Instrument, Substitute Property.
(e) Lender shall have received a certificate of Borrower certifying, together with other evidence satisfactory to Lender that, the Debt Service Coverage Ratio for the twelve (i12) a copy months immediately preceding the substitution with respect to the Substitute Property is at least equal to the Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the date of a deed conveying all the proposed substitution with respect to the Release Property, which Debt Service Coverage Ratio shall be based upon the Allocated Loan Amounts of Borrower's right, title the Substitute Property and interest in and the Release Property.
(f) Unless such event or condition relates solely to the Release Property and will be fully cured by the release and substitution, no Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each other Loan Document on Borrower's part to be observed or performed. Lender shall have received a Person certificate from Borrower confirming the foregoing, stating that the representations and warranties contained in this Agreement and the other than Loan Documents are true and correct in all material respects on and as of the date of the release and substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as Lender, such certificate to be in form and substance satisfactory to Lender.
(g) Borrower or Principal pursuant shall (A) have executed, acknowledged and delivered to an arms length transaction Environmental Indemnity with respect to the Substitute Property from Indemnitor and (iiB) a letter from Borrower countersigned by a title insurance company acknowledging receipt have caused Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Environmental Indemnity shall be the same in form and substance as the Environmental Indemnity executed and delivered with respect to the related Release Property subject to modifications reflecting only the Substitute Property as the Individual Property and such modifications reflecting the laws of such deed and agreeing to record such deed in the real estate records for the county State in which the Release Substitute Property is located. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the "Substitute Allocated Loan Amount") shall equal the Allocated Loan Amount of the related Release Property.
(dh) Mortgage Borrower shall have received and delivered to Lender an Owner's Title Policy (or a marked, signed and redated commitment to issue such Owner's Title Policy) insuring the Substitute Property, issued by the title company that issued the Owner's Title Policy insuring the existing Individual Properties and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Owner's Title Policy insuring the Release Property. The Owner's Title Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the fair market value of the Substitute Property, (2) insure the title on the Substitute Property, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), and (3) contain such endorsements and affirmative coverages as are then available and are contained in the Owner's Policies insuring the existing Individual Properties, and such other endorsements or affirmative coverage that a prudent institutional property owner would require. Lender also shall have received copies of paid receipts or other evidence showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.
(i) Borrower shall deliver or cause to be delivered to Lender (A) updates certified by Mortgage Borrower of all organizational documentation related to Mortgage Borrower and/or the formation, structure, existence, good standing and/or qualification to do business delivered to Lender on the Closing Date; (B) good standing certificates, certificates of qualification to do business in the jurisdiction in which the Substitute Property is located (if required in such jurisdiction); and (C) resolutions of Mortgage Borrower authorizing the substitution and any actions taken in connection with such substitution.
(j) Lender shall have received the following opinions of Borrower's counsel: (A) an opinion of counsel acceptable to stating that the Environmental Indemnity delivered with respect to the Substitute Property pursuant to this Section, among other things, is valid and enforceable in accordance with the terms, subject to the laws applicable to creditors rights and equitable principles and has been duly authorized, executed and delivered by Borrower and that the execution and delivery of such Environmental Indemnity and the performance by Borrower of its obligations thereunder will not cause a breach of, or a default under, any agreement, document or instrument to which Borrower is a party or to which it or its properties are bound; and (C) an update of the Insolvency Opinion indicating that the substitution does not affect the opinions set forth therein.
(k) Borrower shall have caused Mortgage Borrower to pay or reimburse Lender for all reasonable costs and expenses incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with the release and substitution and Borrower shall have caused Mortgage Borrower to pay all recording charges, filing fees, taxes or other expenses (including, without limitation, mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution.
(l) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date Date, and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
(m) Lender shall have received an estoppel and recognition letter from the franchisor under the Franchise Agreement, if any, for the Substitute Property, in form and substance reasonably satisfactory to Lender
(n) Lender shall have received a Replacement Management Agreement for the Substitute Property and the Manager thereunder shall have executed and delivered to Lender a conditional assignment of management agreement with respect to such new Management Agreement on substantially the same terms as used in connection with the Release Property or such other terms as are acceptable Lender;
(o) Lender shall have received a subordination of operating lease for the Substitute Property in form and substance reasonably satisfactory to Lender and
(p) Borrower shall deliver an Officers Certificate certifying that the requirements set forth in this Section 2.6 have been satisfied. All due diligence required to be delivered to Lender in connection with this Section 2.6 shall be in form, scope and substance satisfactory to Lender. Upon the satisfaction of the foregoing conditions precedent, the Substitute Property shall be deemed to be an Individual Property for purposes of this Agreement and the Substitute Allocated Loan Amount with respect to such Substitute Property shall be deemed to be the Allocated Loan Amount with respect to such Substitute Property for all purposes hereunder.
Appears in 1 contract
Samples: Junior Mezzanine Loan Agreement (Felcor Lodging Trust Inc)
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period2.6, Borrower may obtain obtain, from time to time, a release of an Individual Property from the Lien of a the related Security Instrument (and the related Loan Documents) encumbering an Individual Property (each, a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower or an Affiliate of Borrower (provided, however, if the Substitute Property shall be owned by an Affiliate of Borrower said Affiliate (i) shall assume all the obligations of Borrower under this Agreement, the Note and the other Loan Documents and (ii) shall become a party to the Note and the other Loan Documents and shall be bound by the terms and provisions thereof as if it had executed the Note and the other Loan Documents and shall have the rights and obligations of Borrower thereunder) (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(b) Lender shall have received evidence satisfactory to Lender that the Release Property constitutes a separate tax lot from all other Individual Properties remaining subject to the Liens of the Security Instruments.
(c) If the applicable Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, Property each prepared within sixty one hundred eighty (60180) days prior to the release and substitution, substitution showing an that the appraised value of the Substitute Property is equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
(e) Lender shall have received a certificate of Borrower certifying, together with other evidence that would be satisfactory to a prudent institutional mortgage loan lender that, after the substitution of a Substitute Property and the release of the Release Property, the Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the date of the substitution with respect to all Properties remaining subject to the Lien of the Security Instruments after the substitution shall be at least equal to the greater of (A) 1.60:1.00 and (B) Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the substitution (including the Release Property and excluding the Substitute Property).
(f) If the Loan is part of a Securitization, Lender shall have received confirmation in writing from the Rating Agencies to the effect that such release and substitution will not result in a withdrawal, qualification or downgrade of the respective ratings in effect immediately prior to such release and substitution for the Securities issued in connection with the Securitization that are then outstanding. If the Loan is not part of a Securitization, Lender shall have consented in writing to such release and substitution, which consent shall be given in Lender's reasonable discretion applying the requirements of a prudent institutional mortgage loan lender with respect to real estate collateral of similar size, scope and value of the Substitute Property.
(g) No Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each other Loan Document on Borrower's part to be observed or performed. Lender shall have received a certificate from Borrower confirming the foregoing, stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects On and as of the date of the release and substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as (i) Lender, if a Securitization has not occurred, or (ii) the Rating Agencies, if a Securitization has occurred, may require, unless such certificate would be inaccurate, such certificate to be in form and substance satisfactory to Lender or the Rating Agencies, as applicable.
(h) Borrower shall (A) have executed, acknowledged and delivered to Lender (I) a Security Instrument, an Assignment of Leases and Rents and two UCC-1 Financing Statements with respect to the Substitute Property, together with a letter from Borrower countersigned by a title insurance company acknowledging receipt of such Security Instrument, Assignment of Leases and Rents and UCC-1 Financing Statements and agreeing to record or file, as applicable, such Security Instrument, Assignment of Leases and Rents and one of the UCC-1 Financing Statements in the real estate records for the county in which the Substitute Property is located and to file one of the UCC-1 Financing Statements in the office of the Secretary of State (or other central filing office) of the State in which the Substitute Property is located, so as to effectively create upon such recording and filing valid and enforceable first priority Liens upon the Substitute Property, in favor of Lender (or such other trustee as may be desired under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents and (II) an Environmental Indemnity with respect to the Substitute Properly from Guarantor and (B) have caused Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Security Instrument, Assignment of Leases and Rents, UCC-1 Financing Statements and Environmental Indemnity shall be the same in form and substance as the counterparts of such documents executed and delivered with respect to the related Release Property subject to modifications reflecting only the Substitute Property as the Individual Property and such modifications reflecting the laws of the State in which the Substitute Property is located. The Security Instrument encumbering the Substitute Property shall secure all amounts then outstanding under the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording, intangibles or similar tax and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount secured by such Security Instrument shall be equal to one hundred twenty-five percent (125%) of the Allocated Loan Amount for the Substitute Property. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the "Substitute Allocated Loan Amount") shall equal the Allocated Loan Amount of the related Release Property.
(i) Lender shall have received (A) to the extent available, any "tie-in" or similar endorsement, together with a "first loss" endorsement, to each Title Insurance Policy insuring the Lien of the existing Security Instruments as of the date of the substitution with respect to the Title Insurance Policy insuring the Lien of the Security Instrument with respect to the Substitute Property and (B) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Security Instrument encumbering the Substitute Property, issued by the title company that issued the Title Insurance Policies insuring the Lien of the existing Security Instruments and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Security Instrument encumbering the Release Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Allocated Loan Amount if the "tie-in" or similar endorsement described above is available or, if such endorsement is not available, in an amount equal to one hundred twenty-five percent (125%) of the Substitute Allocated Loan Amount, together with "last dollar endorsement," (2) insure Lender that the relevant Security Instrument creates a valid first lien on the Substitute Property encumbered thereby, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are then available and are contained in the Title Insurance Policies insuring the Liens of the existing Security Instruments, and such other endorsements or affirmative coverage that a prudent institutional mortgage lender would require, and (4) name Lender as the insured. Lender also shall have received copies of paid receipts or other evidence showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.
(j) Lender shall have received a current Survey for each Substitute Property, certified to the title company and Lender and its successors and assigns, in the same form and having the same content as the certification of the Survey of the Release Property prepared by a professional land surveyor licensed in the State in which the Substitute Property is located and acceptable to the Rating Agencies in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys. Such Survey shall reflect the same legal description contained in the Title Insurance Policy relating to such Substitute Property and shall include, among other things, a metes and bounds description of the real property comprising part of such Substitute Property (unless such real property has been satisfactorily designated by lot number on a recorded plat). The surveyor's seal shall be affixed to each Survey and each Survey shall certify whether or not the surveyed property is located in a "one-hundred-year flood hazard area."
(k) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for an Individual Property hereunder have been satisfied with respect to the Substitute Property and evidence of the payment of all Insurance Premiums payable for the existing policy period.
(1) Lender shall have received a Phase I environmental report dated not more than one hundred eighty (180) days prior to the proposed date of substitution and otherwise acceptable to a prudent institutional mortgage loan lender and, if recommended under the Phase I environmental report, a Phase II environmental report that would be acceptable to a prudent institutional mortgage loan lender, which conclude that the Substitute Property does not contain any Hazardous Materials and is not subject to any significant risk of contamination from any off site Hazardous Materials.
Appears in 1 contract
Substitution of Properties. Subject to the terms of this Section 2.6 and after the expiration of the Lockout Period, Borrower may cause Mortgage Borrower to obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Mortgage Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Mortgage Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Mortgage Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If Borrower has delivered to Lender evidence satisfactory to Lender that all of the conditions set forth in the Section 2.6 of the Mortgage Loan Agreement have been satisfied, including, without limitation, all documents and information required to be delivered to Mortgage Lender by Mortgage Borrower, in form and substance acceptable to Lender in its reasonable discretion and if any such documents and information is certified to Mortgage Lender, then such documents and information shall also be certified to Lender.
(d) Mortgage Borrower continues to shall own an Individual Property subject to the Lien of a Security Instrument, Substitute Property.
(e) Lender shall have received a certificate of Borrower certifying, together with other evidence satisfactory to Lender that, the Debt Service Coverage Ratio for the twelve (i12) a copy months immediately preceding the substitution with respect to the Substitute Property is at least equal to the Debt Service Coverage Ratio for the twelve (12) full calendar months immediately preceding the date of a deed conveying all the proposed substitution with respect to the Release Property, which Debt Service Coverage Ratio shall be based upon the Allocated Loan Amounts of Borrower's right, title the Substitute Property and interest in and the Release Property.
(f) Unless such event or condition relates solely to the Release Property and will be fully cured by the release and substitution, no Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each other Loan Document on Borrower's part to be observed or performed. Lender shall have received a Person certificate from Borrower confirming the foregoing, stating that the representations and warranties contained in this Agreement and the other than Loan Documents are true and correct in all material respects on and as of the date of the release and substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as Lender, such certificate to be in form and substance satisfactory to Lender.
(g) Borrower or Principal pursuant shall (A) have executed, acknowledged and delivered to an arms length transaction Environmental Indemnity with respect to the Substitute Property from Indemnitor and (iiB) a letter from Borrower countersigned by a title insurance company acknowledging receipt have caused Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Environmental Indemnity shall be the same in form and substance as the Environmental Indemnity executed and delivered with respect to the related Release Property subject to modifications reflecting only the Substitute Property as the Individual Property and such modifications reflecting the laws of such deed and agreeing to record such deed in the real estate records for the county State in which the Release Substitute Property is located. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the "Substitute Allocated Loan Amount") shall equal the Allocated Loan Amount of the related Release Property.
(dh) Mortgage Borrower shall have received and delivered to Lender an Owner's Title Policy (or a marked, signed and redated commitment to issue such Owner's Title Policy) insuring the Substitute Property, issued by the title company that issued the Owner's Title Policy insuring the existing Individual Properties and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Owner's Title Policy insuring the Release Property. The Owner's Title Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the fair market value of the Substitute Property, (2) insure the title on the Substitute Property, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), and (3) contain such endorsements and affirmative coverages as are then available and are contained in the Owner's Policies insuring the existing Individual Properties, and such other endorsements or affirmative coverage that a prudent institutional property owner would require. Lender also shall have received copies of paid receipts or other evidence showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.
(i) Borrower shall deliver or cause to be delivered to Lender (A) updates certified by Mortgage Borrower of all organizational documentation related to Mortgage Borrower and/or the formation, structure, existence, good standing and/or qualification to do business delivered to Lender on the Closing Date; (B) good standing certificates, certificates of qualification to do business in the jurisdiction in which the Substitute Property is located (if required in such jurisdiction); and (C) resolutions of Mortgage Borrower authorizing the substitution and any actions taken in connection with such substitution.
(j) Lender shall have received the following opinions of Borrower's counsel: (A) an opinion of counsel acceptable to stating that the Environmental Indemnity delivered with respect to the Substitute Property pursuant to this Section, among other things, is valid and enforceable in accordance with the terms, subject to the laws applicable to creditors rights and equitable principles and has been duly authorized, executed and delivered by Borrower and that the execution and delivery of such Environmental Indemnity and the performance by Borrower of its obligations thereunder will not cause a breach of, or a default under, any agreement, document or instrument to which Borrower is a party or to which it or its properties are bound; and (C) an update of the Insolvency Opinion indicating that the substitution does not affect the opinions set forth therein.
(k) Borrower shall have caused Mortgage Borrower to pay or reimburse Lender for all reasonable costs and expenses incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with the release and substitution and Borrower shall have caused Mortgage Borrower to pay all recording charges, filing fees, taxes or other expenses (including, without limitation, mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution.
(l) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date Date, and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
(m) Lender shall have received an estoppel and recognition letter from the franchisor under the Franchise Agreement, if any, for the Substitute Property, in form and substance reasonably satisfactory to Lender
(n) Lender shall have received a Replacement Management Agreement for the Substitute Property and the Manager thereunder shall have executed and delivered to Lender a conditional assignment of management agreement with respect to such new Management Agreement on substantially the same terms as used in connection with the Release Property or such other terms as are acceptable Lender; and
(o) Borrower shall deliver an Officers Certificate certifying that the requirements set forth in this Section 2.6 have been satisfied. All due diligence required to be delivered to Lender in connection with this Section 2.6 shall be in form, scope and substance satisfactory to Lender. Upon the satisfaction of the foregoing conditions precedent, the Substitute Property shall be deemed to be an Individual Property for purposes of this Agreement and the Substitute Allocated Loan Amount with respect to such Substitute Property shall be deemed to be the Allocated Loan Amount with respect to such Substitute Property for all purposes hereunder.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Felcor Lodging Trust Inc)
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout PeriodSection, Borrower may obtain a release of the Lien lien of a Security Instrument (and the Property-related Loan DocumentsDocuments from up to three (3) encumbering parcels constituting the Property (the "RELEASE PROPERTY"), which constitute in the aggregate, not more than thirty percent (30%) of the total cash flow of the Property, by substituting therefor an Individual Property office and/or industrial property of like quality to be owned by a subsidiary of the Guarantor (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute PropertiesSUBSTITUTE PROPERTY"), provided that the following conditions precedent are satisfied:.
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty sixty (3060) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(cb) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal any principal or affiliate of Borrower pursuant to an arms length transaction transaction, and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county or town (as applicable) in which the Release Property is locatedlocated simultaneously with the substitution.
(dc) Lender shall have received a current Appraisal M.A.I. appraisal of (i) the Release Property, the Substitute Property and the Remaining Property (iihereinafter defined) in form and substance meeting the Release Property, each standards of prudent institutional lenders prepared within sixty six (606) days months prior to the release and substitution, substitution (i) showing as to the Substitute Property an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date original closing date of the Loan, and (ii) which supports a post-substitution, aggregate loan-to-value ratio, for all properties that will secure the Loan after the substitution, that does not exceed the lesser of (A) the aggregate loan-to-value ratio for the properties securing the Loan as of the original closing date of the Loan or (B) the appraised aggregate loan-to-value ratio of the Release Property such properties immediately prior to the date of the proposed substitution.. Ply Gem Industries -74-
Appears in 1 contract
Samples: Loan Agreement (Corporate Property Associates 16 Global Inc)
Substitution of Properties. (a) Subject to the terms of and conditions set forth in Section 2.4.2 and this Section 2.6 after the expiration of the Lockout Period2.4.4, Borrower may obtain a release of the Lender's Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") against one or more individual Properties by substituting therefor another hotel property of like kind and quality acquired by Borrower other property(ies) (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that such substitution of Properties shall not be allowed more than once per year during the Term. Any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfiedprecedent:
(ai) Lender shall have received any due diligence materials reasonably requested by Lender with respect to the Substitute Property(ies) and the same are satisfactory to Lender in all respects.
(ii) The Substitute Property(ies) are satisfactory to Lender in all respects in Lender's sole discretion (after Lender's due diligence investigation).
(iii) After giving effect to the substitution, the overall Debt Service Coverage Ratio for the Loan is not less than the overall Debt Service Coverage Ratio for the Loan as of the date hereof and as of the date immediately preceding the substitution.
(iv) Lender shall have received evidence in writing from the applicable Rating Agencies to the effect that such substitution will not result in a qualification, withdrawal or downgrading of the ratings in effect immediately prior to such substitution for the Securities issued in connection with the Securitization which are then outstanding.
(v) If required by the applicable Rating Agencies, Borrower shall also deliver or cause to be delivered a non-consolidation opinion with respect to the Borrower in form and substance satisfactory to Lender and the applicable Rating Agencies.
(vi) No Event of Default shall exist.
(vii) Lender shall have received from Borrower fully executed and acknowledged counterparts of Mortgages, the Assignment of Leases and the Assignments of Agreements relating to each of the Substitute Properties and evidence that counterparts of the Mortgages and Assignment of Leases have been delivered to the title company for recording, in the reasonable judgment of Lender, so as to effectively create upon such recording valid and enforceable Liens upon such Substitute Properties, of the requisite priority, in favor of Lender (or such other trustee as may be required or desired under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents.
(viii) Lender shall have received with respect to each Substitute Property (A) a Title Insurance Policy and evidence that all premiums in respect of such Title Insurance Policy has been paid, (B) an "ALTA Survey" satisfactory to Lender, (C) valid certificates of insurance for the policies of insurance required hereunder and evidence of the payment of all premiums payable for the existing policy period which period shall not be less than one month in advance, (D) an environmental report reasonably satisfactory to Lender indicating that there are no hazardous materials present at the Substitute Property and no environmental condition affecting the Substitute Property requiring remediation, (E) an engineering report reasonably satisfactory to Lender, (F) an appraisal reasonably satisfactory to Lender, and (G) one of the following, in form and substance reasonably satisfactory to Lender: (i) letters or other evidence from the appropriate municipal authorities (or other Persons) concerning applicable zoning and building laws, (ii) an ALTA 3.1 zoning endorsement for the applicable Title Insurance Policy, or (iii) a zoning opinion letter.
(ix) Borrower shall deliver an opinion of counsel for Borrower in form and substance satisfactory to Lender and the applicable Rating Agencies stating, among other things, that the substitution does not have violate the right rules applicable to release and substitute a REMIC.
(ix) more than one (1) Individual Property Borrower shall deliver an Officer's Certificate certifying that the requirements set forth in accordance with this Section 2.4.4 and Section 2.4.2 have been satisfied.
(xi) Borrower shall deliver such other certificates, documents or instruments as Lender may reasonably request.
(xii) Borrower shall pay all reasonable costs and expenses of Lender incurred in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in connection with the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Datesubstitution.
(b) Lender Notwithstanding anything to the contrary contained in this Section 2.4.4, upon the substantial completion of the proposed expansion of the Property located in Smithfield, North Carolina, subject to the satisfaction of the conditions contained above, Borrower may obtain a release of Lender's Lien against any two of the Special Release Properties, and the completed expansion of the Property located in Smithfield, North Carolina shall have received at least thirty (30) days prior written notice requesting the substitution and identifying be deemed the Substitute Property and Release Propertyfor such released Property(ies) for all purposes contained herein.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
Appears in 1 contract
Substitution of Properties. (a) Subject to the terms of and conditions set forth in this Section 2.6 after 2.10, Borrowers may obtain, on any Business Day, (i) the expiration of the Lockout Period, Borrower may obtain a release of a Property (the “Released Property”) from the Lien of a the Security Instrument thereon (and the related Loan Documents) encumbering an Individual and (ii) the release of Borrowers’ obligations under the Loan Documents with respect to such Released Property (other than those obligations expressly stated to survive), by simultaneously substituting another property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "“Substitute Property" and collectively”) for the Released Property. Any such substitution (a “Substitution”) shall be subject, in each case, to the "Substitute Properties"), provided that satisfaction of the following conditions precedent are satisfiedprecedent:
(ab) Borrowers shall request such Substitution by written notice to Lender given at least 30 days (or 45 days if more than three Properties are sought to be released prior to the date on which the Substitution is to occur (the “Substitution Date”);
(c) Borrowers shall have provided to Lender all industry standard property due diligence material similar to the due diligence material provided to Lender in connection with the origination of the Loan (e.g., title, survey, leases, engineering report, environmental report) with respect to each Substitute Property at least 20 days (or 30 days if more than three Properties are sought to be released) before the Substitution Date, which due diligence materials would be reasonably satisfactory to a prudent lender for loans with similar financing arrangements as contained herein;
(d) if the Loan has been the subject of a Securitization, Borrower shall not deliver to Lender a Rating Agency Confirmation as to the Substitution if required pursuant to any pooling and servicing agreement entered into in connection with such Securitization;
(e) Borrowers shall have delivered to Lender an Acceptable Appraisal of each proposed Substitute Property indicating an Appraised Value of the right Substitute Property (as reflected in such Acceptable Appraisal) that is equal to release or greater than the greater of the Appraised Value of the Released Property;
(f) after giving effect to the Substitution, the Actual Debt Service Coverage Ratio for all of the Properties (including the Substitute Properties, but excluding the Released Properties) shall be no less than the greater of (A) the Actual Debt Service Coverage Ratio for all of the Properties (including the Released Properties, but excluding the Substitute Properties ) immediately preceding such Substitution and substitute (iB) more than one 2.00:1;
(1g) Individual Property in accordance with this Section in any Intentionally Omitted;
(h) no Substitution shall occur during the twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in preceding the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Maturity Date.;
(bi) Lender shall have received at least thirty (30x) days prior written notice requesting tenant estoppel letters in substantially the substitution same form as those delivered from existing tenants in connection with the closing of the Loan, and identifying showing no landlord or tenant defaults, for leases comprising not less than 85% of the gross rentable area of each Substitute Property Property, and Release Property.(y), if requested by Lender, subordination, non-disturbance and attornment agreements, substantially in Lender’s standard form (or such other form required by any applicable lease provided the same would be satisfactory to a prudent lender for loans with similar financing arrangements as those contained herein);
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(dj) Lender shall have received an opinion of counsel for Borrower stating that any securitization vehicle formed in connection with a current Appraisal securitization which includes the Loan which has elected to be treated as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Internal Revenue Code, as amended, will not fail to maintain such status as a result of such Substitution and that the Substitution does not constitute a “significant modification” of the Loan under Section 1001 of the Internal Revenue Code, as amended, or otherwise cause a tax to be imposed on a “prohibited transaction” by any securitization vehicle electing to be treated as a REMIC Trust;
(ik) no Event of Default shall have occurred and be continuing at the time that the Substitution request is made or on the Substitution Date, other than an Event of Default which would be cured by the release of the Property or Properties sought to be released;
(l) Borrowers and Guarantor shall execute and deliver such other consents, certificates, documents, agreements or instruments as Lender may reasonably request (including, without limitation, a mortgage, deed of trust or deed to secure debt granted by Borrower to Lender with respect to the Substitute Property and any modifications to this Agreement or the other Loan Documents necessitated by the substitution), and Borrower shall deliver opinions of counsel relating to such documents, which be substantially similar to the opinions of counsel delivered on the Closing Date;
(m) Borrower shall deliver an Officer’s Certificate (i) certifying that all information delivered to Lender by or on behalf of Borrower in connection with the Substitution is true, accurate and complete in all material respects and (ii) making all the Release Property, each prepared within sixty (60) days prior representations and warranties set forth herein with respect to the release and substitution, showing an appraised value of Properties as to the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date Substitution Date; and
(n) Borrowers shall have paid all reasonable, actual out-of-pocket fees charged by the Servicer, a reasonable processing fee charged by Servicer and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitutionall reasonable costs and expenses incurred by Lender in connection with such Substitution, including reasonable attorneys’ fees and expenses.
Appears in 1 contract
Substitution of Properties. Subject During the Term of the Loan, Borrowers may notify Agent in writing that Borrowers desire to pledge one or more new properties as Collateral for the terms Loan in substitution for one or more of the Properties. So long as no Event of Default shall be continuing (unless such Event of Default shall be cured by the substitution of Properties as permitted by this Section 2.6 after the expiration of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"2.2), Agent shall approve such request provided that the following conditions precedent are satisfied:
satisfied in Agent's reasonable discretion: (a) Borrower Agent shall not have determined that each Property to be replaced has a negative Adjusted Net Operating Income for at least the right most recent two (2) consecutive calendar quarters, (b) Agent shall have approved each new property proposed to release be pledged, (c) Borrowers shall have executed and substitute delivered such documents as Agent shall require in order to evidence that such new property has been added as Collateral for the Loan, including, without limitation, a Mortgage with respect to each new property, an amendment to the Loan Documents executed by all Borrowers and Guarantor confirming that each new property has been added as a Property, and opinions of counsel to Borrowers and Guarantor in forms reasonably satisfactory to Agent, (id) more than one Borrowers shall have delivered to Agent a Title Policy, Survey, appraisal, environmental report and any other documents or reports requested by Agent with respect to each new property, (1e) Individual Property Borrowers shall have paid all reasonable Costs (defined in accordance Section 9.1 below) incurred by Agent and/or Lenders in connection with this Section in any twelve (12) month period such substitution, and (iif) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five net rental payments due under the Leases with respect to the new properties (or if applicable, the aggregate debt service due under the Omega Loan Documents with respect to such new properties) are, in Agent's reasonable determination, at least eighty percent (3580%) of the aggregate appraised values net rental payments due under the Leases (or if applicable, the aggregate debt service due under the Omega Loan Documents) with respect to the Properties to be replaced. In no event shall Borrowers have the right to substitute more than ten (10) Properties in the aggregate during the Term of the Loan, including pursuant to clause (Z) in the last grammatical paragraph of Section 7.1 below; provided, that the foregoing shall not otherwise limit the number of Properties subject that can be added as Collateral pursuant to Section 2.3 below or clause (Y) in the Lien last grammatical paragraph of Section 7.1 below. Following any substitution of Properties pursuant to this Section 2.2, Agent shall provide written notice thereof to each of the Security Instruments as of the Closing DateLenders.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.
Appears in 1 contract
Substitution of Properties. Subject to the terms of and conditions set forth in this Section 2.6 after Section, at any time following the expiration commencement of the Lockout Defeasance Period, Borrower may obtain a release of the Lien of a Security Instrument the Mortgage (and the related Loan Documents) encumbering an Individual Property to the extent it encumbers one or more Mortgaged Properties (a "Release PropertySUBSTITUTED PROPERTY") by substituting therefor another hotel property of like kind and quality one or more office properties acquired by Borrower (individually, a "Substitute PropertySUBSTITUTE PROPERTY" and collectively, the "Substitute PropertiesSUBSTITUTE PROPERTIES"), provided that (a) the Substitution Conditions are satisfied with respect to the Substitute Properties, (b) no such substitution may occur after the Anticipated Repayment Date, (c) such substitution shall not be allowed more than two (2) times during the term of the Loan and (d) not more than five (5) Mortgaged Properties may be released from the Lien of the Mortgage (and the related Loan Documents) during the term of the Loan pursuant to this SECTION 11. Any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfied:(collectively, the "SUBSTITUTION CONDITIONS"):
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Substituted Property or Substituted Properties then being Released to a Person an entity other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company the Title Company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Release Substituted Property is located or in the counties in which the Substituted Properties are located.;
(dii) Lender shall have received a current Appraisal an appraisal of (i) the Substitute Property and (ii) the Release Propertyor Substitute Properties, each prepared within as applicable, dated no more than sixty (60) days prior to the release and substitutionsubstitution by an appraiser acceptable to the Rating Agencies, showing indicating an appraised value of the Substitute Property or Substitute Properties, as applicable, that is equal to or greater than one hundred percent (100%) of (A) the appraised value Release Price of the Release Substituted Property or Substituted Properties, then being Released, determined by Lender as of the Closing Date Date;
(iii) after giving effect to the substitution, the Debt Service Coverage Ratio for the Mortgaged Properties (including the Substitute Properties but excluding the Substituted Properties) shall be at least equal to the greater of (i) 2.22:1 (on or before April 16, 2003) or 1.81:1 (on or after April 17, 2003), and (Bii) the appraised value Debt Service Coverage Ratio for the Loan for all of the Release Mortgaged Properties immediately preceding the substitution;
(iv) the Net Operating Income for any Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the proposed substitution.Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available (which period of time, in any event, shall not be less than one (1) year);
Appears in 1 contract
Samples: Loan Agreement (Arden Realty Inc)
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Borrower shall not have So long as no Default or Event of Default has occurred and is continuing hereunder, in the right to release and substitute event (i) more than one Lessee or Guarantor or any Affiliate thereof is required by applicable bank regulatory requirements to divest its interest in any Leased Property or (1ii) Individual Lessee desires to cause a Leased Property to be sold to a Person that is not an Affiliate of any party to any Operative Document, Lessee may give Lessor and the Indenture Trustee an irrevocable written notice (the Substitution Notice) of Lessee's intention to ------------------- substitute a new property located in the United States (an Exchange Property) ----------------- for such Leased Property pursuant to this Article 38(a). Such notice shall (A) refer specifically to this Article 38(a) and the corresponding section of the Indenture, (B) state that Lessee proposes to substitute such Leased Property in accordance with the provisions of this Section in any twelve Article 38, (12C) month period include, if a substitution shall occur under the circumstances described under clause (a)(i) hereof, the order or regulation applicable to Lessee, Guarantor or such Affiliate, (D) include, if a proposed substitution shall occur under the circumstances described under clause (a)(ii) hereof, an irrevocable commitment to purchase such Leased Property from such Person which purchase shall be conditioned upon the satisfaction of, among other things, the conditions set forth herein, and (iiE) any Properties after specify the date for such time as Borrower has released and substituted Properties substitution (which in shall be the aggregate had an appraised value of Installment Payment Date no less than 14 nor more than thirty-five percent (35%) 45 days after the date of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Datesuch Substitution Notice).
(b) Lender Each proposed Exchange Property shall be approved by the Indenture Trustee (acting on instructions from all of the Registered Owners), which approval shall not be unreasonably withheld, conditioned or delayed. The following additional conditions shall be satisfied prior to any substitution of properties pursuant to this Article 38:
(i) Lessor, Indenture Trustee and LC Issuer shall have received an Appraisal and a "Phase I" Environmental Report of the Exchange Property made by an Appraiser and environmental engineer, respectively, selected by Indenture Trustee, subject to the approval of Lessor and LC Issuer, which approval shall not be unreasonably withheld, which Appraisal and Environmental Report shall have been made at the expense of Lessee. Such Appraisal shall be delivered at least thirty (30) 30 days prior written notice requesting to the date of such proposed substitution and shall indicate the fair market value and useful life of the Exchange Property at the time of the proposed substitution and prospectively for the end of each remaining year of the Maximum Lease Term (assuming in each case that the affected Leased Property had been maintained and operated in accordance with the terms of this Lease). Fair market value shall be determined by the same methodology as was employed by the appraiser in the original appraisal of the replaced Leased Property delivered in connection with the commencement of the Lease with respect to such Leased Property. Such Environmental Report shall be delivered at least 30 days prior to the date of such proposed substitution, shall speak as of a date not more than six months prior to the date of such proposed substitution and shall not disclose any conditions which are not satisfactory to Lessor, Indenture Trustee or LC Issuer. Lessee shall certify to the best of its knowledge that as of the substitution date there has been no adverse change in the environmental status of the Exchange Property from that described in the Environmental Report with regard to environmental matters. If such Environmental Report recommends further review, Lessee, at its own expense, will provide such additional environmental assessments as are required by Lessor, Indenture Trustee or LC Issuer. The results of such Environmental Reports shall be satisfactory to Lessor, Indenture Trustee and identifying LC Issuer. Lessor, Indenture Trustee, LC Issuer and each holder of indebtedness secured by the Substitute Indenture shall receive a letter from the environmental engineer submitting such Environmental Report, permitting such addressee to rely on such Environmental Reports.
(ii) Lessor, Indenture Trustee and LC Issuer shall have received a Lease Supplement in the form of Schedule H annexed hereto and, if appropriate, a memorandum or short form of lease with respect thereto, duly authorized, executed and delivered by Lessee, as lessee, adding and subjecting the Exchange Property to, and releasing the affected Leased Property from, the terms of this Lease, and containing such other terms as Lessor, Indenture Trustee or LC Issuer or their respective counsel may reasonably deem necessary or appropriate by reason of the transactions contemplated by this Article 38.
(iii) Lessee shall have caused to be executed and delivered to Lessor, Indenture Trustee and LC Issuer (w) a special warranty deed, sufficient to convey to Lessor good and marketable title to the Exchange Property subject only to the Permitted Encumbrances described in clauses (a), (b), (c), and (h) of the definition thereof (to the extent such Permitted Encumbrances are acceptable to Lessor, Indenture Trustee and LC Issuer), (x) a supplement to or amendment of the Assignment of Lease, including the legal description of the Exchange Property, (y) a supplement to or amendment of the Indenture with respect to such Exchange Property, and (z) a supplement to or amendment of the LC Deed of Trust with respect to such Exchange Property, in each case in form sufficient for recording and enforceability in the applicable jurisdiction, so that upon the proper recordation and effectiveness of the foregoing, such parties shall enjoy the same rights and benefits with respect to the Exchange Property as existed with respect to such substituted Leased Property. Lessor, Indenture Trustee and LC Issuer shall have received (a) an owner's and a mortgagee's policy of title insurance, as applicable, on the standard ALTA form formerly known as 1970 form (or if the 1970 form is not available in a particular jurisdiction, a more recent form which has been endorsed or had exclusions removed to achieve the equivalent) with respect to the Exchange Property (or a commitment therefor) with mechanics' lien coverage and containing no survey exception, insuring Lessor, Indenture Trustee and LC Issuer, respectively, against loss with respect to the Exchange Property and Release otherwise reasonably satisfactory to Lessor, Indenture Trustee and LC Issuer and (b) a survey of the Exchange Property, satisfactory in form and substance to Lessor, Indenture Trustee and LC Issuer, certified within 90 days prior to the date of substitution, by a surveyor licensed in the state in which the Exchange Property is located.
(iv) Lessor, Indenture Trustee and LC Issuer shall have had the opportunity to conduct customary due diligence with regard to the Exchange Property and shall have received evidence satisfactory to each such Person that the Exchange Property complies with all zoning and other land use requirements and that all necessary permits and licenses have been issued with respect thereto.
(v) All necessary approvals, authorizations and consents of all governmental bodies (including courts) having jurisdiction with respect to the transactions contemplated by this Article 38 shall have been obtained and all taxes (which, if permitted by law, may be paid in installments), fees and other charges payable in connection therewith shall have been paid.
(vi) Xxxxxx, XX Issuer and Indenture Trustee shall have received such other instruments and such certificates, including without limitation, an estoppel certificate from Lessee, evidence of the insurance required by this Lease, certificates as to representations and warranties, and opinions of counsel, each in form and substance reasonably satisfactory to Xxxxxx, XX Issuer and Indenture Trustee in connection with the transactions contemplated by this Article 38 as Xxxxxx, XX Issuer or Indenture Trustee may reasonably request. Where required, such instruments shall have been duly recorded by Lessee. Lessee shall pay all fees and expenses incurred in connection with the transaction contemplated by this Article 38, by any Person including, without limitation, Xxxxxx, XX Issuer, Indenture Trustee, the Registered Owners, Beneficiary, including reasonable attorneys' fees and disbursements of such Persons.
(c) If the Borrower continues Appraisal provided to own an Individual Property subject Lessor, Indenture Trustee and LC Issuer pursuant to the Lien of a Security Instrument, Lender shall have received paragraph (b) (i) a copy of a deed conveying all this Article 38 shall show that the fair market value of Borrower's rightthe Exchange Property is less than the fair market value of the Leased Property for which such Exchange Property is to be substituted, title and interest in and then Lessee shall be required to pay to Lessor, as an adjustment to Basic Rent hereunder, the amount of such difference, plus an amount equal to the Release Property Reinvestment Premium calculated with respect to a Person other than Borrower or Principal pursuant to an arms length transaction such difference (the Substitution Adjustment) and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed the ----------------------- Lease shall be modified as set forth in the real estate records for the county in which the Release Property is locatedArticle 16(c).
(d) Lender If all of the conditions set forth in this Article 38 have been satisfied, then, upon payment of the Substitution Adjustment, if applicable, and the conveyance of the Exchange Property to Lessor in accordance with the terms hereof, Lessor shall have received a current Appraisal convey the affected Leased Property to Lessee in accordance with the provisions of (i) Article 16 and the Substitute Lease shall terminate as to such affected Leased Property and (ii) the Release shall be effective as to such Exchange Property, each prepared within sixty (60) days prior . If Lessee fails to the release and substitution, showing an appraised value of the Substitute Property equal to complete such substitution on or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to before the date set forth in the Substitution Notice, or such later date as Lessor, Lessee, Indenture Trustee and LC Issuer shall mutually agree, such failure shall immediately constitute an Event of the proposed substitutionDefault hereunder.
Appears in 1 contract
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period2.9, Borrower may obtain cause Mortgage Borrower to obtain, from time to time, a release of the Lien of one or more Individual Properties (each, a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "“Release Property"”) by substituting therefor another hotel property one or more luxury residential apartment building properties of like kind and quality located in the United States of America acquired by Mortgage Borrower or an Affiliate of Mortgage Borrower (provided, however, that if the Substitute Property shall be owned by an Affiliate of Mortgage Borrower, such Affiliate (i) shall be wholly owned, directly or indirectly, by a Borrower Entity, (ii) shall assume all the obligations of Mortgage Borrower under the Security Instrument, the Mortgage Note and the other Mortgage Loan Documents (subject, however, to the exculpatory provisions of Section 9.4 hereof) and (iii) shall become a party to the Mortgage Note and the other Mortgage Loan Documents and shall be bound by the terms and provisions thereof as if it had executed the Mortgage Note and the other Mortgage Loan Documents and shall have the rights and obligations of Mortgage Borrower thereunder) (individually, a "“Substitute Property" ” and collectively, the "“Substitute Properties"”), provided that the following conditions precedent are satisfiedsatisfied or, in Lender’s sole discretion, waived:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days days’ prior written notice requesting the substitution and identifying the Substitute Property and the Release Property.
(i) All conditions to the release of such Individual Property and substitution of such Substitute Property shall have been satisfied in accordance with the terms of the Mortgage Loan Documents (as independently determined by Lender in its reasonable discretion) and (ii) all conditions to the release of such Individual Property and substitution of such Substitute Property shall have been satisfied in accordance with the terms of Section 2.9 of the Mezzanine A Loan Agreement with respect to such release and substitution.
(c) If the Mortgage Borrower continues Entity that owns the Release Property will continue to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's such Mortgage Borrower Entity’s right, title and interest in and to the Release Property to a Person other than Mortgage Borrower or Mortgage Principal pursuant to an arms length transaction and (ii) a letter from Mortgage Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and prepared not earlier than one (ii1) the Release Property, each prepared within sixty (60) days year prior to the release and substitution, substitution showing an appraised value of for the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitutionDate.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Substitution of Properties. Subject to the terms of and conditions set forth in this Section 2.6 after the expiration of the Lockout Period2.8, Borrower may cause Mortgage Borrower to obtain a release of the Lien of a Security Instrument Mortgage (and the related Mortgage Loan Documents) encumbering an Individual Property (a "Release “Substituted Individual Property"”) by substituting therefor therefore another full service hotel or resort property of like kind and quality acquired by Mortgage Borrower or an Affiliate of Mortgage Borrower (individuallyprovided, however, if the Substitute Property shall be owned by an Affiliate of Mortgage Borrower such Affiliate (i) shall become a "party to the Mortgage Loan Documents and shall be bound by the terms and provisions thereof as if it had executed the Mortgage Loan Documents and shall have the rights and obligations of Mortgage Borrower thereunder) (a “Substitute Individual Property" and collectively, the "Substitute Properties"”), provided that the following conditions precedent are satisfied:.
(a) The Maturity Date shall have not occurred. During the term of the Loan, Borrower shall not have the right to release cause Mortgage Borrower to substitute Properties, provided that the sum of the original Release Amount for all Substituted Individual Properties and substitute (i) more than one (1) Individual Property all Properties released under Section 2.5.1 in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five no event exceeds thirty percent (3530%) of the aggregate appraised values original principal balance of the Properties subject to the Lien of the Security Instruments as of the Closing Date.Loan;
(b) Lender shall have received at least thirty (30) days days’ prior written notice requesting the substitution and identifying the Substitute Individual Property and Release Substituted Individual Property.. If a Substitute Individual Property shall consist, in whole or in part, of a leasehold estate created pursuant to a ground lease such ground lease shall be reasonably acceptable to Lender;
(c) If the applicable Mortgage Borrower or Baltimore Owner continues to own an Individual Property subject to the Lien of a Security Instrumentnot released, Lender shall have received (i) a copy of a deed conveying all of the applicable Mortgage Borrower's ’s or Baltimore Owner’s right, title and interest in and to the Release Substituted Individual Property to a Person an entity other than such Mortgage Borrower or Principal Baltimore Owner pursuant to an arms length transaction and (ii) a letter from the applicable Mortgage Borrower or Baltimore Owner countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county or other appropriate land registry in which the Release Substituted Individual Property is located.;
(d) Lender shall have received a current Appraisal an appraisal of (i) each of the Substitute Individual Property and (ii) the Release Substituted Individual Property, each prepared within sixty dated no more than ninety (6090) days prior to the release and substitutionsubstitution date, showing by an appraised appraiser reasonably acceptable to Lender;
(e) The fair market value of the Substitute Individual Property equal to or greater is not less than one hundred percent (100%) of (A) the appraised fair market value of the Release Substituted Individual Property as of the Closing Date and date immediately preceding the substitution, which determination shall be made by Lender based on the appraisals delivered pursuant to subsection (Bd) above;
(f) After giving effect to the appraised value substitution, the Debt Service Coverage Ratio for the Mortgage Loan for all of the Release Properties (excluding the Substituted Individual Property and including the Substitute Individual Property) is not less than the Debt Service Coverage Ratio for the Mortgage Loan for all of the Properties as of the date immediately prior preceding the substitution;
(g) No Event of Default shall have occurred and be continuing. Lender shall have received an Officer’s Certificate certifying that, to such officer’s knowledge, the representations and warranties of Mortgage Borrower and Baltimore Owner contained in the Mortgage Loan Agreement and the other Mortgage Loan Documents are true and correct in all material respects on and as of the date of the proposed substitution with respect to the Substitute Individual Property and containing any other reasonable representations and warranties with respect to the Substitute Individual Property as Lender may reasonably require, unless such certificate would be inaccurate, such certificate to be in form and substance reasonably satisfactory to Lender;
(h) Lender shall have received to the extent available a Mezzanine Loan or similar endorsement to each Owner’s Title Insurance Policy insuring such Substitute Individual Property as of the date of the substitution.. The Title Insurance Policy issued with respect to the Substitute Individual Property shall contain such endorsements and affirmative coverages as are then available and are contained in the Owner’s Title Insurance Policies of Mortgage Borrower and Baltimore Owner insuring the Properties. Lender also shall have received copies of paid receipts or other evidence showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid;
(i) Lender shall have received a current survey for each Substitute Individual Property, certified to the title insurance company and Lender and their successors and assigns, in substantially the same form and content as the certification of the survey of the Substituted Individual Property prepared by a professional land surveyor licensed in the State in which the Substitute Individual Property is located and acceptable to the Rating Agencies, in accordance with the 1999 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys. Such survey shall reflect the same legal description contained in the Title Insurance Policy delivered to Mortgage Lender under the Mortgage Loan in connection with such Substitution relating to such Substitute Individual Property and shall include, among other things, a metes and bounds description of the real property comprising part of such Substitute Individual Property (unless such real property has been satisfactorily designated by lot number on a recorded plat). The surveyor’s seal shall be affixed to such survey and, if customary, such survey shall certify whether any portion of the surveyed property or the improvements thereon is located in a “one-hundred-year flood hazard area”;
(j) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for an Individual Property hereunder have been satisfied with respect to the Substitute Individual Property and evidence of the payment of all premiums payable for the existing policy period;
(k) Lender shall have received a Phase I environmental report dated not more than 90 days prior to the substitution and otherwise reasonably acceptable to a prudent lender and, if recommended under the Phase I environmental report, a Phase II environmental report acceptable to a prudent lender, which conclude that the Substitute Individual Property does not contain any unacceptable levels of hazardous materials and is not subject to any significant risk of contamination from any off-site hazardous materials. If any such report discloses the presence of any such hazardous materials or the risk of such contamination from any off-site hazardous materials, such report shall include an estimate of the cost of any related remediation and Borrower shall deposit with Lender (which deposit may be made in the form of a Letter of Credit) an amount equal to one hundred twenty-five percent (125%) of such estimated cost, which deposit shall constitute additional security for the Loan and shall be disbursed to pay for the costs of remediation in the manner provided herein for the disbursement of the Required Repair Fund; provided, however, such deposit shall be waived to the extent that Mortgage Borrower is required to make such deposit with Mortgage Lender under the Mortgage Loan. Any remaining balance of such deposit (or Letter of Credit) shall be released to Borrower upon the delivery to Lender of (i) an update to such report indicating that there is no longer any such hazardous materials on the Substitute Individual Property or any significant risk of contamination from any such off-site hazardous materials that has not been acceptably remediated and (ii) paid receipts or other reasonable evidence indicating that the costs of all such remediation work have been paid;
(l) Borrower shall deliver, or cause to be delivered, to Lender (i) updates certified by Borrower of all organizational documentation related to Mortgage Borrower and Borrower and/or the formation, structure, existence, good standing and/or qualification to do business delivered to Lender on the Closing Date; (ii) good standing certificates and/or certificates of qualification to do business in the jurisdiction in which the Substitute Individual Property is located (if required in such jurisdiction); and (iii) resolutions of Mortgage Borrower and Borrower authorizing the substitution and any actions taken in connection with such substitution; provided that such organizational documents, structure and other documents delivered in accordance with the foregoing shall be reasonably acceptable to an ordinary prudent lender;
(m) Lender shall have received copies of the opinions of Mortgage Borrower’s counsel delivered to Mortgage Lender under Section 2.8(o) of the Mortgage Loan Agreement together with an update of the Insolvency Opinion indicating that the substitution does not affect the opinions set forth therein acceptable to REMIC Trust;
(n) Borrower shall have caused Mortgage Borrower to have paid, unless Mortgage Borrower contesting in accordance with terms of the Mortgage Loan Documents or escrowed with Mortgage Lender, all Basic Carrying Costs relating to the Substitute Individual Property, including without limitation, (i) accrued and currently due and payable but unpaid insurance premiums relating to the Substitute Individual Property, and (ii) currently due and payable Taxes (including any in arrears) relating to the Substitute Individual Property and (iii) currently due and payable maintenance charges and other impositions relating to the Substitute Individual Property;
(o) Borrower shall have paid or reimbursed Lender for all reasonable costs and expenses incurred by Lender (including, without limitation, reasonable attorneys fees and disbursements) in connection with the substitution and Borrower shall have caused Mortgage Borrower to have paid all recording charges, filing fees, taxes or other expenses (including, without limitation, mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution, however, Borrower shall not be required to pay any fee to Lender or Servicer in connection with a substitution;
(p) Lender shall have received annual operating statements and occupancy statements for the Substitute Individual Property for the most current completed fiscal year and a current operating statement for the Substituted Individual Property, each certified to Lender as being true and correct in all material respects a certificate from Borrower certifying that there has been no material adverse change in the financial condition of the Substitute Individual Property since the date of such operating statements;
(q) Borrower shall have delivered or caused Mortgage Borrower to have delivered to Lender estoppel certificates from any existing tenants under Material Leases at the Substitute Individual Property. All such estoppel certificates shall be in form used in connection with the original closing of the Loan or otherwise in form and substance reasonably acceptable to an ordinary prudent lender and shall indicate that (i) the subject lease is a valid and binding obligation of the tenant thereunder, (ii) to tenant’s knowledge, there are no defaults under such lease on the part of the landlord or tenant thereunder, (iii) to tenant’s knowledge, the tenant thereunder has no defense or offset to the payment of rent under such leases, (iv) no rent under such lease has been paid more than one (1) month in advance, (v) the tenant thereunder has no option under such lease to purchase all or any portion of the Substitute Individual Property and
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Wyndham International Inc)
Substitution of Properties. Subject to the terms of this Section 2.6 From and after the expiration of date twelve (12) months after the Lockout PeriodClosing Date, Borrower from time to time (not to exceed six (6) occasions) may obtain a release of offer to Lender as collateral for the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release PropertySubstitution") by substituting therefor another hotel property of like kind and quality acquired by Borrower one or more substitute properties (individuallyeach, a "Substitute Property" and and, collectively, the "Substitute Properties"; each Substitute Property to be considered a Property for all purposes of this Agreement) as replacements for Properties ("Replaced Properties"), subject to there then being no Default or Event of Default (excepting non-monetary defaults relating solely to the Replaced Property, including, but not limited to, a breach of one or more representations or warranties, but not excepting any default relating to financial statements or their delivery or representations or warranties in respect thereof) and subject further to the satisfaction of all the conditions set forth below with respect to each Substitution and to Borrower making the representations and warranties in Section 5.1 hereof as to each Substitute Property and to Borrower satisfying the closing conditions of Section 3.1 hereof as to each Substitute Property. Any proposed Substitution shall be submitted by Borrower to Lender in writing, together with copies of all reports and other due diligence materials necessary to enable Lender to ascertain compliance with the conditions below, at least ninety (90) days prior to the proposed date of Substitution. No Substitute Property may qualify as a Replaced Property and, after giving effect to the Substitution, no Property may share its tax parcel with any property not secured by the applicable Mortgage. No Property may be substituted if it includes property which is needed to comply with a tenant's expansion right from an adjoining Property onto such Property unless all of the Properties related to the tenant's expansion right are contemporaneously substituted.
(a) For each Substitution, the Substitute Property or Substitute Properties must have an aggregate NOI of not less than the greater of (i) the aggregate NOI of the Replaced Property or Properties as of the Closing Date as set forth on Schedule 1 attached hereto, and (ii) the aggregate NOI of the Replaced Property or Replaced Properties for the immediately preceding 12 month period;
(b) For each Substitution, the Substitute Property or Substitute Properties must have an aggregate FMV of not less than the greater of (i) the FMV of the Replaced Property or Replaced Properties as of the Closing Date as set forth on Schedule 1 attached hereto, and (ii) the FMV of the Replaced Property or Replaced Properties immediately prior to the Substitution;
(c) As evidenced by estoppel certificates reasonably acceptable to Lender and the Rating Agencies, all tenants in each Substitute Property that lease more than 20,000 s.f. (or whose rent constitute greater than thirty percent (30%) of the Gross Income for the Substitute Property) must be occupying their space, open for business and paying rent (after any free rent, credit or rent abatement periods) and not in arrears more than 30 days, and all free rent or rental grace periods shall have expired, and the tenants shall not be in bankruptcy (provided, however, the impact of any tenant not qualifying under this subparagraph (c) would be the disqualification of the income associated with that tenant for purposes of calculating NOI, or establishing FMV for the affected Substitute Property, not the elimination of the property as a potential Substitute Property);
(d) With respect to each Substitute Property, leases affecting at least 90% of the net rentable area must have average remaining terms of five (5) years or more, as of the date of Substitution;
(e) Borrower must hold fee title to the Substitute Properties and the Substitute Properties must be free of all encumbrances, easements and other title exceptions (except those expressly permitted by Lender in its reasonable discretion);
(f) Borrower must continue to be a bankruptcy-remote single purpose entity and, immediately prior to each such Substitution, Borrower shall deliver bankruptcy (including, but not necessarily limited to, non-consolidation) and other legal opinions as reasonably required by Lender;
(g) Borrower must deliver an environmental report for each Substitute Property in form, findings and substance acceptable to Lender in its reasonable discretion and the Rating Agencies;
(h) Borrower must (i) deliver to Lender and the Rating Agencies an engineering report (including, but not limited to, analysis of seismic risk for any Substitute Property situated in a seismic zone, and which analysis must show that the Substitute Property does not have a probable maximum loss percentage that exceeds the probable maximum loss percentage of the Replaced Property and in no event shall such Substitute Property have a probable maximum loss of more than 15%) in form, findings and substance acceptable to Lender and the Rating Agencies in their reasonable discretion, and (ii) deposit 125% of estimated deferred maintenance cost (if any) into a reserve account with Lender where the estimated cost of such deferred maintenance exceeds $100,000 per Substitute Property;
(i) Each Substitute Property must comply with all title, land use, legal, environmental and insurance requirements provided in the Loan Documents, and Lender must receive title insurance, surveys, casualty insurance, and other due diligence items, all acceptable to Lender in its reasonable discretion; and with respect to the remaining Properties encumbered by the applicable Mortgage, Borrower shall provide Lender with title insurance endorsements reasonably acceptable to Lender to the effect that such release will not impair the priority of such Mortgage on the remaining Properties encumbered by the Mortgage;
(j) After giving effect to the Substitution, not more than sixty (60%) percent of the rentable square footage of the Property Pool would be located in Los Angeles, Riverside, San Bernardino and Orange Counties in California;
(k) The Rating Agencies must have confirmed in writing that such Substitution would not result in a downgrade, qualification, or withdrawal of the ratings of the securities issued pursuant to any Securitization. Except as provided in Subsection 2.12 (m) and Section 2.15 below, however, Rating Agency confirmation shall not be so required if all of the following conditions precedent are satisfied:
(a) Borrower shall not have the right to release and substitute (i) more than one The Replaced Property's Allocated Loan Amount is not among that of the top ten (110) Individual Property in accordance with this Section in any twelve (12) month period and Properties ranked by Allocated Loan Amount as set forth on Schedule 1 attached hereto;
(ii) any Properties after such time as Borrower has released and substituted Properties which in The Allocated Loan Amount of the aggregate had an appraised value of more Replaced Property is less than thirty-five percent (355%) of the aggregate appraised values then-current principal amount of the Properties subject Loan immediately preceding the proposed Substitution; and
(iii) After giving effect to the Lien proposed Substitution, the aggregate Allocated Loan Amount for all Substitute Properties substituted since the Closing Date is less than 15% of the Security Instruments original principal amount of the Loan for all Properties as of the Closing Date. If the Substitution is to occur prior to the Securitization, the Substitution is subject to Lender's prior written consent. Borrower acknowledges and agrees that Lender's decision to approve or disapprove of any Substitution shall be in Lender's reasonable discretion, which may include consideration of the impact such Substitution will have on the Rating Agencies review, analysis and concerns in connection with a Securitization.
(bl) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the The Substitute Property must be income producing and Release Property.
(c) If the Borrower continues to own an Individual Property subject developed property and similar in quality, nature and property type to the Lien of a Security Instrument, Lender shall have received Replaced Property (i"Like for Like") a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records except for the county Property at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx and the Properties known as Home Depot, Pak N' Save and Kmart, all located in Emeryville, California (identified as Properties numbered 67, 69, 70 and 71, respectively, on Exhibit A attached hereto) for which the Release Property is located.
Substitute Properties may be either industrial, office (d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Propertyexcept office Properties may not be substituted for retail Properties), each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to research & development or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.grocery anchored retail properties);
Appears in 1 contract
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period2.9, Borrower may obtain cause Mortgage Borrower to obtain, from time to time, a release of the Lien of one or more Individual Properties (each, a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "“Release Property"”) by substituting therefor another hotel property one or more luxury residential apartment building properties of like kind and quality located in the United States of America acquired by Mortgage Borrower or an Affiliate of Mortgage Borrower (provided, however, that if the Substitute Property shall be owned by an Affiliate of Mortgage Borrower, such Affiliate (i) shall be wholly owned, directly or indirectly, by a Mezzanine B Borrower Entity, (ii) shall assume all the obligations of Mortgage Borrower under the Security Instrument, the Mortgage Note and the other Mortgage Loan Documents (subject, however, to the exculpatory provisions of Section 9.4 hereof) and (iii) shall become a party to the Mortgage Note and the other Mortgage Loan Documents and shall be bound by the terms and provisions thereof as if it had executed the Mortgage Note and the other Mortgage Loan Documents and shall have the rights and obligations of Mortgage Borrower thereunder) (individually, a "“Substitute Property" ” and collectively, the "“Substitute Properties"”), provided that the following conditions precedent are satisfiedsatisfied or, in Lender’s sole discretion, waived:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days days’ prior written notice requesting the substitution and identifying the Substitute Property and the Release Property.
(i) All conditions to the release of such Individual Property and substitution of such Substitute Property shall have been satisfied in accordance with the terms of the Mortgage Loan Documents (as independently determined by Lender in its reasonable discretion) and (ii) all conditions to the release of such Individual Property and substitution of such Substitute Property shall have been satisfied in accordance with the terms of Section 2.9 of the Mezzanine B Loan Agreement with respect to such release and substitution.
(c) If the Mortgage Borrower continues Entity that owns the Release Property will continue to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's such Mortgage Borrower Entity’s right, title and interest in and to the Release Property to a Person other than Mortgage Borrower or Mortgage Principal pursuant to an arms length transaction and (ii) a letter from Mortgage Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and prepared not earlier than one (ii1) the Release Property, each prepared within sixty (60) days year prior to the release and substitution, substitution showing an appraised value of for the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitutionDate.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Archstone Smith Operating Trust)
Substitution of Properties. Subject to the terms of and conditions set forth in this Section 2.6 after Section, at any time following the expiration commencement of the Lockout Defeasance Period, Borrower may obtain a release of the Lien of a Security Instrument the Mortgage (and the related Loan Documents) encumbering an Individual Property to the extent it encumbers one or more Mortgaged Properties (a "Release PropertySUBSTITUTED PROPERTY") by substituting therefor another hotel property of like kind and quality one or more office properties acquired by Borrower (individually, a "Substitute PropertySUBSTITUTE PROPERTY" and collectively, the "Substitute PropertiesSUBSTITUTE PROPERTIES"), provided that (a) the Substitution Conditions are satisfied with respect to the Substitute Properties, (b) no such substitution may occur after the Anticipated Repayment Date, (c) such substitution shall not be allowed more than two (2) times during the term of the Loan and (d) not more than five (5) Mortgaged Properties may be released from the Lien of the Mortgage (and the related Loan Documents) during the term of the Loan pursuant to this SECTION 11. Any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfied:(collectively, the "SUBSTITUTION CONDITIONS"):
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed or an assignment and assumption of lessee's interest in the Ground Lease (together with the ground lessor's consent thereto), as applicable, conveying all of Borrower's right, title and interest in and to the Release Substituted Property or Substituted Properties then being Released to a Person an entity other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company the Title Company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Release Substituted Property is located or in the counties in which the Substituted Properties are located.;
(dii) Lender shall have received a current Appraisal an appraisal of (i) the Substitute Property and (ii) the Release Propertyor Substitute Properties, each prepared within as applicable, dated no more than sixty (60) days prior to the release and substitutionsubstitution by an appraiser acceptable to the Rating Agencies, showing indicating an appraised value of the Substitute Property or Substitute Properties, as applicable, that is equal to or greater than one hundred percent (100%) of (A) the appraised value Release Price of the Release Substituted Property or Substituted Properties, then being Released, determined by Lender as of the Closing Date Date;
(iii) after giving effect to the substitution, the Debt Service Coverage Ratio for the Mortgaged Properties (including the Substitute Properties but excluding the Substituted Properties) shall be at least equal to the greater of (i) 2.052:1 and (Bii) the appraised value Debt Service Coverage Ratio for the Loan for all of the Release Mortgaged Properties immediately preceding the substitution;
(iv) the Net Operating Income for any Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the proposed substitution.Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available (which period of time, in any event, shall not be less than one (1) year);
Appears in 1 contract
Samples: Loan Agreement (Arden Realty Inc)
Substitution of Properties. Subject From and after the date twelve (12) months after the A Loan Closing Date, Borrower from time to time (not to exceed six (6) occasions) may offer to Lenders as collateral for the Loans (a “Substitution”) one or more substitute properties (each, a “Substitute Property” and, collectively, “Substitute Properties”; each Substitute Property to be considered a Property for all purposes of this Agreement) as replacements for Properties (“Replaced Properties”), subject to there then being no Default or Event of Default (excepting non-monetary defaults relating solely to the Replaced Property, including, but not limited to, a breach of one or more representations or warranties, but not excepting any default relating to financial statements or their delivery or representations or warranties in respect thereof) and subject further to the satisfaction of all the conditions set forth below with respect to each Substitution and to Borrower making the representations and warranties in Section 5.1 hereof as to each Substitute Property and to Borrower satisfying the closing conditions of Section 3.1 hereof as to each Substitute Property. Any proposed Substitution shall be submitted by Borrower to Lenders in writing, together with copies of all reports and other due diligence materials necessary to enable Lender to ascertain compliance with the conditions below, at least ninety (90) days prior to the proposed date of Substitution. No Substitute Property may qualify as a Replaced Property and, after giving effect to the Substitution, no Property may share its tax parcel with any property not secured by the applicable Mortgage. No Property may be substituted if it includes property which is needed to comply with a tenant’s expansion right from an adjoining Property onto such Property unless all of the Properties related to the tenant’s expansion right are contemporaneously substituted.
(a) For each Substitution, the Substitute Property or Substitute Properties must have an aggregate NOI of not less than the greater of (i) the aggregate NOI of the Replaced Property or Properties as of the B Loan Closing Date as set forth on Schedule 1 attached hereto, and (ii) the aggregate NOI of the Replaced Property or Replaced Properties for the immediately preceding 12 month period;
(b) For each Substitution, the Substitute Property or Substitute Properties must have an aggregate FMV of not less than the greater of (i) the FMV of the Replaced Property or Replaced Properties as of the B Loan Closing Date as set forth on Schedule 1 attached hereto, and (ii) the FMV of the Replaced Property or Replaced Properties immediately prior to the Substitution;
(c) As evidenced by estoppel certificates reasonably acceptable to Lenders and the Rating Agencies, all tenants in each Substitute Property that lease more than 20,000 s.f. (or whose rent constitute greater than thirty percent (30%) of the Gross Income for the Substitute Property) must be occupying their space, open for business and paying rent (after any free rent, credit or rent abatement periods) and not in arrears more than 30 days, and all free rent or rental grace periods shall have expired, and the tenants shall not be in bankruptcy (provided, however, the impact of any tenant not qualifying under this subparagraph (c) would be the disqualification of the income associated with that tenant for purposes of calculating NOI, or establishing FMV for the affected Substitute Property, not the elimination of the property as a potential Substitute Property);
(d) With respect to each Substitute Property, leases affecting at least 90% of the net rentable area must have average remaining terms of this Section 2.6 after the expiration five (5) years or more, as of the Lockout Perioddate of Substitution;
(e) Borrower must hold fee title to the Substitute Properties and the Substitute Properties must be free of all encumbrances, easements and other title exceptions (except those expressly permitted by Lender in its reasonable discretion);
(f) Borrower must continue to be a bankruptcy-remote single purpose entity and, immediately prior to each such Substitution, Borrower may obtain shall deliver bankruptcy (including, but not necessarily limited to, non-consolidation) and other legal opinions as reasonably required by Lenders;
(g) Borrower must deliver an environmental report for each Substitute Property in form, findings and substance acceptable to Lenders in their reasonable discretion and the Rating Agencies;
(h) Borrower must (i) deliver to Lenders and the Rating Agencies an engineering report (including, but not limited to, analysis of seismic risk for any Substitute Property situated in a release seismic zone, and which analysis must show that the Substitute Property does not have a probable maximum loss percentage that exceeds the probable maximum loss percentage of the Lien Replaced Property and in no event shall such Substitute Property have a probable maximum loss of a Security Instrument (more than 15%) in form, findings and substance acceptable to Lenders and the related Rating Agencies in their reasonable discretion, and (ii) deposit 125% of estimated deferred maintenance cost (if any) into a reserve account with Existing Lender for the benefit of Lenders where the estimated cost of such deferred maintenance exceeds $100,000 per Substitute Property;
(i) Each Substitute Property must comply with all title, land use, legal, environmental and insurance requirements provided in the Loan Documents, and Lender must receive title insurance, surveys, casualty insurance, and other due diligence items, all acceptable to Lender in its reasonable discretion; and with respect to the remaining Properties encumbered by the applicable Mortgage, Borrower shall provide Lenders with title insurance endorsements reasonably acceptable to Lenders to the effect that such release will not impair the priority of such Mortgage on the remaining Properties encumbered by the Mortgage;
(j) encumbering an Individual After giving effect to the Substitution, not more than sixty (60%) percent of the rentable square footage of the Property Pool would be located in Los Angeles, Riverside, San Bernardino and Orange Counties in California;
(k) The Rating Agencies must have confirmed in writing that such Substitution would not result in a "Release Property"downgrade, qualification, or withdrawal of the ratings of the securities issued pursuant to any Securitization. Except as provided in Subsection 2.12 (m) by substituting therefor another hotel property and Section 2.15 below, however, Rating Agency confirmation shall not be so required if all of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Borrower shall not have the right to release and substitute (i) more than one The Replaced Property’s Allocated Loan Amount A is not among that of the top ten (110) Individual Property in accordance with this Section in any twelve (12) month period and Properties ranked by Allocated Loan Amount A as set forth on Schedule 1 attached hereto;
(ii) any Properties after such time as Borrower has released and substituted Properties which in The Allocated Loan Amount A of the aggregate had an appraised value of more Replaced Property is less than thirty-five percent (355%) of the aggregate appraised values then-current principal amount of the A Loan immediately preceding the proposed Substitution; and
(iii) After giving effect to the proposed Substitution, the aggregate Allocated Loan Amount A for all Substitute Properties substituted since the A Loan Closing Date is less than 15% of the original principal amount of the A Loan. If the Substitution is to occur prior to the Securitization, the Substitution is subject to the Lien Lender’s prior written consent. Borrower acknowledges and agrees that Lenders’ decision to approve or disapprove of any Substitution shall be in Lenders’ reasonable discretion, which may include consideration of the Security Instruments as of impact such Substitution will have on the Closing DateRating Agencies review, analysis and concerns in connection with a Securitization.
(bl) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the The Substitute Property must be income producing and Release Property.
(c) If the Borrower continues to own an Individual Property subject developed property and similar in quality, nature and property type to the Lien of a Security Instrument, Lender shall have received Replaced Property (i“Like for Like”) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records except for the county Property at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx and the Properties known as Home Depot, Pak N’ Save and Kmart, all located in Emeryville, California (identified as Properties numbered 66, 67, 68 and 69, respectively, on Exhibit A attached hereto) for which the Release Property is located.
Substitute Properties may be either industrial, office (d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Propertyexcept office Properties may not be substituted for retail Properties), each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to research & development or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitution.grocery anchored retail properties);
Appears in 1 contract
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument request Xxxxxx’s permission to substitute, for any one (and the related Loan Documents1) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individuallyParcel, a "Substitute Property" different parcel or parcels of real property together with improvements thereon and personal property related thereto (collectively, the "“Substitute Properties"Parcel”). Lender shall reasonably consider any such request; provided that, provided that it shall not be considered unreasonable for Lender to withhold its consent to any such requested substitution, and Borrower shall have no rights under this Section 12.5, if, among other reasons, any one or more of the following conditions precedent are satisfiedis true with respect to such proposed substitution:
(a) Borrower shall not have the right to release and substitute (i) Such proposed substitution would result in the occurrence of more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and such substitution during the term of the Loan.
(ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value The proposed Substitute Parcel:
(A) is not of more a quality comparable to or greater than thirty-five percent (35%) that of the aggregate appraised values Parcel released in connection with such substitution (the “Substitution Release Parcel”); or
(B) does not have a fair market value (as evidenced to Lender’s satisfaction based on appraisal reports of each of the Properties subject to Substitute Parcel and the Lien of the Security Instruments as of the Closing Date.
Substitution Release Parcel that (bw) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other are dated no earlier than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty (60) days prior to the release and proposed substitution, showing an appraised value of (x) satisfy the Substitute Property requirements pertaining to appraisal reports set forth in the Commitment, (y) are otherwise reasonably satisfactory to Lender, and (z) are paid for by Borrower) equal to or greater than one hundred the greater of (1) the fair market value of the Substitution Release Parcel as of the date of recordation of this Deed of Trust, and (2) the fair market value of the Substitution Release Parcel immediately prior to such proposed substitution.
(iii) The annual Rents (excluding security deposits) under Leases in effect on the Property that will remain subject to the liens and security interests of the Deed of Trust and the other Loan Documents following the substitution, excluding the Substitution Release Parcel and including the Substitute Parcel (the “Post-Substitution Property”) for the 12-month period following the substitution (as reasonably determined by Lender), do not provide debt service coverage for the annual Debt Service Payments on the Note (after payment of the annual Allocable Insurance Premium Amount, and annual Impositions and operating expenses) that is equal to or greater than the greater of (x) 1.70:1.0 and (y) the debt service coverage provided by the Property for the 12-month period prior to the substitution, and in connection therewith, not less than 30 days prior to the date of the substitution, Borrower will deliver to Lender certified rent rolls and certified operating statements for the preceding 12 calendar months for the Substitution Release Parcel and the Post-Substitution Property (prepared on a cash basis, using methodology satisfactory to Lender, with income and expenses treated consistently and in the ordinary course of business), together with such other information as Lender may require to make its determination;
(iv) The outstanding principal balance of the Note is not less than or equal to seventy percent (10070%) of (A) the appraised fair market value of the Release Property Post-Substitution Property, as evidenced to Lender’s satisfaction based on an appraisal report of the Closing Date Post-Substitution Property that (w) is dated no earlier than sixty (60) days prior to the proposed substitution, (x) satisfies the requirements pertaining to appraisal reports set forth in the Commitment, (y) is otherwise reasonably satisfactory to Lender, and (Bz) the appraised value of the Release Property immediately is paid for by Xxxxxxxx).
(v) A Transfer hereunder (other than a Permitted Transfer) has occurred prior to the date of the proposed substitution.
(vi) The Substitute Parcel does not meet Xxxxxx’s then-current mortgage lending and underwriting criteria and standards (including, without limitation, standards relating to environmental and hazardous materials matters, engineering, title/land use, legal matters, leasing and other underwriting standards), as determined by Lender in its sole discretion.
(vii) At the time of the proposed substitution, either the Substitute Parcel or Borrower does not satisfy one or more of the applicable requirements that were conditions to Lender’s obligation to make the Loan, as set forth in that certain Loan Application and Commitment Agreement by and between Borrower and Lender dated as of December 10, 2003 (the “Commitment”) and executed in connection with the Loan, that would have been applicable if the Substitute Parcel [rather than the Substitution Release Parcel] had been included as security for the Loan), including without limitation the requirement that Borrower be free from bankruptcy and solvent.
(viii) Borrower does not deliver to Lender, at least thirty (30) days prior to the requested date of Xxxxxx’s approval of the proposed substitution, all due diligence materials and related information required by Lender to evaluate the Substitute Parcel and to confirm that the requirements referenced in Section 12.5 (vii) above have all been satisfied.
(ix) Borrower does not deliver to Lender endorsement(s) to Xxxxxx’s title insurance policy(ies), or new title insurance policy(ies), satisfactory to Lender that (A) extend the effective date of the title insurance policy(ies) obtained by Lender with respect to the Property to the effective date of the substitution; (B) insure Lender that Lender holds a first priority lien on the Substitute Parcel (subject only to such exceptions as Lender may have approved prior to the date of the substitution); (C) confirm no change in the priority of the Deed of Trust (with respect to the balance of the Property, other than the Substitution Release Parcel) or in the aggregate amount of coverage; (D) consent to the substitution; (E) waive any defense resulting from the substitution; and (F) confirm that the Substitution Release Parcel and the Post-Substitution Property constitute separate tax lots.
(x) Borrower does not deliver to Lender, prior to or concurrently with the substitution: (i) either (A) a deed of trust which is sufficient to, upon recordation, create a first priority lien against the Substitute Parcel in favor of Xxxxxx, an assignment of leases and rents, a financing statement, an environmental indemnity agreement, and any other instruments and documents required by Lender in connection with the release of the Property and the substitution of the Substitute Parcel, each of which is substantially in the form delivered by Xxxxxxxx as of the date of recordation of this Deed of Trust and otherwise in form reasonably satisfactory to Lender, or (B) amendments to the Loan Documents in effect as of the date of recordation of this Deed of Trust in form reasonably satisfactory to Lender that accomplish the same purposes as the documents described in clause (A) immediately above, and (ii) legal opinions of counsel acceptable to Lender opining on the due authorization, execution, delivery, enforceability and such other matters as Lender shall require with respect to the documents described in clause (i) immediately above.
(xi) The Substitute Parcel is not in an asset class or is not in a geographic location that Lender is investing in at the time of the proposed substitution.
(xii) The Substitute Parcel is not located in California.
(xiii) Lender is not reasonably satisfied that no creditors’ rights issues will arise in connection with the substitution.
(xiv) Prior to or concurrently with such proposed substitution, Borrower does not pay all costs and expenses, including reasonable attorneys’ fees if outside counsel is engaged by Xxxxxx, and any other reasonable third party costs, incurred by Xxxxxx in connection with any proposed substitution.
(xv) Not less than 10 days prior to the date of the proposed substitution, Xxxxxxxx does not deliver to Lender consents to the substitution and concurrent release of the Substitution Release Parcel by entities holding liens affecting the Property or holding any other interest in the Property that would be affected by the substitution and concurrent release, including parties to any Property Documents or to any Leases.
(xvi) Borrower does not deliver to Lender a fully executed amendment to each reciprocal easement agreement affecting the Property that is satisfactory to Lender and that joins the transferee of the Substitution Release Parcel as a party to the agreement and that provides for any additional easements, restrictions and payment obligations that Lender deems reasonably necessary for the continued operation and maintenance of the Post-Substitution Property.
(xvii) Borrower does not deliver to Lender evidence satisfactory to Lender that (A) the Post-Substitution Property and the Substitution Release Parcel each separately conforms to and is in compliance with Law, and (B) the Post-Substitution Property and the Substitution Release Parcel each constitutes a self-contained unit, having direct on-site connection to all utilities and direct access to one or more public streets.
(xviii) Borrower does not deliver to Lender evidence satisfactory to Lender that following the proposed substitution and the concurrent release of the Substitution Release Parcel, the parking provided to the Post-Substitution Property will continue to satisfy the applicable requirements of the Loan Documents (as such requirements may be adjusted by Lender, in its reasonable discretion, to account for such substitution), or does not deliver evidence satisfactory to Lender that the parking provided to the Substitute Parcel satisfies Lender’s then-current underwriting standards.
Appears in 1 contract
Samples: Promissory Note (Kilroy Realty Corp)
Substitution of Properties. Subject to the terms of and -------------------------- conditions set forth in this Section 2.6 after the expiration of the Lockout Period2.7, Borrower may obtain a release of the ----------- Lien of a Security Instrument Mortgage (and the related Loan Documents) encumbering an Individual Property (a "Release PropertySUBSTITUTED PROPERTY") by substituting therefor another hotel office or -------------------- industrial property of like kind and quality acquired by Borrower (individually, a "Substitute PropertySUBSTITUTE PROPERTY" and collectively, the "Substitute PropertiesSUBSTITUTE PROPERTIES"), provided ------------------- --------------------- that (a) the Substitution Conditions are satisfied with respect to Substitute Properties other than a Substituted Property damaged by a casualty or affected by a condemnation or eminent domain proceeding and for which Net Proceeds have not been made available by Lender to Borrower for Restoration pursuant to the terms and provisions of Section 7.1.3, (b) no such substitution may occur after ------------- the Anticipated Repayment Date and (c) such substitution shall not be allowed more than three (3) times during the term of the Loan. In addition, any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfiedprecedent:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed or an assignment and assumption of lessee's interest in the Ground Lease (together with the ground lessor's consent thereto), as applicable, conveying all of Borrower's right, title and interest in and to the Release Substituted Property to a Person an entity other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Release Substituted Property is located.
(dii) Lender shall have received a current Appraisal an appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within dated no more than sixty (60) days prior to the release and substitutionsubstitution by an appraiser acceptable to the Rating Agencies, showing indicating an appraised value of the Substitute Property that is equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Substituted Property determined by Lender at the time of the encumbrance of the Substituted Property by the related Mortgage in connection with the Initial Advance or a Subsequent Advance, as applicable.
(iii) After giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties is not less than the Debt Service Coverage Ratio for the Loan for all of the Properties as of the Outside Closing Date and (B) the appraised value as of the Release date immediately preceding the substitution.
(iv) The Net Operating Income for the Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the proposed Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available.
(v) The Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the Substitute Property is greater than one hundred twenty-five percent (125%) of the Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the related Substituted Property. For purposes of this clause (v), the Debt Service Coverage Ratio with respect to a Substitute Property or a Substituted Property shall be calculated using the Net Operating Income with respect to such Substitute Property or the Substituted Property, as applicable, and the principal and interest due and payable on the Note with respect to the related Pro rata Substitute Release Amount or Pro rata Release Amount, as applicable.
(vi) Lender shall have received evidence in writing from the Rating Agencies to the effect that such substitution will not result in a withdrawal, qualification or downgrade of the respective ratings in effect immediately prior to such substitution for the Securities issued in connection with the Securitization that are then outstanding.
(vii) No Default or Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each Loan Document on Borrower's part to be observed or performed. Lender shall have received a certificate from Borrower confirming the foregoing, stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of the substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as the Rating Agencies may require, unless such certificate would be inaccurate, such certificate to be in form and substance satisfactory to the Rating Agencies.
(viii) Borrower shall have executed, acknowledged and delivered to Lender (A) a Mortgage, an Assignment of Leases and two UCC Financing Statements with respect to the Substitute Property, together with a letter from Borrower countersigned by a title insurance company acknowledging receipt of such Mortgage, Assignment of Leases and UCC-1 Financing Statements and agreeing to record or file, as applicable, such Mortgage, Assignment of Leases and Rents and one of the UCC-1 Financing Statements in the real estate records for the county in which the Substitute Property is located and to file one of the UCC-1 Financing Statement in the office of the Secretary of State of the state in which the Substitute Property is located, so as to effectively create upon such recording and filing valid and enforceable Liens upon the Substitute Property, of the requisite priority, in favor of Lender (or such other trustee as may be desired under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents and (B) an Assignment of Agreements and an Environmental Indemnity with respect to the Substitute Property. The Mortgage, Assignment of Leases, UCC-1 Financing Statements and Environmental Indemnity shall be the same in form and substance as the counterparts of such documents executed and delivered with respect to the related Substituted Property subject to modifications reflecting the Substitute Property as the Individual Property that is the subject of such documents and such modifications reflecting the laws of the state in which the Substitute Property is located as shall be recommended by the counsel admitted to practice in such state and delivering the opinion as to the enforceability of such documents required pursuant to clause (xv) below. The Mortgage encumbering the Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording, intangibles or similar tax and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount secured by such Mortgage shall be equal to one hundred fifty percent (150%) of the amount of the Loan allocated to the Substitute Property. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the "SUBSTITUTE RELEASE AMOUNT") shall the Release Amount of ------------------------- the related Substituted Property.
(ix) Lender shall have received (A) any "tie-in" or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the date of the substitution available with respect to the Title Insurance Policy insuring the Lien of the Mortgage with respect to the Substitute Property and (B) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Mortgage encumbering the Substitute Property, issued by the title company that issued the Title Insurance Policies insuring the Lien of the existing Mortgages and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Release Amount if the "tie-in" or similar endorsement described above is available or, if such endorsement is not available, in an amount equal to one hundred fifty percent (150%) of the Substitute Release Amount, (2) insure Lender that the relevant Mortgage creates a valid first lien on the Substitute Property encumbered thereby, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are contained in the Title Insurance Policies insuring the Liens of the existing Mortgages, and (4) name Lender as the insured. Lender also shall have received copies of paid receipts showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.
Appears in 1 contract
Substitution of Properties. Subject to the terms of and conditions set forth in this Section 2.6 after the expiration of the Lockout Period2.8, Borrower or IDOT Guarantor, as applicable, may obtain a release of the Lien of a Security Instrument Mortgage (and the related Loan Documents) encumbering an one (1) Individual Property (a "Release “Substituted Property"”) by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "“Substitute Property" ” and collectively, the "“Substitute Properties"”), provided that the following conditions precedent are satisfied:
(a) Borrower the Maturity Date shall have not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Dateoccurred.
(b) Lender shall have received at least thirty (30) days days’ prior written notice requesting the substitution and identifying the Substitute Property and Release Substituted Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of the applicable Borrower's ’s or IDOT Guarantor’s right, title and interest in and to the Release Substituted Property to a Person an entity other than Borrower any Borrower, IDOT Guarantor or Principal Guarantor, pursuant to an arms arm’s length transaction and (ii) a letter from the applicable Borrower or IDOT Guarantor, countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Substituted Property is located.
(d) Lender shall have received a current Appraisal fee in the amount of one percent (i1.0%) of the Pro Rata Release Amount for the Substitute Property.
(e) Lender shall have received a reasonably acceptable appraisal of the Substitute Property and (ii) the Release Substituted Property, each prepared within as determined by Lender dated no more than sixty (60) days prior to the release and substitutionsubstitution date, showing by an appraised appraiser selected by Lender.
(f) The fair market value of the Substitute Property equal to or greater is not less than one hundred five percent (100105%) of the greater of: (A1) the appraised fair market value of the Release Substituted Property as of the Closing Date and (B2) the appraised fair market value of the Release Substituted Property as of the date immediately preceding the substitution, which determination shall be made by Lender based on the appraisals delivered pursuant to clause (e) above if the Loan is part of a Securitization.
(g) The Net Operating Income (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures used in connection with the underwriting of the Loan) for the Substitute Property does not show a downward trend over the three (3) years immediately prior to the date of the proposed substitution.
(h) The Net Operating Income (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures used in connection with the underwriting of the Loan) for the Substitute Property is greater than one hundred five percent (105%) of the Net Operating Income (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures used in connection with the underwriting of the Loan) for the Substituted Property.
(i) If the Loan is part of a Securitization, Lender shall have received confirmation in writing from the Rating Agencies to the effect that such substitution will not result in a withdrawal, qualification or downgrade of the respective ratings in effect immediately prior to such substitution for the Securities issued in connection with the Securitization that are then outstanding. If the Loan is not part of a Securitization, but has been identified as an asset for a Securitization scheduled to close within ninety (90) days, Lender shall have consented in writing to such substitution, which consent shall be given in Lender’s reasonable discretion.
(j) No Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each Loan Document on Borrower’s or IDOT Guarantor’s part to be observed or performed. Lender shall have received a certificate from Borrower confirming the foregoing, stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of the substitution with respect to each Borrower, IDOT Guarantor each Operating Tenant, the Properties and the Substitute Property and containing any other reasonable representations and warranties with respect to the Substitute Property (covering only new or different conditions which did not exist with respect to the Property being substituted) as the Rating Agencies (and Lender if the Loan is not part of a Securitization) may require, and such certificate to be in form and substance reasonably satisfactory to the Rating Agencies.
(k) Borrower or IDOT Guarantor, as applicable, shall (1) have executed, acknowledged and delivered to Lender (A) a Mortgage, an Assignment of Leases and Rents and two UCC-1 Financing Statements with respect to the Substitute Property, together with a letter from Borrower countersigned by a title insurance company acknowledging receipt of such Mortgage, Assignment of Leases and Rents and UCC-1 Financing Statements and agreeing to record or file, as applicable, such Mortgage, Assignment of Leases and Rents and one of the UCC-1 Financing Statements in the real estate records for the county in which the Substitute Property is located and to file one of the UCC-1 Financing Statements in the office of the Delaware Secretary of State, so as to effectively create upon such recording and filing, valid and enforceable Liens upon the Substitute Property, of the requisite priority, in favor of Lender (or such other trustee as may be desired under local law), subject only to the Permitted Encumbrances and such other Liens as are permitted pursuant to the Loan Documents and (B) an Environmental Indemnity with respect to the Substitute Property and (2) have caused the Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Mortgage, Assignment of Leases and Rents, UCC-1 Financing Statements and Environmental Indemnity shall be the same in form and substance as the counterparts of such documents executed and delivered with respect to the related Substituted Property subject to modifications reflecting only the Substitute Property as the Individual Property that is the subject of such documents and such modifications reflecting the laws of the state in which the Substitute Property is located as shall be recommended for similar transactions by the counsel admitted to practice in such state and delivering the opinion as to the enforceability of such documents required pursuant to clause (q) below. The Mortgage encumbering the Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording, intangibles or similar tax and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount secured by such Mortgage shall be equal to one hundred twenty-five percent (125%) of the Substitute Release Amount (defined below) of the Substitute Property. The amount of the Loan allocated to the Substitute Property (such amount being hereinafter referred to as the “Substitute Release Amount”) shall equal the Release Amount of the related Substituted Property.
(l) Lender shall have received (1) to the extent available any “tie-in” or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the date of the substitution with respect to the Title Insurance Policy insuring the Lien of the Mortgage with respect to the Substitute Property and (2) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Mortgage encumbering the Substitute Property, issued by the title company or its successor that issued the Title Insurance Policies insuring the Lien of the existing Mortgages and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Release Amount if the “tie-in” or similar endorsement described above is available or, if such endorsement is not available, in an amount equal to one hundred twenty five percent (125%) of the Substitute Release Amount, (2) insure Lender that the relevant Mortgage creates a valid first lien on the Substitute Property encumbered thereby, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are then available and are contained in the Title Insurance Policies insuring the Liens of the existing Mortgages to the extent applicable, and (4) name Lender as the insured. Lender also shall have received copies of paid receipts or other evidence showing that all premiums in respect of such endorsements and title insurance policies have been paid.
(m) Lender shall have received an approved current survey for each Substitute Property, prepared pursuant to the requirements contained in Section 4.1.27 hereof.
(n) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for an Individual Property hereunder have been satisfied with respect to the Substitute Property and evidence of the payment of all premiums payable for the existing policy period.
(o) Lender shall have received a Phase I environmental report acceptable in form and substance and from a provider acceptable to Lender and, if recommended under the Phase I environmental report, a Phase II environmental report reasonably acceptable to Lender, which conclude that the Substitute Property does not contain any hazardous materials in violation of law and is not subject to any risk of contamination from any off-site hazardous
Appears in 1 contract
Substitution of Properties. Subject to the terms of this Section 2.6 after the expiration of the Lockout Period, Borrower or Maryland Owner may obtain a the release of one or more Individual Properties from the Lien of a the Security Instrument (thereon and the related release of Borrower’s and/or Maryland Owner’s obligations under the Loan Documents) encumbering an Documents with respect to such Individual Property (other than those expressly stated to survive) (each such Individual Property, a "Release “Substituted Property") ”), by substituting therefor another hotel property of like kind one or more properties (such properties, individually and quality acquired by Borrower (individuallycollectively as the context requires, a "“Substitute Property" and collectively, the "Substitute Properties"”), provided that upon the satisfaction of each of the following conditions precedent are satisfiedconditions:
(a) After giving effect to the proposed substitution, no Event of Default shall exist and be continuing on the date that Borrower and/or Maryland Owner request the substitution;
(b) Borrower shall not have the right delivered to release and substitute (i) more than one (1) Individual Property in accordance with Lender all documentary deliveries required pursuant to this Section 2.6 at least twenty (20) days prior to the requested effective date of such proposed substitution (except as Lender may in any twelve its reasonable discretion shorten such period);
(12c) month period and (ii) any The Allocated Loan Amount on the Closing Date of the Substituted Property, when taken together with the Allocated Loan Amounts on the Closing Date of all other Substituted Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five pursuant to this Section 2.6, does not exceed fifteen percent (3515%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or original Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed Amount in the real estate records for the county in which the Release Property is located.aggregate;
(d) Lender shall have received an Officer’s Certificate that each of the representations and warranties contained in this Agreement and the other Loan Documents with respect to the Substituted Property and Substitute Property Borrower shall be true and correct in all material respects with respect to the Substitute Property Borrower and the Substitute Property as of the applicable Substitution Effective Date (as herein defined);
(e) The Substitute Property shall not have suffered a current Appraisal Casualty or Condemnation which has not been fully restored;
(f) The entity owning the Substitute Property (the “Substitute Property Borrower”) shall have indefeasible fee or ground leasehold title to the Substitute Property free and clear of any lien or other encumbrance except for Permitted Encumbrances and easements, restrictive covenants and other title exceptions and except to the extent that the failure with respect hereto would not reasonably be expected to result in an Individual Material Adverse Effect with respect to such Substitute Property;
(g) Either (i) the Substitute Substituted Property and shall be conveyed or (ii) the Release Propertyownership interests in the Substituted Borrower owning such Substituted Property shall be Transferred, each prepared within sixty in either case, to a Person other than Borrower or Maryland Owner;
(60h) days prior After giving effect to the release and proposed substitution, showing an appraised value of the Debt Service Coverage Ratio for the Properties (including the Substitute Property and excluding the Substituted Property) then remaining subject to the Liens of the Security Instrument (including the Substitute Property) shall be equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property Debt Service Coverage Ratio immediately prior to the date of the such substitution;
(i) Borrower shall have obtained and delivered to Lender a Rating Agency Confirmation/Notification with respect to such proposed substitution.;
Appears in 1 contract
Samples: Loan and Security Agreement (Urban Edge Properties)
Substitution of Properties. Subject to the terms of and -------------------------- conditions set forth in this Section 2.6 after the expiration of the Lockout Period2.7, Borrower may obtain a release of the ----------- Lien of a Security Instrument Mortgage (and the related Loan Documents) encumbering an Individual Property (a "Release PropertySUBSTITUTED PROPERTY") by substituting therefor another hotel office or -------------------- industrial property of like kind and quality acquired by Borrower (individually, a "Substitute PropertySUBSTITUTE PROPERTY" ------------------- and collectively, the "Substitute PropertiesSUBSTITUTE PROPERTIES"), provided that such substitution --------------------- shall not be allowed more than three (3) times during the term of the Loan. In addition, any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfiedprecedent:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Date.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying the Substitute Property and Release Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed or an assignment and assumption of lessee's interest in the Ground Lease (together with the ground lessor's consent thereto), as applicable, conveying all of Borrower's right, title and interest in and to the Release Substituted Property to a Person an entity other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed or assignment and assumption, as applicable, and agreeing to record such deed or assignment and assumption, as applicable, in the real estate records for the county in which the Release Substituted Property is located.
(dii) Lender shall have received a current Appraisal an appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within dated no more than sixty (60) days prior to the release and substitution, showing substitution by an appraised appraiser acceptable to the Rating Agencies or such other evidence of the value of the Substitute Property as shall be satisfactory to Lender in its sole discretion which appraisal or other evidence shall indicate that the value of the Substitute Property is equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Substituted Property determined by Lender at the time of the encumbrance of the Substituted Property by the related Mortgage in connection with the Initial Advance or a Subsequent Advance, as applicable.
(iii) After giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties is not less than the Debt Service Coverage Ratio for the Loan for all of the Properties as of the Outside Closing Date and Date.
(Biv) The Net Operating Income for the appraised value of Substitute Property does not show a downward trend over the Release Property three (3) years immediately prior to the date of substitution or, with respect to a Substitute Property for which information regarding the proposed Net Operating Income of such Substitute Property for the three (3) years immediately prior to the date of substitution cannot be obtained by Borrower after Borrower's exercise of diligent efforts, the Net Operating Income shall not show a downward trend for such period of time immediately prior to the date of substitution as may be determined from the information regarding such Net Operating Income available.
(v) The Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the Substitute Property is equal to or greater than the Net Operating Income and Debt Service Coverage Ratio (for the twelve (12) month period immediately preceding the substitution) for the related Substituted Property. For purposes of this clause (v), the Debt Service Coverage Ratio with respect to a Substitute Property or a Substituted Property shall be calculated using the Net Operating Income with respect to such Substitute Property or the Substituted Property, as applicable, and the principal and interest due and payable on the Note with respect to the related Pro rata Substitute Release Amount or Pro rata Release Amount, as applicable.
(vi) Lender shall have received evidence in writing from the Rating Agencies to the effect that such substitution will not result in a withdrawal, qualification or downgrade of the respective ratings in effect immediately prior to such substitution for the Securities issued in connection with the Securitization that are then outstanding.
(vii) No Default or Event of Default shall have occurred and be continuing and Borrower shall be in compliance in all material respects with all terms and conditions set forth in this Agreement and in each Loan Document on Borrower's part to be observed or performed. Lender shall have received a certificate from Borrower confirming the foregoing, stating that the representations and warranties of Borrower contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of the substitution with respect to Borrower, the Properties and the Substitute Property and containing any other representations and warranties with respect to Borrower, the Properties, the Substitute Property or the Loan as the Rating Agencies may require, unless such certificate would be inaccurate, such certificate to be in form and substance satisfactory to the Rating Agencies. Notwithstanding the foregoing, Borrower may obtain the release of the Lien of a Mortgage encumbering an Individual Property affected by a Non-Curable Property Default and substitute therefor a Substitute Property pursuant to the terms and provisions of this Section 2.7 if (A) such Non- ----------- Curable Property Default is the only Event of Default then existing under the Loan Documents, (B) all other conditions contained in this Section 2.7 are satisfied in connection with ----------- such release and substitution and (C) after giving effect to such release and substitution, no Event of Default shall exist.
(viii) Borrower shall have executed, acknowledged and delivered to Lender (A) a Mortgage, an Assignment of Leases and two XXX-
(ix) Lender shall have received (A) any "tie-in" or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the date of the substitution available with respect to the Title Insurance Policy insuring the Lien of the Mortgage with respect to the Substitute Property and (B) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the Lien of the Mortgage encumbering the Substitute Property, issued by the title company that issued the Title Insurance Policies insuring the Lien of the existing Mortgages and dated as of the date of the substitution, with reinsurance and direct access agreements that replace such agreements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property. The Title Insurance Policy issued with respect to the Substitute Property shall (1) provide coverage in the amount of the Substitute Release Amount if the "tie-in" or similar endorsement described above is available or, if such endorsement is not available, in an amount equal to one hundred twenty-five percent (125%) of the Substitute Release Amount, (2) insure Lender that the relevant Mortgage creates a valid first lien on the Substitute Property encumbered thereby, free and clear of all exceptions from coverage other than Permitted Encumbrances and standard exceptions and exclusions from coverage (as modified by the terms of any endorsements), (3) contain such endorsements and affirmative coverages as are contained in the Title Insurance Policies insuring the Liens of the existing Mortgages, and (4) name Lender as the insured. Lender also shall have received copies of paid receipts showing that all premiums in respect of such endorsements and Title Insurance Policies have been paid.
Appears in 1 contract
Substitution of Properties. Subject (a) During the Term, the Tenant shall have the right, with the prior written consent of the Landlord (not to be unreasonably withheld or delayed) and the Agent (in accordance with Section 9.06(a)(vii) of the Reimbursement Agreement), and on the terms and conditions set forth in this Section 4.4, and subject to the limitations set forth in paragraph (d) of this Section 4.4, to substitute a Substitute Property for any Individual Property which is subject to the terms of this Section 2.6 after Lease at the expiration time of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfied:
(a) Borrower shall not have the right to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Datesubstitution.
(b) Lender As a condition precedent to the effectiveness of any substitution of a Substitute Property for an Individual Property, the Tenant shall deliver to the Landlord, the Agent and the Trustee:
(i) A certificate from an independent certified public accountant reasonably acceptable to the Landlord and the Agent stating that the consummation of such substitution will not have received at least thirty a material adverse effect on the treatment or status of this Lease for tax purposes;
(30ii) days prior written notice requesting A certificate, signed by an Authorized Representative of the substitution and identifying Tenant, stating that the fair market value of the Substitute Property on and Release as of the effective date of the substitution is greater than or equal to the fair market value of the Individual Property being replaced thereby (as determined by the appraisal delivered to the Landlord and the Agent pursuant to Section 6(b) of the Agency and Development Agreement and as confirmed pursuant to Section 7(e)(v) of the Agency and Development Agreement), accompanied by an appraisal of the Substitute Property, prepared (in accordance with FIRREA and all other regulatory requirements applicable to the Agent) and certified by an independent MAI appraiser acceptable to the Landlord and the Agent, setting forth the estimated fair market value of the Substitute Property on and as of the effective date of such substitution (on an "as-completed" basis);
(A) All of the documents and other items required to be delivered by the Tenant as a condition to each Land Acquisition Disbursement pursuant to Section 7(c) of the Agency and Development Agreement as if the Tenant were requesting a Land Acquisition Disbursement with respect to the Substitute Property, and (B) all of the documents and other items required to be delivered by the Tenant as a condition to each Final Disbursement pursuant to Section 7(e) of the Agency and Development Agreement as if the Tenant were requesting a Final Disbursement with respect to the Substitute Property; and
(iv) An opinion of counsel reasonably acceptable to the Landlord and the Agent stating that the substitution of the Substitute Property for the Individual Property being replaced qualifies as a tax-free like kind exchange pursuant to Section 1031 of the Internal Revenue Code, and that such substitution will have no adverse tax consequences for the Landlord.
(c) If On the Borrower continues to own an Individual Property subject to effective date of the Lien of a Security Instrument, Lender shall have received substitution:
(i) The Landlord shall acquire, and the Tenant shall convey, the Substitute Property in the same manner as if such Substitute Property were acquired by the Landlord prior to the Final Project Completion Date;
(ii) The Landlord and the Tenant shall enter into a copy of a deed conveying all of Borrower's right, title and Lease Supplement with respect to the Substitute Property;
(iii) The Landlord shall convey its interest in and to the Release Individual Property being replaced by the Substitute Property to a Person other than Borrower or Principal pursuant the Tenant; and
(iv) The Landlord shall execute and deliver to the Agent an arms length transaction Applicable Mortgage and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt an Applicable Assignment of such deed and agreeing Rents with respect to record such deed in the real estate records for the county in which the Release Property is locatedSubstitute Property.
(d) Lender Notwithstanding anything to the contrary contained in this Section 4.4, the Tenant shall have received a current Appraisal of no right to substitute more than two (i2) the Substitute Property and Properties during any five (ii5) the Release Property, each prepared within sixty (60) days prior to the release and substitution, showing an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property as of the Closing Date and (B) the appraised value of the Release Property immediately prior to the date of the proposed substitutionyear period.
Appears in 1 contract
Samples: Master Lease (Helmstar Group Inc)
Substitution of Properties. Subject Provided that no Event of Default has occurred -------------------------- and is continuing, Borrower shall have the right to obtain a release of one or more of the Properties from the lien of the related Security Instrument and Loan Documents (a "Substitution Release") upon substitution of another fully licensed and operating hospitality property of comparable type and quality as the Property being released in the place of the Release Premises (a "Substitute Property") owned in fee simple (or leasehold) by a Borrower and leased to the Operating Tenant pursuant to an operating lease, substantially in the same form and content as the Operating Lease, and such Substitute Property is subjected to the lien of a new mortgage, deed of trust, deed to secure debt or similar security instruments, in the same form and substance as the Security Instruments ("Substitute Security Instrument") and to the lien of the Loan Documents, as a first lien thereon and managed by Manager (or an affiliate of Manager as provided for in the Management Agreement) pursuant to the terms of the Management Agreement or a Replacement Management Agreement (as defined in the Security Instruments) and, subject to a Franchise Agreement in compliance with the terms and conditions of Section 3.13 of the Security Instruments and upon compliance with and subject to the conditions set forth in this Section 2.6 after the expiration 4; provided, however, that Borrower's rights to such release and substitution shall be conditioned on receipt by Lender of the Lockout Period, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release Property") by substituting therefor another hotel property of like kind and quality acquired by Borrower (individually, a "Substitute Property" and collectively, the "Substitute Properties"), provided that the following conditions precedent are satisfiedfollowing:
(a) Borrower shall not have the right evidence which would be satisfactory to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject a prudent institutional mortgage lender that title to the Lien of the Security Instruments as of the Closing DateRelease Property has been transferred to a Release Premises Transferee.
(b) Lender shall have received at least thirty (30) days prior written notice requesting the substitution and identifying evidence which would be satisfactory to a prudent institutional mortgage lender that the Substitute Property is fully operational and is of similar or higher quality or value to the Release PropertyPremises.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender shall have received (i) a copy of a deed conveying all of Borrower's right, title and interest in and to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located.
(d) Lender shall have received a current Appraisal of (i) the Substitute Property and (ii) the Release Property, each prepared within sixty one hundred eighty (60180) days prior to the release and substitution, substitution showing (1) an appraised value of the Substitute Property equal to or greater than one hundred percent (100%) of (A) the appraised value of the Release Property Premises as of the Closing Date date hereof; and (2) an aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Security Instruments after the Substitution Release not greater than the ratio equal to the lesser of (A) the aggregate loan-to-value ratio as of the date hereof with respect to the Properties as set forth on Schedule B attached and (B) the appraised aggregate loan-to-value ratio with respect to the Properties remaining subject to the lien of the Release Property Security Instruments immediately prior to the proposed Substitution Release.
(d) an opinion of the related Borrower's counsel which would be satisfactory to a prudent institutional mortgage lender stating that (i) the Substitute Security Instrument and the Loan Documents by which the Substitute Property will be encumbered have been duly authorized, executed and delivered by such Borrower and are valid and enforceable in accordance with their terms, subject to bankruptcy and equitable principles, (ii) the related Borrower and Operating Tenant are qualified to do business and in good standing under the laws of the jurisdiction where the Substitute Property is located, or that such Borrower, are not required by Applicable Law (defined in the Security Instruments) to qualify to do business in such jurisdiction, and (iii) based solely on a certificate of the related Borrower the encumbrance of the Substitute Property with the lien of the Substitute Security Instrument and the Loan Documents shall not cause a breach of, or a default under any agreement, document or instrument to which such Borrower is a party or to which it or its properties are bound or affected.
(e) a certification by the related Borrower that (x) the certificates, opinions and other instruments which have been or are therewith delivered to or deposited with Lender in connection with such release and substitution conform to the requirements of this Agreement and the Security Instruments, (y) all conditions precedent herein have been complied with and (z) all conditions precedent to the delivery of the Substitute Security Instrument and Loan Documents contained in this Agreement have been fulfilled.
(f) original executed counterparts of the Substitute Security Instrument and the Loan Documents encumbering the Substitute Property and the related operating lease and related collateral, including without limitation, any financing statements or other documents necessary to grant or perfect Lender's first priority security interest in the Personal Property (defined in the Security Instruments) located thereon and the Rents and Accounts Receivable derived therefrom; the principal amount of such Substitute Security Instrument shall equal the face amount of the Note, provided that in the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording intangibles or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, the principal amount of such Substitute Security Instrument shall equal 125% of the Substitute Allocated Loan Amount (defined below).
(g) a title insurance policy issued by a title insurance company satisfactory to the Rating Agencies (or, if a Securitization has not occurred, to Lender) insuring the lien of the Substitute Security Instrument on the Substitute Property(ies), in form and substance which would be satisfactory to a prudent institutional mortgage lender insuring that the Substitute Security Instrument is a valid and enforceable first lien on the good and marketable fee simple or leasehold estate, title of the related Borrower to the Substitute Property in an amount equal to the amount of the Loan allocated to the Substitute Property (the "Substitute Allocated Loan Amount"), subject only to standard and customary exceptions and such other exceptions that would be approved by a prudent institutional mortgage lender, together with such affirmative insurance and other endorsements customarily required by a prudent institutional mortgage lender, including a "tie-in" and first loss endorsement satisfactory to Lender, or, if such endorsement is not available in the state in which the Substitute Property is located, insurance in an amount equal to the greater of one hundred twenty five percent (125%) of the Substitute Allocated Loan Amount or the amount on which mortgage or intangibles tax was paid with respect to the Security Instrument for the Substitute Property, together with a "last dollar endorsement". Such title insurance policy shall not contain any exception for any state of facts that an accurate survey might show or that a survey made after the date of the proposed substitutionsurvey referred to in Section 4(l) might show.
(h) If the Operating Lease for the Release Premises has been terminated pursuant to Section 36.1 of the Operating Lease, and, after giving effect to such Release, the Release Premises Transferor is the owner of a Property that remains encumbered by the lien of the Security Instruments, an estoppel certificate from the Operating Tenant in form satisfactory to Lender stating that the Operating Lease has been terminated and that the Operating Tenant has released the Release Premises Transferor from all liability for the payment of any and all termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease or, if the Operating Lease on the Release Premises has not been terminated, an estoppel certificate from the Operating Tenant in form satisfactory to Lender that such Operating Lease, as it relates to the Release Premises, is and will remain in full force and effect following the Substitution Release and that the Release Premises Transferor has no liability for the payment of any termination payments or any other payments due to the Operating Tenant pursuant to the terms of the Operating Lease and that the Release Premises Transferor has no further liability or obligation in connection with said Operating Lease.
(i) evidence which would be satisfactory to a prudent institutional mortgage lender to the effect that the Substitute Property and the use thereof are in substantial compliance with the applicable zoning, subdivision, and all other applicable federal, state or local laws and ordinances affecting the Substitute Property, and that all material building and operating licenses and permits necessary for the use and occupancy of the Substitute Property as a hospitality property or hotel including, but not limited to, current certificates of occupancy, have been obtained and are in full force and effect.
(j) an environmental report dated within six (6) months prior to delivery which states that the Substitute Property does not contain any Hazardous Substances in violation of Applicable Law (as defined in the Security Instruments) or material risk of contamination from off-site Hazardous Substances.
(k) payment of all costs and expenses incurred by Lender including reasonable counsel fees and disbursements in connection with the release of any Release Premises and the inclusion of the Substitute Property as collateral, all recording charges, filing fees, taxes, or other expenses, including but not limited to intangibles taxes and documentary stamp taxes in connection with the recording of the Substitute Security Instruments and the lien necessary to grant and perfect Lender a first priority lien on and security interest in the Substitute Property, the Personal Property located therein and the Rents derived therefrom. In the event that the jurisdiction in which the Substitute Property is located imposes a mortgage recording or intangibles tax, or similar tax, and does not permit the allocation of indebtedness for the purpose of determining the amount of such tax payable, if permitted by applicable law in such jurisdiction, such tax shall be paid on an amount equal to 125% of the Substitute Allocated Loan Amount.
(l) a recent survey of the Substitute Property(ies) prepared by a land surveyor licensed in the state where the Substitute Property is located pursuant to the then current American Land Title Association/American Congress of Surveying and Mapping standards for title surveys and which would be otherwise satisfactory to a prudent institutional mortgage lender, provided that no structural additions to the improvements shown on such survey or new structures have been made or built since the date of such survey and that there has been no change in the legal description of the Substitute Property since the date of such survey, whether due to sales, transfers, condemnation or otherwise.
(m) evidence indicating whether the Substitute Property is located within a flood plain.
(n) a property inspection report dated within six (6) months of delivery prepared by an independent licensed engineer approved by Lender, prepared in accordance with standards employed by prudent institutional mortgage lenders stating, among other things, that the Substitute Property is in good condition and repair and free of material damage or waste and complies in all material respects with the Americans with Disabilities Act, or which otherwise reveals a state of fact that would be satisfactory to a prudent institutional mortgage lender and provided that adequate reserves satisfactory to Lender and the Rating Agencies are established.
(o) annual operating statements and occupancy statements for the Substitute Property for the recent fiscal year of the owner thereof, together with a year to date operating statement, current occupancy statements, and a budget for the current fiscal year, each certified by the related Borrower, and a certificate of no adverse change since the date thereof executed by the related Borrower, in each case in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(p) original certificates and copies of policies of insurance required by Lender under the terms of the Substitute Security Instrument for the Substitute Property.
(q) evidence of the qualification and good standing of the related Borrower and Operating Tenant (and the principals, if necessary) in the state where the Substitute Property is located unless such qualification is not required in such state by Applicable Law.
(r) certified copies of all Leases (as defined in the Substitute Security Instrument) with respect to the Substitute Property and tenant estoppel certificates from tenants under Material Leases, as required by Lender, all in a form and substance which would be satisfactory to a prudent institutional mortgage lender.
(s) certified copies of all material contracts and agreements relating to the management, leasing and operation of the Substitute Property, including, without limitation, the Franchise
Appears in 1 contract
Substitution of Properties. Subject to the terms and conditions set forth in this Section 2.19, Borrower shall have the right, only after the earlier of the date the entire Loan has been included in a Securitization (including each and every Note) or January 1, 2007, on one or more occasions, to obtain the release of one or more individual Mortgaged Property from the lien of the Mortgage and the Loan Documents (for purposes of this Section 2.6 after the expiration of the Lockout Periodsection only, Borrower may obtain a release of the Lien of a Security Instrument (and the related Loan Documents) encumbering an Individual Property (a "Release hereinafter referred to as, “Substituted Property"”) by substituting therefor another hotel property its fee interest in one or more manufactured housing communities located in the United States and of like kind and quality (which shall include, among other things, the geographic diversity of the Substituted Property vis-à-vis the other Properties) acquired by Borrower (individually, a "Substitute “Replacement Property" ” and collectively, the "Substitute “Replacement Properties"”). In addition, provided that any such substitution shall be subject, in each case, to the satisfaction of the following conditions precedent are satisfiedprecedent:
(a) Borrower No Event of Default shall not have occurred and be continuing and Lender shall have received a certificate from the right Borrowers, in form and substance acceptable to release and substitute (i) more than one (1) Individual Property in accordance with this Section in any twelve (12) month period and (ii) any Properties after such time as Borrower has released and substituted Properties which in Lender, confirming the aggregate had an appraised value of more than thirty-five percent (35%) of the aggregate appraised values of the Properties subject to the Lien of the Security Instruments as of the Closing Dateforegoing.
(b) Lender The Borrowers shall have received given Lender at least thirty sixty (3060) days prior written notice requesting of its election to substitute the substitution and identifying the Substitute Property and Release Substituted Property.
(c) If the Borrower continues to own an Individual Property subject to the Lien of a Security Instrument, Lender The Borrowers shall have received (i) paid to Lender a copy of a deed conveying all of Borrower's right, title and interest processing fee in and an amount equal to the Release Property to a Person other than Borrower or Principal pursuant to an arms length transaction and (ii) a letter from Borrower countersigned by a title insurance company acknowledging receipt of such deed and agreeing to record such deed in the real estate records for the county in which the Release Property is located$10,000.
(d) Lender shall have received Appraisals (from a current Appraisal of (istate certified appraiser engaged by Lender) that satisfy the Substitute Prudent Lender Standard for the Replacement Property and the Substituted Property dated no more than forty-five (ii) the Release Property, each prepared within sixty (6045) days prior to the substitution, indicating that the fair market value of the Replacement Property equals or exceeds the greater of the fair market value of the Substituted Property based upon such appraisal and the fair market value of the Substituted Property based on the appraisal prepared and delivered in connection with the closing of the Loan.
(e) The Underwritten Net Cash Flow for the Replacement Property immediately preceding the substitution must be equal or greater than the Underwritten Net Cash Flow of the Substituted Property as determined in accordance with the Prudent Lender Standard.
(f) The Debt Service Coverage Test is satisfied.
(g) Lender shall have received a Phase I environmental report and, if recommended under the Phase I environmental report, a Phase II environmental report from an Independent environmental consultant approved by Lender in accordance with the Prudent Lender Standard dated not more than forty-five (45) days prior to such release and substitution, showing which conclude that the Replacement Property does not contain any Hazardous Materials in violation of Environmental Laws, is not subject to any risk of contamination from any off-site Hazardous Materials, and is not in violation of any Environmental Laws.
(h) Lender shall have received a physical conditions report with respect to the Replacement Property from an appraised value independent architect or engineer approved by Lender in accordance with the Prudent Lender Standard in form and substance acceptable to Lender in accordance with the Prudent Lender Standard, dated not more than forty-five (45) days prior to such release and substitution, stating that the Replacement Property is in good condition and repair and free of material damage or waste. If the physical conditions report recommends that any material repairs be made with respect to the Replacement Property, Lender may condition (in accordance with the Prudent Lender Standard) its approval of such Replacement Property on the Borrowers depositing into the Replacement Reserve Account an amount equal to one hundred twenty-five percent (125%) of the estimated cost of such repairs.
(i) Lender shall have received annual operating statements and occupancy statements for the Replacement Property for the three (3) most recently completed Fiscal Years (or, if the Replacement Property has been acquired by Borrower or an Affiliate thereof within 12 months of the proposed date of the substitution, the most recent Fiscal Year) and a current operating statement for the Substituted Property. Each of the statements required under this clause (i) shall be certified to Lender as being true and correct in all material respects to the knowledge of the Borrower and accompanied by a certificate from the applicable Borrower certifying that there has been no adverse change in the financial condition of the Replacement Property since the date of such operating statements.
(j) Borrower shall have executed, acknowledged and delivered to Lender (i) a Mortgage, an Assignment of Rents and Leases and financing statements with respect to the Replacement Property, (ii) an Environmental Indemnity Agreement with respect to the Replacement Property, (iii) written confirmation from each Guarantor regarding such substitution, (iv) modifications to the Loan Documents as Lender deems necessary or desirable in accordance with the Prudent Lender Standard to properly reflect the substitution and (vi) such other documents and agreements as may be reasonably requested by Lender in accordance with the Prudent Lender Standard to evidence the substitution. The Mortgage, Assignment of Rents and Leases, financing statements and Environmental Indemnity Agreement with respect to the Replacement Property shall be the same in form and substance as the counterparts of such documents executed and delivered with respect to the Substituted Property on the date hereof. The Mortgage encumbering the Replacement Property shall be cross-defaulted and cross-collateralized with the other Mortgages encumbering the other Properties and shall secure all amounts evidenced by the Note. The amount of the Loan allocated to the Replacement Property (such amount being hereinafter referred to as the “Substitute Allocated Loan Amount”) shall equal the Allocated Loan Amount of the Substituted Property.
(k) Lender shall have received (i) a “tie-in” or similar endorsement to each Title Insurance Policy insuring the lien of the other Mortgages as of the date of the substitution with respect to the Title Insurance Policy insuring the lien of the Mortgage on the Replacement Property to the extent available, and (ii) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring the lien of the Mortgage on the Replacement Property, issued by the title company that issued the Title Insurance Policies insuring the liens of the other Mortgages encumbering the other Properties and dated as of the date of the substitution. The Title Insurance Policy issued with respect to the Replacement Property shall (i) provide coverage in the amount of the Substitute Property Allocated Loan Amount if the “tie-in” or similar endorsement described above is available or, if such endorsement is not available, in an amount equal to one hundred twenty-five percent (125%) of the Substitute Allocated Loan Amount of the Replacement Property (or greater a lesser percentage that satisfies the Prudent Lender Standard but is not less than one hundred ten percent (100110%) of (A) the appraised value Substitute Allocated Loan Amount of the Release Property Replacement Property), (ii) insure Lender that the Mortgage creates a valid first lien on the Replacement Property, free and clear of all exceptions from coverage other than Permitted Encumbrances determined in accordance with the Prudent Lender Standard, (iii) contain such endorsements and affirmative coverages as are contained in each Title Policy insuring the lien of the Closing Date existing Mortgages and (Biv) name Lender as the appraised value insured.
(l) Lender shall have received a current survey for the Replacement Property, certified to the title company providing such Title Insurance Policy and Lender and its successors and assigns pursuant to Lender’s standard form of certification prepared in accordance with the Prudent Lender Standard, prepared by a professional land surveyor licensed in the state in which the Replacement Property is located and acceptable to Lender in accordance with the minimum standard detail requirements as most recently adopted by ALTA/ACSM and the Prudent Lender Standard. Said survey shall show no state of facts or conditions reasonably objectionable to Lender in accordance with the Prudent Lender Standard.
(m) Lender shall have received valid certificates of insurance evidencing the insurance coverages required to be maintained hereunder with respect to the Replacement Property, together with endorsements reasonably satisfactory to Lender in accordance with the Prudent Lender Standard and naming Lender as an additional insured and loss payee as required by Lender in accordance with the Prudent Lender Standard under such policies.
(n) The Borrowers shall deliver or cause to be delivered to Lender (i) updates certified by the Borrowers of all organizational documentation related to the Borrowers and/or the formation, structure, existence, good standing and/or qualification to do business delivered to Lender in connection with the closing date; (ii) good standing certificates, certificates of qualification to do business in the state in which the Replacement Property is located (if required in such state) and (iii) if applicable, resolutions of the Release General Partner authorizing the substitution and any actions taken in connection with such substitution.
(o) Lender shall have received the following opinions of Borrowers’ counsel, all of which shall be in form and substance and delivered by counsel reasonably acceptable to Lender in accordance with the Prudent Lender Standard: (i) an opinion of counsel in the state in which the Replacement Property immediately is located as to the enforceability of the Mortgage and Assignment of Rents and Leases delivered with respect to the Replacement Property and such other matters as Lender may reasonably request; (ii) an opinion of counsel with respect to the enforceability of the other Loan Documents delivered with respect to the Replacement Property and any modifications to the existing Loan Documents and such other matters as Lender may reasonably request; (iii) an opinion of counsel stating that the substitution does not constitute a “significant modification” of the Loan or “deemed exchange” of the Note under Section 1001 of the Code or otherwise cause any “real estate mortgage investment conduit” within the meaning of Section 860D of the Code (“REMIC”) to fail to maintain its status as a REMIC as a result of such substitution and (iv) such other opinions as Lender may reasonably request in accordance with the Prudent Lender Standard.
(p) Lender shall have received a current rent roll of the Replacement Property certified by Borrower as being true and correct.
(q) Lender shall have received and approved in accordance with the Prudent Lender Standard the Management Agreement and Manager relating to the Replacement Property or evidence reasonably acceptable to Lender in accordance with the Prudent Lender Standard that the Replacement Property is included under the existing Management Agreement.
(r) Lender shall have received certified copies of all material contracts and agreements relating to the leasing and operation of the Replacement Property.
(s) Lender shall have received such other and further approvals, opinions, documents and information in connection with the substitution as Lender may have reasonably requested in accordance with the Prudent Lender Standard.
(t) Lender shall have received Rating Confirmations from each of the Rating Agencies.
(u) The Borrowers shall have paid or reimbursed Lender for all third party out-of-pocket costs and expenses incurred by Lender (including, without limitation, reasonable attorneys fees and disbursements) in connection with the substitution and the Borrowers shall have paid all fees and expenses of the Rating Agencies, recording charges, filing fees, taxes or other expenses (including, without limitation, mortgage and intangibles taxes and documentary stamp taxes) payable in connection with the substitution.
(v) The applicable Borrower shall submit to Lender, not less than ten (10) days prior to the date of such Substitution, a release of lien and all other required documents for the proposed Substituted Property for execution by Lender which is in a form appropriate for the jurisdiction in which the Substituted Property is located.
(w) On or prior to the date of substitution, the Borrowers shall deliver an Officer’s Certificate dated as of the date of substitution certifying that the requirements set forth in this Section 2.19 have been satisfied, together with detailed backup for all required calculations, all of which shall be satisfactory to Lender in accordance with the Prudent Lender Standard. Upon the satisfaction of the foregoing conditions precedent, as reasonably determined by Lender in accordance with the Prudent Lender Standard, Lender will release its lien from the Substituted Property and the Replacement Property shall be deemed to be the applicable Mortgaged Property for purposes of the Mortgages and the Allocated Loan Amount with respect to the Substituted Property shall be deemed to be the Allocated Loan Amount with respect to the Replacement Property for all purposes hereunder. Notwithstanding anything to the contrary contained herein, the parties hereto hereby acknowledge and agree that after all or any portion of the Loan has been included in a Securitization, with respect to any Lender approval or similar discretionary rights over any matters contained in this Section (any such matter, a “Lender Approval Item”), such rights shall be construed such that Lender shall only be permitted to withhold its consent or approval with respect to any Lender Approval Item if the same fails to meet the Prudent Lender Standard. Notwithstanding the foregoing, during the term of the Loan the Borrowers may not substitute Replacement Properties for any Mortgaged Property or Mortgaged Properties the aggregate initial Allocated Loan Amount(s) of which individually, or in the aggregate, exceed 75% of the Principal Indebtedness on the Closing Date.
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Samples: Loan Agreement (Affordable Residential Communities Inc)