Conditions to Substitution. The Servicer shall not permit any substitution under Section 2.7(a) on any Addition Date: (i) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto; (ii) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto; (iii) unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replaced; (iv) if after giving effect to all proposed substitutions to be made on such Addition Date, the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutions; (v) if an Insolvency Event has occurred with respect to the Transferor or the Servicer or a Servicer Default has occurred and is continuing.
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Sources: Pooling and Servicing Agreement and Indenture of Trust (PLM International Inc), Pooling and Servicing Agreement and Indenture of Trust (American Finance Group Inc /De/)
Conditions to Substitution. The Servicer Borrower has the right, from time to time, to substitute any Aircraft (such Aircraft, an “Existing Aircraft”) with a Permitted Substitute Aircraft, provided that, subject to Clause 6.5 (Deferral of Conditions), the Agent is satisfied, acting reasonably that the following conditions have been met:
(a) the Agent has received such evidence as it may reasonably require to evidence that the proposed substitute aircraft is a Permitted Substitute Aircraft;
(b) on the Substitution Date no Relevant Default has occurred and is continuing and the substitution would not result in the occurrence of a Relevant Default;
(c) no Concentration Limit Event would result from the proposed substitution or, if a Concentration Limit Event is already continuing, such substitution would remedy or mitigate the severity of such Concentration Limit Event;
(d) if such Permitted Substitute Aircraft is to be subject to a Part II Airline Portfolio Lease (i) such Permitted Substitute Aircraft must be a Permitted Narrow-body Aircraft and (ii) no Part II Airline Event would result from the proposed Utilisation or if a Part II Airline Event is continuing such Utilisation would remedy or mitigate the severity of such Part II Airline Event;
(e) the total amount of the Secured Obligations, as a proportion of the aggregate appraised value of all of the Aircraft (each calculated on the same basis except, respectively, excluding due, payable and owing principal and due, payable and owing interest in respect of the Existing Aircraft and excluding the Existing Aircraft) (the “LTV”) will be no higher immediately after completion of the substitution than the LTV immediately before completion of the substitution (the “Substitution LTV Condition”), provided that the Borrower shall be entitled to prepay the Loan in respect of the Existing Aircraft in part (together with Break Costs and/or Swap Breakage Loss but no Prepayment Fee will be payable in connection with such prepayment) in accordance with the provisions of Clause 8.2 (Voluntary prepayment of Loan)) in the amount necessary (and no more than such amount) in order to comply with the Substitution LTV Condition. In order to calculate the LTV and in order to establish whether the Substitution LTV Condition is satisfied or not, the Borrower shall (reasonably in advance of the Substitution Date) obtain and make available to the Agent, ASCEND Valuations in respect of all the Aircraft in respect of which Secured Obligations remain outstanding and the proposed Permitted Substitute Aircraft calculated no earlier than the date falling thirty (30) days prior to the Substitution Date (and the ASCEND Valuation Letter shall not permit any be dated earlier than such date);
(f) if a substitution under Section 2.7(aof an Existing Aircraft takes place within thirty six (36) months of the Utilisation Date of the Loan attributable to such Existing Aircraft, the Borrower shall provide to the Agent a certificate, substantially in the form set out in Schedule 16 (Form of [Substitution/Final Disposition] Certificate) and signed by an officer of the Borrower, certifying the matters set out therein;
(g) the Agent will be satisfied that on any Addition each remaining Repayment Date following the Substitution Date, the aggregate of:
(i) if each amount of “Basic Rent” (howsoever defined) due and payable to the sum of Lessors pursuant to the Discounted Lease Balances (as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unlessPortfolio Leases, in either case, each case during the Rating Agency Condition shall have been satisfied with respect thereto;Interest Period for the Loan attributable to each such Portfolio Lease which immediately precedes such Repayment Date; and
(ii) if the sum of scheduled payments due and payable to the Discounted Lease Balances (as of Borrower pursuant to the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of Hedging Agreements required to be entered into pursuant to, and complying with, the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unlessHedging Principles, in either case, each case during the Rating Agency Condition shall have been satisfied with respect thereto;Interest Period for the Loan attributable to each such Hedging Agreement which immediately precedes such Repayment Date; will be equal to or greater than:
(iii) unless as 105% of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than aggregate scheduled payments of principal and interest due and payable under this Agreement on such Repayment Date pursuant to the Discounted Lease Balance Repayment Schedules for all of the Loans, provided that for the purposes of this calculation:
(A) if the date of any such Repayment Date is the first Repayment Date or the Final Repayment Date in respect of a Loan, then such Loan, any Hedging Agreements entered into in respect of such Loan and the Portfolio Lease being replacedfor the Aircraft attributable to such Loan, together with any amounts payable thereunder, will be disregarded;
(ivB) if after giving effect the date of any such Repayment Date is not also a Repayment Date under the Loan attributable to all a Quarterly Rent Aircraft, then such Loan, any Hedging Agreements entered into in respect of such Loan and the Portfolio Lease attributable to such Quarterly Rent Aircraft, together with any amounts payable thereunder, will be disregarded; and
(C) the Fixed Rate and the Floating Rate as well as the fixed and floating rate of interest applicable to the calculation of “Basic Rent” pursuant to each Portfolio Lease shall be the applicable Notional Rate. In the event that the Borrower is not able to satisfy this condition, the Borrower shall be entitled to exercise its rights in accordance with Clause 8.7 (Scheduled Debt to Basic Rent Test Ratios).
(h) if the Portfolio Lease relating to the Existing Aircraft is:
(i) a Fixed Rate Lease and the Portfolio Lease in respect of the proposed substitutions Permitted Substitute Aircraft is a Floating Rate Lease, any Notional Swap in respect of a Fixed Rate Loan attributable to such Fixed Rate Lease will be deemed to be made terminated in whole on such Addition the Substitution Date, the sum Borrower has paid to the Lenders any Swap Breakage Loss payable pursuant to sub-clause 16.4.4 in respect of such deemed termination; and
(ii) a Floating Rate Lease and the Portfolio Lease in respect of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than proposed Permitted Substitute Aircraft is a Fixed Rate Lease, then either
(A) the sum of all Scheduled Principal Payments on Borrower and the Included Leases in each such Monthly Period before giving effect Agent will have established the Fixed Rate for the Loan attributable to such proposed substitutionsExisting Aircraft in accordance with Clause 9.3 (Establishment of Fixed Rate); or
(B) if the Borrower did not accept the quote and the “fixed rate” in accordance with Clause 9.3.2, the Borrower will have complied with the Hedging Principles;
(vi) if:
(i) immediately prior to the Substitution Date, the Existing Aircraft was a Quarterly Rent Aircraft, and immediately after the Substitution Date, the Permitted Substitute Aircraft will not be a Quarterly Rent Aircraft; or
(ii) immediately prior to the Substitution Date, the Existing Aircraft was not a Quarterly Rent Aircraft, and immediately after the Substitution Date, the Permitted Substitute Aircraft will be a Quarterly Rent Aircraft, then if the Portfolio Lease attributable to the Existing Aircraft and the Portfolio Lease attributable to the Permitted Substitute Aircraft are each, as at the Substitution Date, Fixed Rate Leases, then any Notional Swap in respect of the Loan attributable to such Existing Aircraft will be deemed to be terminated in whole on the Substitution Date, the Borrower will have paid to the Lenders any Swap Breakage Loss payable pursuant to sub-clause 16.4.4 in respect of such deemed termination, and either:
(x) the Borrower and the Agent will have established the new Fixed Rate for the Loan attributable to such Existing Aircraft in accordance with Clause 9.3 (Establishment of Fixed Rate); or
(xx) if an Insolvency Event the Borrower did not accept the quote and the “fixed rate” in accordance with Clause 9.3.2, the Borrower will have complied with the Hedging Principles; and
(j) All “know your customer” information requested by the Agent on behalf of any Finance Party (which such Finance Party actually requires in connection with, or as a result of, the proposed substitution) has occurred with respect been provided to the Transferor satisfaction of such Finance Party (unless otherwise agreed in writing by such Finance Party);
(k) the Agent has not received advice contrary to the fact that the Permitted Substitute Aircraft is not subject to any existing financing arrangement save for those contemplated by the Transaction Documents;
(l) the Agent will have received payment from the Borrower for the account of the Lenders of the substitution fee of $15,000, which such fee the Agent will distribute between the Lenders on the Substitution Date on a pro-rata basis based on the Lenders’ Commitments as at the Substitution Date; and
(m) the documents and evidence referred to in Part A of Schedule 6 (Aircraft Substitution and Replacement Lease Documents) have been provided by the relevant Obligors on or before the Servicer or a Servicer Default has occurred and is continuingSubstitution Date.
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Conditions to Substitution. The Servicer Borrower has the right, from time to time, to substitute any Aircraft (such Aircraft, an “Existing Aircraft”) with a Permitted Substitute Aircraft, provided that, subject to Clause 6.5 (Deferral of Conditions), the Agent is satisfied, acting reasonably that the following conditions have been met:
(a) the Agent has received such evidence as it may reasonably require to evidence that the proposed substitute aircraft is a Permitted Substitute Aircraft;
(b) on the Substitution Date no Relevant Default has occurred and is continuing and the substitution would not result in the occurrence of a Relevant Default;
(c) no Concentration Limit Event would result from the proposed substitution or, if a Concentration Limit Event is already continuing, such substitution would remedy or mitigate the severity of such Concentration Limit Event;
(d) if such Permitted Substitute Aircraft is to be subject to a Part II Airline Portfolio Lease (i) such Permitted Substitute Aircraft must be a Permitted Narrow-body Aircraft and (ii) no Part II Airline Event would result from the proposed Utilisation or if a Part II Airline Event is continuing such Utilisation would remedy or mitigate the severity of such Part II Airline Event;
(e) the total amount of the Secured Obligations, as a proportion of the aggregate appraised value of all of the Aircraft (each calculated on the same basis except, respectively, excluding due, payable and owing principal and due, payable and owing interest in respect of the Existing Aircraft and excluding the Existing Aircraft) (the “LTV”) will be no higher immediately after completion of the substitution than the LTV immediately before completion of the substitution (the “Substitution LTV Condition”), provided that the Borrower shall be entitled to prepay the Loan in respect of the Existing Aircraft in part (together with Break Costs and/or Swap Breakage Loss but no Prepayment Fee will be payable in connection with such prepayment) in accordance with the provisions of Clause 8.2 (Voluntary prepayment of Loan)) in the amount necessary (and no more than such amount) in order to comply with the Substitution LTV Condition. In order to calculate the LTV and in order to establish whether the Substitution LTV Condition is satisfied or not, the Borrower shall (reasonably in advance of the Substitution Date) obtain and make available to the Agent, ASCEND Valuations in respect of all the Aircraft in respect of which Secured Obligations remain outstanding and the proposed Permitted Substitute Aircraft calculated no earlier than the date falling thirty (30) days prior to the Substitution Date (and the ASCEND Valuation Letter shall not permit any be dated earlier than such date);
(f) if a substitution under Section 2.7(a) on any Addition Dateof an Existing Aircraft takes place within:
(i) if such Existing Aircraft is not the sum Virgin Atlantic Identified Aircraft, thirty six (36) months of the Discounted Lease Balances (as Utilisation Date of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% of the Aggregate Net Pool Balance on the related Cut Off Date for Loan attributable to such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;Existing Aircraft; or
(ii) if such Aircraft is the sum Virgin Atlantic Identified Aircraft, twenty four (24) months of the Discounted Lease Balances (as Utilisation Date of the related Cut Off Loan attributable to the Virgin Atlantic Identified Aircraft, the Borrower shall provide to the Agent a certificate, substantially in the form set out in Schedule 16 (Form of [Substitution/Final Disposition] Certificate) and signed by an officer of the Borrower, certifying the matters set out therein;
(g) the Agent will be satisfied that on each remaining Repayment Date following the Substitution Date, the aggregate of:
(i) each amount of “Basic Rent” (howsoever defined) due and payable to the Lessors during the Interest Period immediately preceding such Repayment Date pursuant to the Portfolio Leases; and
(ii) the scheduled payments due and payable to the Borrower during the Interest Period immediately preceding such Repayment Date pursuant to the Hedging Agreements required to be entered into pursuant to, and complying with, the Hedging Principles, will be equal to or greater than 105% of the aggregate scheduled payments of principal and interest due and payable under this Agreement on such Repayment Date pursuant to the Repayment Schedules for all Substitute Leases on a cumulative basis of the Loans, provided that for the purposes of this calculation:
(A) during if the date of any period such Repayment Date is the first Repayment Date or the Final Repayment Date in respect of twelve consecutive Monthly Periods would exceed 10% a Loan, then such Loan, any Hedging Agreements entered into in respect of such Loan and the Aggregate Net Pool Balance on Portfolio Lease for the related Cut Off Date for Aircraft attributable to such Substitute Leases or Loan, together with any amounts payable thereunder, will be disregarded; and
(B) after the Pay Out Commencement Date would exceed 15% Fixed Rate and the Floating Rate as well as the fixed and floating rate of interest applicable to the calculation of “Basic Rent” pursuant to each Portfolio Lease shall be the applicable Notional Rate. In the event that the Borrower is not able to satisfy this condition, the Borrower shall be entitled to exercise its rights in accordance with Clause 8.7 (Scheduled Debt to Basic Rent Test Ratios).
(h) if the Portfolio Lease relating to the Existing Aircraft is:
(i) a Fixed Rate Lease and the Portfolio Lease in respect of the Aggregate Net Pool Balance as proposed Permitted Substitute Aircraft is a Floating Rate Lease, any Notional Swap in respect of a Fixed Rate Tranche of the Pay Out Commencement applicable Loan attributable to such Fixed Rate Lease will be deemed to be terminated in whole on the Substitution Date, unless, the Borrower has paid to the Lenders any Swap Breakage Loss payable pursuant to sub-clause 16.4.4 in either caserespect of such deemed termination; and
(ii) a Floating Rate Lease and the Portfolio Lease in respect of the proposed Permitted Substitute Aircraft is a Fixed Rate Lease, the Rating Agency Condition shall have been satisfied Borrower has complied with respect theretothe requirements of the Hedging Principles;
(iiii) All “know your customer” information requested by the Agent on behalf of any Finance Party (which such Finance Party actually requires in connection with, or as a result of, the proposed substitution) has been provided to the satisfaction of such Finance Party (unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replacedotherwise agreed in writing by such Finance Party);
(ivj) if after giving effect the Agent has not received advice contrary to all proposed substitutions the fact that the Permitted Substitute Aircraft is not subject to be made on such Addition Date, any existing financing arrangement save for those contemplated by the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutionsTransaction Documents;
(vk) if an Insolvency Event has occurred with respect the Agent will have received payment from the Borrower for the account of the Lenders of the substitution fee of $15,000, which such fee the Agent will distribute between the Lenders on the Substitution Date on a pro-rata basis based on the Lenders’ Commitments as at the Substitution Date; and
(l) the documents and evidence referred to in Part A of Schedule 6 (Aircraft Substitution and Replacement Lease Documents) have been provided by the Transferor relevant Obligors on or before the Servicer or a Servicer Default has occurred and is continuingSubstitution Date.
Appears in 1 contract
Conditions to Substitution. The Servicer Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, subject to the terms and conditions set forth in this Section 2.6.1, a Borrower may, at any time after the first anniversary of the Closing Date, obtain a release of the Lien of the applicable Mortgage and the other Loan Documents encumbering its Property (each, a “Substituted Property”) by substituting therefor another improved parcel of real property of like kind, use, utility and quality that is acquired in fee simple by an Affiliate of such Borrower who is a Qualified Substitute Borrower, which property is in a similar geographical area as the Substituted Property and shall not permit any in no event be part of a vertical subdivision, be subject to a declaration of condominium or other similar type of agreement or be subject to a ground lease (a “Qualified Substitute Property”), provided that each of the following conditions precedent are satisfied (with all due diligence materials enumerated below being received by Lender at least forty-five (45) days prior to the date of substitution under Section 2.7(a) on any Addition (the “Substitution Date:”)): Pool 2
(ia) if the sum Borrowers shall be entitled to substitute (from time to time) no more than fifty percent (50.0%) (by Allocated Loan Amounts) of the Discounted Lease Balances Properties during the Term;
(b) The Substitution Date shall occur prior to the date that is six (6) months prior to the Maturity Date;
(c) Such Borrower shall have submitted to Lender a written request for substitution (each, a “Substitution Request”) at least sixty (60) days prior to the anticipated closing date of such substitution, together with evidence that such Borrower has delivered a copy of such Substitution Request to any mezzanine lender under any Permitted Mezzanine Debt then in effect, which Substitution Request shall state the anticipated closing date of such substitution, shall identify the Qualified Substitute Property, the Substituted Property and the Qualified Substitute Borrower, and shall include an Officer’s Certificate providing a certification that as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% date of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% Substitution Request, no Event of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(ii) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(iii) unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replaced;
(iv) if after giving effect to all proposed substitutions to be made on such Addition Date, the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutions;
(v) if an Insolvency Event has occurred with respect to the Transferor or the Servicer or a Servicer Default has occurred and is continuing.;
(d) At least one (1) Business Day prior to the Substitution Date, Lender shall have received evidence that the Operating Lease relating to the Substituted Property will be terminated on the Substitution Date;
(e) Lender shall have received an appraisal of the Qualified Substitute Property and of the Substituted Property, each acceptable to Lender in all respects, dated no more than sixty (60) days prior to the Substitution Date, by an appraiser doing business in the State where each such property is located with at least five (5) years experience in appraising properties similar to such property and who is acceptable to Lender and, if a Securitization has occurred, the Rating Agencies;
(f) Lender shall have received evidence satisfactory to Lender that the fair market value of the Qualified Substitute Property is stable and is not less than the fair market value of the Substituted Property as of the date immediately preceding the Substitution Date determined based on the appraisals delivered pursuant to clause (e) above;
(g) Lender shall have received evidence satisfactory to Lender that the Loan-to-Value Ratio (determined without taking into account the appraised value of the Substituted Property and including the appraised value of the Qualified Substitute Property) immediately following, and after giving effect to, the substitution shall be no greater than the lesser of (i) the Closing LTV and (ii) the Loan-to-Value Ratio (determined by including the appraised value of the Substituted Property and excluding the appraised value of the Qualified Substitute Property) immediately prior to the Substitution Date;
(h) Lender shall have received evidence satisfactory to Lender that, after giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is not less than the greater of (i) the Closing DSCR and (ii) the Debt Service Coverage Ratio for the Loan for all of the Properties (including the Substituted Property and excluding the Qualified Substitute Property) for the twelve (12) month Pool 2 period immediately preceding the last day of the calendar month immediately preceding the Substitution Date;
(i) Lender shall have received evidence satisfactory to Lender that (A) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is equal to or greater than the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Substituted Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date, (B) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property does not show a downward trend over the three (3) years immediately prior to the Substitution Date, and (C) after giving effect to the substitution, the Net Cash Flow generated from all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) is sufficient to pay all rent payable pursuant to the terms of the Operating Leases relating to such Properties;
(j) If the Loan is part of a Securitization, Lender shall have received a Rating Agency Confirmation from the applicable Rating Agencies with respect to such substitution (or a written waiver from such Rating Agencies indicating that a Rating Agency Confirmation is not required). If the Loan is not part of a Securitization, Lender shall have consented in writing to such substitution, which consent shall not be unreasonably withheld or delayed;
(k) No Event of Default shall have occurred and be continuing at the time of the submission by such Borrower of the Substitution Request or at the time of the closing of such substitution;
(l) Lender shall have received an Officer’s Certificate stating that the representations and warranties of Borrowers contained in this Agreement and the other Loan Documents are true and correct on and as of the Substitution Date with respect to the Qualified Substitute Borrower and the Qualified Substitute Property and that no Event of Default has occurred and is continuing;
(m) Lender shall have received a certified copy of an Operating Lease between such Qualified Substitute Borrower and Operating Lessee, which Operating Lease shall be substantially the same in form and substance as the Operating Lease in effect for the Substituted Property immediately prior to the Substitution Date as approved by Lender, and Operating Lessee shall have executed and delivered to Lender a Security Agreement, a Subordination Agreement and UCC-1 financing statements, each in form and substance substantially the same as the counterpart of such documents executed and delivered with respect to the related Substituted Property (all of which documents shall be covered by the opinion required pursuant to clause (t) below);
(n) The Qualified Substitute Borrower shall have executed, acknowledged and delivered to Lender a Mortgage, an Assignment of Leases and two UCC-1 financing statements with respect to the Qualified Substitute Property, together with a letter from such Qualified Substitute Borrower countersigned by a Title 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 one of the UCC 1 financing statements in the real estate records for the county in which the Qualified 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 such Qualified Substitute Borrower is organized, so as to effectively create upon such recording and filing valid and enforceable perfected first priority Liens upon the Qualified Substitute Property in favor of Lender (or such trustee as may be desired under local law), subject only to the Permitted Encumbrances. All of the Borrowers, the Qualified Substitute Borrower and, where applicable, Operating Lessee and each Guarantor shall have executed, acknowledged and delivered to Lender (i) a Joinder Agreement, (ii) an amended and restated Note, (iii) an amended and restated Environmental Indemnity, modified to include the Qualified Substitute Property and the Qualified Substitute Borrower (on a joint and several basis), and (iv) amendments to each Carveout Guaranty, the Clearing Account Agreement, the Cash Management Agreement and such of the other Loan Documents as Lender may reasonably require to reflect the joinder of the Qualified Substitute Borrower, the release of the Substituted Property and the addition of the Qualified Substitute Property. In addition, Borrowers shall have caused each Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Mortgage, the Assignment of Leases, the UCC-1 financing statements and the Environmental Indemnity referenced above 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 Qualified Substitute Borrower and the Qualified Substitute Property and such modifications reflecting the laws of the state in which the Qualified 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 (t) below. The Mortgage encumbering the Qualified Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Qualified 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 fair market value of the Qualified Substitute Property. The principal amount of the Loan allocated to the Qualified Substitute Property (such amount being hereinafter referred to as the “Substitute Allocated Loan Amount”) shall equal the Allocated Loan Amount of the related Substituted Property;
(o) Lender shall have received (i) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring that such Qualified Substitute Borrower owns a fee simple estate in the entire Qualified Substitute Property and insuring the Lien of the Mortgage encumbering the Qualified Substitute Property, issued by the Title Companies and dated as of the Substitution Date, with reinsurance and direct access agreements or co-insurance endorsements in the same form as such agreements or endorsements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage Pool 2 encumbering the Substituted Property, and (ii) to the extent available, a “tie in” or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the Substitution Date with respect to the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Qualified Substitute Property. The Title Insurance Policy issued with respect to the Qualified Substitute Property shall (A) 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 the least of one hundred twenty-five percent (125%) of the fair market value of the Qualified Substitute Property, one hundred fifty percent (150%) of the Substitute Allocated Loan Amount and the maximum amount (if any) permitted under applicable Legal Requirements in the state where the Qualified Substitute Property is located, (B) insure Lender that the relevant Mortgage creates a valid first lien on the Qualified 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), (C) 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, including insuring that the Qualified Substitute Property constitutes a separate tax lot, and (D) name Lender, its successors and assigns, 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 Policy have been paid;
(p) Lender shall have received a current survey for the Qualified Substitute Property, certified to the Title Companies and Lender and their successors and assigns, in the same form and having the same content as the certification of the survey of the Substituted Property, prepared by a professional land surveyor licensed in the State in which the Qualified Substitute Property is located and acceptable to the Rating Agencies in accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as adopted by ALTA, the American Congress on Surveying & Mapping and the National Society of Professional Surveyors in 1999. Such survey shall reflect the same legal description contained in the Title Insurance Policy relating to the Qualified Substitute Property and shall include, among other things, a metes and bounds description of the real property comprising part of the Qualified 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 such survey and such survey shall certify whether or not the surveyed property is located in a “one-hundred-year flood hazard area”;
(q) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for a Property hereunder have been satisfied with respect to the Qualified Substitute Property and evidence of the payment of all premiums payable for the existing policy period;
(r) Lender shall have received a Phase I environmental report issued and certified by a recognized environmental consultant reasonably acceptable to Lender and in form and substance acceptable to Lender and each Rating Agency and, if recommended under the Phase I environmental report, a Phase II environmental report acceptable to Lender and each Rating Agency, which reports conclude that the Qualified Substitute Property does not contain any hazardous materials, is not subject to any risk of contamination from any off-site hazardous materials and complies in every respect with all environmental laws and that there is no further action or investigation required or recommended with regard to the Qualified Substitute Property;
(s) Such Qualified Substitute Borrower shall have delivered or caused to be delivered to Lender (i) a structure chart for such Qualified Substitute Borrower, (ii) copies of all organizational documentation related to such Qualified Substitute Borrower certified as being complete and correct copies thereof by such Qualified Substitute Borrower, which organizational documentation shall be in form and substance satisfactory to Lender and the Rating Agencies, (iii) certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good standing
Appears in 1 contract
Conditions to Substitution. The Servicer Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, subject to the terms and conditions set forth in this Section 2.6.1, a Borrower may, at any time after the first anniversary of the Closing Date, obtain a release of the Lien of the applicable Mortgage and the other Loan Documents encumbering its Property (each, a “Substituted Property”) by substituting therefor another improved parcel of real property of like kind, use, utility and quality that is acquired in fee simple by an Affiliate of such Borrower who is a Qualified Substitute Borrower, which property is in a similar geographical area as the Substituted Property and shall not permit any in no event be part of a vertical subdivision, be subject to a declaration of condominium or other similar type of agreement or be subject to a ground lease (a “Qualified Substitute Property”), provided that each of the following conditions precedent are satisfied (with all due diligence materials enumerated below being received by Lender at least forty-five (45) days prior to the date of substitution under Section 2.7(a) on any Addition (the “Substitution Date:”)):
(ia) if the sum Borrowers shall be entitled to substitute (from time to time) no more than fifty percent (50.0%) (by Allocated Loan Amounts) of the Discounted Lease Balances Properties during the Term;
(b) The Substitution Date shall occur prior to the date that is six (6) months prior to the Maturity Date;
(c) Such Borrower shall have submitted to Lender a written request for substitution (each, a “Substitution Request”) at least sixty (60) days prior to the anticipated closing date of such substitution, together with evidence that such Borrower has delivered a copy of such Substitution Request to any mezzanine lender under any Permitted Mezzanine Debt then in effect, which Substitution Request shall state the anticipated closing date of such substitution, shall identify the Qualified Substitute Property, the Substituted Property and the Qualified Substitute Borrower, and shall include an Officer’s Certificate providing a certification that as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% date of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% Substitution Request, no Event of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(ii) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(iii) unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replaced;
(iv) if after giving effect to all proposed substitutions to be made on such Addition Date, the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutions;
(v) if an Insolvency Event has occurred with respect to the Transferor or the Servicer or a Servicer Default has occurred and is continuing.;
(d) At least one (1) Business Day prior to the Substitution Date, Lender shall have received evidence that the Operating Lease relating to the Substituted Property will be terminated on the Substitution Date;
(e) Lender shall have received an appraisal of the Qualified Substitute Property and of the Substituted Property, each acceptable to Lender in all respects, dated no more than sixty (60) days prior to the Substitution Date, by an appraiser doing business in the State where each such property is located with at least five (5) years experience in appraising properties similar to such property and who is acceptable to Lender and, if a Securitization has occurred, the Rating Agencies;
(f) Lender shall have received evidence satisfactory to Lender that the fair market value of the Qualified Substitute Property is stable and is not less than the fair market value of the Substituted Property as of the date immediately preceding the Substitution Date determined based on the appraisals delivered pursuant to clause (e) above;
(g) Lender shall have received evidence satisfactory to Lender that the Loan-to-Value Ratio (determined without taking into account the appraised value of the Substituted Property and including the appraised value of the Qualified Substitute Property) immediately following, and after giving effect to, the substitution shall be no greater than the lesser of (i) the Closing LTV and (ii) the Loan-to-Value Ratio (determined by including the appraised value of the Substituted Property and excluding the appraised value of the Qualified Substitute Property) immediately prior to the Substitution Date;
(h) Lender shall have received evidence satisfactory to Lender that, after giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is not less than the greater of (i) the Closing DSCR and (ii) the Debt Service Coverage Ratio for the Loan for all of the Properties (including the Substituted Property and excluding the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date;
(i) Lender shall have received evidence satisfactory to Lender that (A) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Pool 1 Qualified Substitute Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is equal to or greater than the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Substituted Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date, (B) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property does not show a downward trend over the three (3) years immediately prior to the Substitution Date, and (C) after giving effect to the substitution, the Net Cash Flow generated from all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) is sufficient to pay all rent payable pursuant to the terms of the Operating Leases relating to such Properties;
(j) If the Loan is part of a Securitization, Lender shall have received a Rating Agency Confirmation from the applicable Rating Agencies with respect to such substitution (or a written waiver from such Rating Agencies indicating that a Rating Agency Confirmation is not required). If the Loan is not part of a Securitization, Lender shall have consented in writing to such substitution, which consent shall not be unreasonably withheld or delayed;
(k) No Event of Default shall have occurred and be continuing at the time of the submission by such Borrower of the Substitution Request or at the time of the closing of such substitution;
(l) Lender shall have received an Officer’s Certificate stating that the representations and warranties of Borrowers contained in this Agreement and the other Loan Documents are true and correct on and as of the Substitution Date with respect to the Qualified Substitute Borrower and the Qualified Substitute Property and that no Event of Default has occurred and is continuing;
(m) Lender shall have received a certified copy of an Operating Lease between such Qualified Substitute Borrower and Operating Lessee, which Operating Lease shall be substantially the same in form and substance as the Operating Lease in effect for the Substituted Property immediately prior to the Substitution Date as approved by Lender, and Operating Lessee shall have executed and delivered to Lender a Security Agreement, a Subordination Agreement and UCC-1 financing statements, each in form and substance substantially the same as the counterpart of such documents executed and delivered with respect to the related Substituted Property (all of which documents shall be covered by the opinion required pursuant to clause (t) below);
(n) The Qualified Substitute Borrower shall have executed, acknowledged and delivered to Lender a Mortgage, an Assignment of Leases and two UCC-1 financing statements with respect to the Qualified Substitute Property, together with a letter from such Qualified Substitute Borrower countersigned by a Title 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 one of the UCC 1 financing statements Pool 1 in the real estate records for the county in which the Qualified 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 such Qualified Substitute Borrower is organized, so as to effectively create upon such recording and filing valid and enforceable perfected first priority Liens upon the Qualified Substitute Property in favor of Lender (or such trustee as may be desired under local law), subject only to the Permitted Encumbrances. All of the Borrowers, the Qualified Substitute Borrower and, where applicable, Operating Lessee and each Guarantor shall have executed, acknowledged and delivered to Lender (i) a Joinder Agreement, (ii) an amended and restated Note, (iii) an amended and restated Environmental Indemnity, modified to include the Qualified Substitute Property and the Qualified Substitute Borrower (on a joint and several basis), and (iv) amendments to each Carveout Guaranty, the Clearing Account Agreement, the Cash Management Agreement and such of the other Loan Documents as Lender may reasonably require to reflect the joinder of the Qualified Substitute Borrower, the release of the Substituted Property and the addition of the Qualified Substitute Property. In addition, Borrowers shall have caused each Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Mortgage, the Assignment of Leases, the UCC-1 financing statements and the Environmental Indemnity referenced above 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 Qualified Substitute Borrower and the Qualified Substitute Property and such modifications reflecting the laws of the state in which the Qualified 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 (t) below. The Mortgage encumbering the Qualified Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Qualified 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 fair market value of the Qualified Substitute Property. The principal amount of the Loan allocated to the Qualified Substitute Property (such amount being hereinafter referred to as the “Substitute Allocated Loan Amount”) shall equal the Allocated Loan Amount of the related Substituted Property;
(o) Lender shall have received (i) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring that such Qualified Substitute Borrower owns a fee simple estate in the entire Qualified Substitute Property and insuring the Lien of the Mortgage encumbering the Qualified Substitute Property, issued by the Title Companies and dated as of the Substitution Date, with reinsurance and direct access agreements or co-insurance endorsements in the same form as such agreements or endorsements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property, and (ii) to the extent available, a “tie in” or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the Substitution Date with respect to the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Qualified Substitute Property. The Title Insurance Policy issued with respect to the Qualified Substitute Property shall (A) provide coverage in the amount of the Substitute Allocated Loan Amount if the “tie-in” or similar endorsement described above is available or, if Pool 1 such endorsement is not available, in an amount equal to the least of one hundred twenty-five percent (125%) of the fair market value of the Qualified Substitute Property, one hundred fifty percent (150%) of the Substitute Allocated Loan Amount and the maximum amount (if any) permitted under applicable Legal Requirements in the state where the Qualified Substitute Property is located, (B) insure Lender that the relevant Mortgage creates a valid first lien on the Qualified 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), (C) 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, including insuring that the Qualified Substitute Property constitutes a separate tax lot, and (D) name Lender, its successors and assigns, 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 Policy have been paid;
(p) Lender shall have received a current survey for the Qualified Substitute Property, certified to the Title Companies and Lender and their successors and assigns, in the same form and having the same content as the certification of the survey of the Substituted Property, prepared by a professional land surveyor licensed in the State in which the Qualified Substitute Property is located and acceptable to the Rating Agencies in accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as adopted by ALTA, the American Congress on Surveying & Mapping and the National Society of Professional Surveyors in 1999. Such survey shall reflect the same legal description contained in the Title Insurance Policy relating to the Qualified Substitute Property and shall include, among other things, a metes and bounds description of the real property comprising part of the Qualified 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 such survey and such survey shall certify whether or not the surveyed property is located in a “one-hundred-year flood hazard area”;
(q) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for a Property hereunder have been satisfied with respect to the Qualified Substitute Property and evidence of the payment of all premiums payable for the existing policy period;
(r) Lender shall have received a Phase I environmental report issued and certified by a recognized environmental consultant reasonably acceptable to Lender and in form and substance acceptable to Lender and each Rating Agency and, if recommended under the Phase I environmental report, a Phase II environmental report acceptable to Lender and each Rating Agency, which reports conclude that the Qualified Substitute Property does not contain any hazardous materials, is not subject to any risk of contamination from any off-site hazardous materials and complies in every respect with all environmental laws and that there is no further action or investigation required or recommended with regard to the Qualified Substitute Property;
(s) Such Qualified Substitute Borrower shall have delivered or caused to be delivered to Lender (i) a structure chart for such Qualified Substitute Borrower, (ii) copies of all organizational documentation related to such Qualified Substitute Borrower certified as being Pool 1 complete and correct copies thereof by such Qualified Substitute Borrower, which organizational documentation shall be in form and substance satisfactory to Lender and the Rating Agencies, (iii) certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good st
Appears in 1 contract
Conditions to Substitution. The Servicer Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, subject to the terms and conditions set forth in this Section 2.6.1, a Borrower may, at any time after the first anniversary of the Closing Date, obtain a release of the Lien of the applicable Mortgage and the other Loan Documents encumbering its Property (each, a “Substituted Property”) by substituting therefor another improved parcel of real property of like kind, use, utility and quality that is acquired in fee simple by an Affiliate of such Borrower who is a Qualified Substitute Borrower, which property is in a similar geographical area as the Substituted Property and shall not permit any in no event be part of a vertical subdivision, be subject to a declaration of condominium or other similar type of agreement or be subject to a ground lease (a “Qualified Substitute Property”), provided that each of the following conditions precedent are satisfied (with all due diligence materials enumerated below being received by Lender at least forty-five (45) days prior to the date of substitution under Section 2.7(a) on any Addition (the “Substitution Date:”)):
(ia) if the sum Borrowers shall be entitled to substitute (from time to time) no more than fifty percent (50.0%) (by Allocated Loan Amounts) of the Discounted Lease Balances Properties during the Term;
(b) The Substitution Date shall occur prior to the date that is six (6) months prior to the Maturity Date;
(c) Such Borrower shall have submitted to Lender a written request for substitution (each, a “Substitution Request”) at least sixty (60) days prior to the anticipated closing date of such substitution, together with evidence that such Borrower has delivered a copy of such Substitution Request to any mezzanine lender under any Permitted Mezzanine Debt then in effect, which Substitution Request shall state the anticipated closing date of such substitution, shall identify the Qualified Substitute Property, the Substituted Property and the Qualified Substitute Borrower, and shall include an Officer’s Certificate providing a certification that as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% date of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% Substitution Request, no Event of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(ii) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(iii) unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replaced;
(iv) if after giving effect to all proposed substitutions to be made on such Addition Date, the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutions;
(v) if an Insolvency Event has occurred with respect to the Transferor or the Servicer or a Servicer Default has occurred and is continuing.;
(d) At least one (1) Business Day prior to the Substitution Date, Lender shall have received evidence that the Operating Lease relating to the Substituted Property will be terminated on the Substitution Date;
(e) Lender shall have received an appraisal of the Qualified Substitute Property and of the Substituted Property, each acceptable to Lender in all respects, dated no more than sixty (60) days prior to the Substitution Date, by an appraiser doing business in the State where each such property is located with at least five (5) years experience in appraising properties similar to such property and who is acceptable to Lender and, if a Securitization has occurred, the Rating Agencies;
(f) Lender shall have received evidence satisfactory to Lender that the fair market value of the Qualified Substitute Property is stable and is not less than the fair market value of the Substituted Property as of the date immediately preceding the Substitution Date determined based on the appraisals delivered pursuant to clause (e) above;
(g) Lender shall have received evidence satisfactory to Lender that the Loan-to-Value Ratio (determined without taking into account the appraised value of the Substituted Property and including the appraised value of the Qualified Substitute Property) immediately following, and after giving effect to, the substitution shall be no greater than the lesser of (i) the Closing LTV and (ii) the Loan-to-Value Ratio (determined by including the appraised value of the Substituted Property and excluding the appraised value of the Qualified Substitute Property) immediately prior to the Substitution Date;
(h) Lender shall have received evidence satisfactory to Lender that, after giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is not less than the greater of (i) the Closing DSCR and (ii) the Debt Service Coverage Ratio for the Loan for all of the Properties (including the Substituted Property and excluding the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date;
(i) Lender shall have received evidence satisfactory to Lender that (A) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Pool 1 Qualified Substitute Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is equal to or greater than the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Substituted Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date, (B) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property does not show a downward trend over the three (3) years immediately prior to the Substitution Date, and (C) after giving effect to the substitution, the Net Cash Flow generated from all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) is sufficient to pay all rent payable pursuant to the terms of the Operating Leases relating to such Properties;
(j) If the Loan is part of a Securitization, Lender shall have received a Rating Agency Confirmation from the applicable Rating Agencies with respect to such substitution (or a written waiver from such Rating Agencies indicating that a Rating Agency Confirmation is not required). If the Loan is not part of a Securitization, Lender shall have consented in writing to such substitution, which consent shall not be unreasonably withheld or delayed;
(k) No Event of Default shall have occurred and be continuing at the time of the submission by such Borrower of the Substitution Request or at the time of the closing of such substitution;
(l) Lender shall have received an Officer’s Certificate stating that the representations and warranties of Borrowers contained in this Agreement and the other Loan Documents are true and correct on and as of the Substitution Date with respect to the Qualified Substitute Borrower and the Qualified Substitute Property and that no Event of Default has occurred and is continuing;
(m) Lender shall have received a certified copy of an Operating Lease between such Qualified Substitute Borrower and Operating Lessee, which Operating Lease shall be substantially the same in form and substance as the Operating Lease in effect for the Substituted Property immediately prior to the Substitution Date as approved by Lender, and Operating Lessee shall have executed and delivered to Lender a Security Agreement, a Subordination Agreement and UCC-1 financing statements, each in form and substance substantially the same as the counterpart of such documents executed and delivered with respect to the related Substituted Property (all of which documents shall be covered by the opinion required pursuant to clause (t) below);
(n) The Qualified Substitute Borrower shall have executed, acknowledged and delivered to Lender a Mortgage, an Assignment of Leases and two UCC-1 financing statements with respect to the Qualified Substitute Property, together with a letter from such Qualified Substitute Borrower countersigned by a Title 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 one of the UCC 1 financing statements Pool 1 in the real estate records for the county in which the Qualified 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 such Qualified Substitute Borrower is organized, so as to effectively create upon such recording and filing valid and enforceable perfected first priority Liens upon the Qualified Substitute Property in favor of Lender (or such trustee as may be desired under local law), subject only to the Permitted Encumbrances. All of the Borrowers, the Qualified Substitute Borrower and, where applicable, Operating Lessee and each Guarantor shall have executed, acknowledged and delivered to Lender (i) a Joinder Agreement, (ii) an amended and restated Note, (iii) an amended and restated Environmental Indemnity, modified to include the Qualified Substitute Property and the Qualified Substitute Borrower (on a joint and several basis), and (iv) amendments to each Carveout Guaranty, the Clearing Account Agreement, the Cash Management Agreement and such of the other Loan Documents as Lender may reasonably require to reflect the joinder of the Qualified Substitute Borrower, the release of the Substituted Property and the addition of the Qualified Substitute Property. In addition, Borrowers shall have caused each Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Mortgage, the Assignment of Leases, the UCC-1 financing statements and the Environmental Indemnity referenced above 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 Qualified Substitute Borrower and the Qualified Substitute Property and such modifications reflecting the laws of the state in which the Qualified 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 (t) below. The Mortgage encumbering the Qualified Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Qualified 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 fair market value of the Qualified Substitute Property. The principal amount of the Loan allocated to the Qualified Substitute Property (such amount being hereinafter referred to as the “Substitute Allocated Loan Amount”) shall equal the Allocated Loan Amount of the related Substituted Property;
(o) Lender shall have received (i) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring that such Qualified Substitute Borrower owns a fee simple estate in the entire Qualified Substitute Property and insuring the Lien of the Mortgage encumbering the Qualified Substitute Property, issued by the Title Companies and dated as of the Substitution Date, with reinsurance and direct access agreements or co-insurance endorsements in the same form as such agreements or endorsements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property, and (ii) to the extent available, a “tie in” or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the Substitution Date with respect to the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Qualified Substitute Property. The Title Insurance Policy issued with respect to the Qualified Substitute Property shall (A) 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 the least of one hundred twenty-five percent (125%) of the fair market value of the Qualified Substitute Property, one hundred fifty percent (150%) of the Substitute Allocated Loan Amount and the maximum amount (if any) permitted under applicable Legal Requirements in the state where the Qualified Substitute Property is located, (B) insure Lender that the relevant Mortgage creates a valid first lien on the Qualified 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), (C) 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, including insuring that the Qualified Substitute Property constitutes a separate tax lot, and (D) name Lender, its successors and assigns, 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 Policy have been paid;
(p) Lender shall have received a current survey for the Qualified Substitute Property, certified to the Title Companies and Lender and their successors and assigns, in the same form and having the same content as the certification of the survey of the Substituted Property, prepared by a professional land surveyor licensed in the State in which the Qualified Substitute Property is located and acceptable to the Rating Agencies in accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as adopted by ALTA, the American Congress on Surveying & Mapping and the National Society of Professional Surveyors in 1999. Such survey shall reflect the same legal description contained in the Title Insurance Policy relating to the Qualified Substitute Property and shall include, among other things, a metes and bounds description of the real property comprising part of the Qualified 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 such survey and such survey shall certify whether or not the surveyed property is located in a “one-hundred-year flood hazard area”;
(q) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for a Property hereunder have been satisfied with respect to the Qualified Substitute Property and evidence of the payment of all premiums payable for the existing policy period;
(r) Lender shall have received a Phase I environmental report issued and certified by a recognized environmental consultant reasonably acceptable to Lender and in form and substance acceptable to Lender and each Rating Agency and, if recommended under the Phase I environmental report, a Phase II environmental report acceptable to Lender and each Rating Agency, which reports conclude that the Qualified Substitute Property does not contain any hazardous materials, is not subject to any risk of contamination from any off-site hazardous materials and complies in every respect with all environmental laws and that there is no further action or investigation required or recommended with regard to the Qualified Substitute Property;
(s) Such Qualified Substitute Borrower shall have delivered or caused to be delivered to Lender (i) a structure chart for such Qualified Substitute Borrower, (ii) copies of all organizational documentation related to such Qualified Substitute Borrower certified as being complete and correct copies thereof by such Qualified Substitute Borrower, which organizational documentation shall be in form and substance satisfactory to Lender and the Rating Agencies, (iii) certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good standing of such
Appears in 1 contract
Conditions to Substitution. The Servicer Notwithstanding anything to the contrary set forth in this Agreement or the other Loan Documents, subject to the terms and conditions set forth in this Section 2.6.1, a Borrower may, at any time after the first anniversary of the Closing Date, obtain a release of the Lien of the applicable Mortgage and the other Loan Documents encumbering its Property (each, a “Substituted Property”) by substituting therefor another improved parcel of real property of like kind, use, utility and quality that is acquired in fee simple by an Affiliate of such Borrower who is a Qualified Substitute Borrower, which property is in a similar geographical area as the Substituted Property and shall not permit any in no event be part of a vertical subdivision, be subject to a declaration of condominium or other similar type of agreement or be subject to a ground lease (a “Qualified Substitute Property”), provided that each of the following conditions precedent are satisfied (with all due diligence materials enumerated below being received by Lender at least forty-five (45) days prior to the date of substitution under Section 2.7(a) on any Addition (the “Substitution Date:”)):
(ia) if the sum Borrowers shall be entitled to substitute (from time to time) no more than fifty percent (50.0%) (by Allocated Loan Amounts) of the Discounted Lease Balances Properties during the Term;
(b) The Substitution Date shall occur prior to the date that is six (6) months prior to the Maturity Date;
(c) Such Borrower shall have submitted to Lender a written request for substitution (each, a “Substitution Request”) at least sixty (60) days prior to the anticipated closing date of such substitution, together with evidence that such Borrower has delivered a copy of such Substitution Request to any mezzanine lender under any Permitted Mezzanine Debt then in effect, which Substitution Request shall state the anticipated closing date of such substitution, shall identify the Qualified Substitute Property, the Substituted Property and the Qualified Substitute Borrower, and shall include an Officer’s Certificate providing a certification that as of the related Cut Off Date) of Leases substituted for Defaulted Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 4% date of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 7% Substitution Request, no Event of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(ii) if the sum of the Discounted Lease Balances (as of the related Cut Off Date) of all Substitute Leases on a cumulative basis (A) during any period of twelve consecutive Monthly Periods would exceed 10% of the Aggregate Net Pool Balance on the related Cut Off Date for such Substitute Leases or (B) after the Pay Out Commencement Date would exceed 15% of the Aggregate Net Pool Balance as of the Pay Out Commencement Date, unless, in either case, the Rating Agency Condition shall have been satisfied with respect thereto;
(iii) unless as of the related Additional Cut Off Date, each Substitute Lease has a Discounted Lease Balance not less than the Discounted Lease Balance of the Lease being replaced;
(iv) if after giving effect to all proposed substitutions to be made on such Addition Date, the sum of the Scheduled Principal Payments on all Included Leases due in any Monthly Period would be less than the sum of all Scheduled Principal Payments on the Included Leases in each such Monthly Period before giving effect to such proposed substitutions;
(v) if an Insolvency Event has occurred with respect to the Transferor or the Servicer or a Servicer Default has occurred and is continuing.;
(d) At least one (1) Business Day prior to the Substitution Date, Lender shall have received evidence that the Operating Lease relating to the Substituted Property will be terminated on the Substitution Date;
(e) Lender shall have received an appraisal of the Qualified Substitute Property and of the Substituted Property, each acceptable to Lender in all respects, dated no more than sixty (60) days prior to the Substitution Date, by an appraiser doing business in the State where each such property is located with at least five (5) years experience in appraising properties similar to such property and who is acceptable to Lender and, if a Securitization has occurred, the Rating Agencies;
(f) Lender shall have received evidence satisfactory to Lender that the fair market value of the Qualified Substitute Property is stable and is not less than the fair market value of the Substituted Property as of the date immediately preceding the Substitution Date determined based on the appraisals delivered pursuant to clause (e) above;
(g) Lender shall have received evidence satisfactory to Lender that the Loan-to-Value Ratio (determined without taking into account the appraised value of the Substituted Property and including the appraised value of the Qualified Substitute Property) immediately following, and after giving effect to, the substitution shall be no greater than the lesser of (i) the Closing LTV and (ii) the Loan-to-Value Ratio (determined by including the appraised value of the Substituted Property and excluding the appraised value of the Qualified Substitute Property) immediately prior to the Substitution Date;
(h) Lender shall have received evidence satisfactory to Lender that, after giving effect to the substitution, the Debt Service Coverage Ratio for the Loan for all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is not less than the greater of (i) the Closing DSCR and (ii) the Debt Service Coverage Ratio for the Loan for all of the Properties (including the Substituted Property and excluding the Qualified Substitute Property) for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date;
(i) Lender shall have received evidence satisfactory to Lender that (A) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date is equal to or greater than the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Substituted Property for the twelve (12) month period immediately preceding the last day of the calendar month immediately preceding the Substitution Date, (B) the Net Cash Flow (as adjusted and determined in accordance with Lender’s standard underwriting practice and procedures as used in connection with the underwriting of the Loan) for the Qualified Substitute Property does not show a downward trend over the three (3) years immediately prior to the Substitution Date, and (C) after giving effect to the substitution, the Net Cash Flow generated from all of the Properties (excluding the Substituted Property and including the Qualified Substitute Property) is sufficient to pay all rent payable pursuant to the terms of the Operating Leases relating to such Properties;
(j) If the Loan is part of a Securitization, Lender shall have received a Rating Agency Confirmation from the applicable Rating Agencies with respect to such substitution (or a written waiver from such Rating Agencies indicating that a Rating Agency Confirmation is not required). If the Loan is not part of a Securitization, Lender shall have consented in writing to such substitution, which consent shall not be unreasonably withheld or delayed;
(k) No Event of Default shall have occurred and be continuing at the time of the submission by such Borrower of the Substitution Request or at the time of the closing of such substitution;
(l) Lender shall have received an Officer’s Certificate stating that the representations and warranties of Borrowers contained in this Agreement and the other Loan Documents are true and correct on and as of the Substitution Date with respect to the Qualified Substitute Borrower and the Qualified Substitute Property and that no Event of Default has occurred and is continuing;
(m) Lender shall have received a certified copy of an Operating Lease between such Qualified Substitute Borrower and Operating Lessee, which Operating Lease shall be substantially the same in form and substance as the Operating Lease in effect for the Substituted Property immediately prior to the Substitution Date as approved by Lender, and Operating Lessee shall have executed and delivered to Lender a Security Agreement, a Subordination Agreement and UCC-1 financing statements, each in form and substance substantially the same as the counterpart of such documents executed and delivered with respect to the related Substituted Property (all of which documents shall be covered by the opinion required pursuant to clause (t) below);
(n) The Qualified Substitute Borrower shall have executed, acknowledged and delivered to Lender a Mortgage, an Assignment of Leases and two UCC-1 financing statements with respect to the Qualified Substitute Property, together with a letter from such Qualified Substitute Borrower countersigned by a Title 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 one of the UCC 1 financing statements in the real estate records for the county in which the Qualified 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 such Qualified Substitute Borrower is organized, so as to effectively create upon such recording and filing valid and enforceable perfected first priority Liens upon the Qualified Substitute Property in favor of Lender (or such trustee as may be desired under local law), subject only to the Permitted Encumbrances. All of the Borrowers, the Qualified Substitute Borrower and, where applicable, Operating Lessee and each Guarantor shall have executed, acknowledged and delivered to Lender (i) a Joinder Agreement, (ii) an amended and restated Note, (iii) an amended and restated Environmental Indemnity, modified to include the Qualified Substitute Property and the Qualified Substitute Borrower (on a joint and several basis), and (iv) amendments to each Carveout Guaranty, the Clearing Account Agreement, the Cash Management Agreement and such of the other Loan Documents as Lender may reasonably require to reflect the joinder of the Qualified Substitute Borrower, the release of the Substituted Property and the addition of the Qualified Substitute Property. In addition, Borrowers shall have caused each Guarantor to acknowledge and confirm its obligations under the Loan Documents. The Mortgage, the Assignment of Leases, the UCC-1 financing statements and the Environmental Indemnity referenced above 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 Qualified Substitute Borrower and the Qualified Substitute Property and such modifications reflecting the laws of the state in which the Qualified 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 (t) below. The Mortgage encumbering the Qualified Substitute Property shall secure all amounts evidenced by the Note, provided that in the event that the jurisdiction in which the Qualified 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 fair market value of the Qualified Substitute Property. The principal amount of the Loan allocated to the Qualified Substitute Property (such amount being hereinafter referred to as the “Substitute Allocated Loan Amount”) shall equal the Allocated Loan Amount of the related Substituted Property;
(o) Lender shall have received (i) a Title Insurance Policy (or a marked, signed and redated commitment to issue such Title Insurance Policy) insuring that such Qualified Substitute Borrower owns a fee simple estate in the entire Qualified Substitute Property and insuring the Lien of the Mortgage encumbering the Qualified Substitute Property, issued by the Title Companies and dated as of the Substitution Date, with reinsurance and direct access agreements or co-insurance endorsements in the same form as such agreements or endorsements issued in connection with the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Substituted Property, and (ii) to the extent available, a “tie in” or similar endorsement to each Title Insurance Policy insuring the Lien of an existing Mortgage as of the Substitution Date with respect to the Title Insurance Policy insuring the Lien of the Mortgage encumbering the Qualified Substitute Property. The Title Insurance Policy issued with respect to the Qualified Substitute Property shall (A) 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 the least of one hundred twenty-five percent (125%) of the fair market value of the Qualified Substitute Property, one hundred fifty percent (150%) of the Substitute Allocated Loan Amount and the maximum amount (if any) permitted under applicable Legal Requirements in the state where the Qualified Substitute Property is located, (B) insure Lender that the relevant Mortgage creates a valid first lien on the Qualified 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), (C) 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, including insuring that the Qualified Substitute Property constitutes a separate tax lot, and (D) name Lender, its successors and assigns, 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 Policy have been paid;
(p) Lender shall have received a current survey for the Qualified Substitute Property, certified to the Title Companies and Lender and their successors and assigns, in the same form and having the same content as the certification of the survey of the Substituted Property, prepared by a professional land surveyor licensed in the State in which the Qualified Substitute Property is located and acceptable to the Rating Agencies in accordance with the Accuracy Standards for ALTA/ACSM Land Title Surveys as adopted by ALTA, the American Congress on Surveying & Mapping and the National Society of Professional Surveyors in 1999. Such survey shall reflect the same legal description contained in the Title Insurance Policy relating to the Qualified Substitute Property and shall include, among other things, a metes and bounds description of the real property comprising part of the Qualified 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 such survey and such survey shall certify whether or not the surveyed property is located in a “one-hundred-year flood hazard area”;
(q) Lender shall have received valid certificates of insurance indicating that the requirements for the policies of insurance required for a Property hereunder have been satisfied with respect to the Qualified Substitute Property and evidence of the payment of all premiums payable for the existing policy period;
(r) Lender shall have received a Phase I environmental report issued and certified by a recognized environmental consultant reasonably acceptable to Lender and in form and substance acceptable to Lender and each Rating Agency and, if recommended under the Phase I environmental report, a Phase II environmental report acceptable to Lender and each Rating Agency, which reports conclude that the Qualified Substitute Property does not contain any hazardous materials, is not subject to any risk of contamination from any off-site hazardous materials and complies in every respect with all environmental laws and that there is no further action or investigation required or recommended with regard to the Qualified Substitute Property;
(s) Such Qualified Substitute Borrower shall have delivered or caused to be delivered to Lender (i) a structure chart for such Qualified Substitute Borrower, (ii) copies of all organizational documentation related to such Qualified Substitute Borrower certified as being complete and correct copies thereof by such Qualified Substitute Borrower, which organizational documentation shall be in form and substance satisfactory to Lender and the Rating Agencies, (iii) certificates dated as of a recent date from the Secretary of State or other appropriate authority, evidencing the good standing of such Qualified Sub
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